---

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 March 31, 2004

 ̈ 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 BANKRUPTCYPROCEEDINGS 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 May 11, 2004, the registrants outstanding common
  stock consisted of 17,004,166 shares.

Transitional Small Business Disclosure Format (Check one):   
  YES  ̈      NO
  x

---

ONLINE INNOVATION, INC.

INDEX TO FORM 10QSB

|PART I  FINANCIAL
      INFORMATION
|------------------------------------
|                                    
|Item 1.                             
|                                    
|Item 2.                             
|                                    
|Item 3.                             
|                                    
|PART II  OTHER INFORMATION         
|                                    
|Item 1.                             
|                                    
|Item 2.                             
|                                    
|Item 3.                             
|                                    
|Item 4.                             
|                                    
|Item 5.                             
|                                    
|Item 6.                             
|                                    
|SIGNATURES                          

---

PART 1  FINANCIAL INFORMATION

Item 1  Financial Statements

Attached are the registrants unaudited financial statements
  for the nine month period ended March 31, 2004, with comparative figures for
  the nine month period ended March 31, 2003, and the Independent Accountants
  Report thereon.

---

MOEN AND COMPANYCHARTERED ACCOUNTANTS

|Member:                                                 |                                     
|------------------------------------------------------- | ------------------------------------
|Canadian Institute of Chartered Accountants             | Securities Commission Building      
|Institute of Chartered Accountants of British Columbia  | PO Box 10129, Pacific Centre        
|Institute of Management Accountants (USA) (From 1965)   | Suite 1400  701 West Georgia Street
|                                                        | Vancouver, British Columbia         
|Registered with:                                        | Canada V7Y 1C6                      
|Public Company Accounting Oversight Board (USA) (PCAOB) | Telephone: (604) 662-8899           
|Canadian Public Accountability Board (CPAB)             | Fax: (604) 662-8809                 
|Canada - British Columbia Public Practice Licence       | Email: moenca@telus.net             

---

INDEPENDENT ACCOUNTANTS REVIEW REPORT

To the Directors and Shareholders of 
  Online 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
  March 31, 2004 and March 31, 2003, and the Statements of Income, Retained Earnings
  (Deficit), Cash Flows and Stockholders Equity for the nine month periods
  then ended. These financial statements are the responsibility of the Companys
  management.

We conducted our reviews 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 reviews, 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

(Signed)

Chartered Accountants

Vancouver, British Columbia, Canada 
  May 10, 2004

Independent Accountants and Auditors

---

ONLINE INNOVATION, INC. (A Delaware Corporation)
  (A Development Stage Company) 
  Balance Sheet March 31, 2004
  (In U.S. Dollars) 
  (With Comparative Figures at March 31, 2003) (Unaudited)

|                                                                        | March 31, |           
|----------------------------------------------------------------------- | --------- | ----------
|ASSETS                                                                  |           | 2004      
|Current Assets                                                          |           |           
|Cash                                                                    | $         | 18,368    
|                                                                        |           |           
|Deferred tax asset                                                      |           | 52,500    
|Fixed assets                                                            |           |           
|Computer equipment, at cost less accumulated depreciation
      (Note 5 |           | 22,408    
|Computer software development (Note 6(b))                               |           |           
|Application development stage costs                                     |           | 325,000   
|                                                                        |           |           
|                                                                        | $         | 418,276   
|                                                                        |           |           
|LIABILITIES AND STOCKHOLDERS' EQUITY                                    |           |           
|                                                                        |           |           
|Current Liabilities                                                     |           |           
|Accounts payable                                                        | $         | 96,112    
|Management fees payable (Note 4(a)                                      |           | 87,500    
|Due to related parties (Notes 4(c))                                     |           | 45,067    
|                                                                        |           | 228,679   
|Stockholders' Equity                                                    |           |           
|Capital Stock (Note 3)                                                  |           |           
|Authorized:                                                             |           |           
|75,000,000 common
      shares at $0.001 par value per share            |           |           
|Issued and outstanding - 17,004,166
      common shares                 |           |           
|(2003 - 15,480,000
      common shares)                                 |           | 17,004    
|Paid in capital in excess of par value
      of stoc                    |           | 2,818,763 
|Deficit accumulated during development stage (note 1                    |           | (2,640,214
|Cumulative currency translation adjustments (Note 2(b)                  |           | (5,956    
|                                                                        |           | 189,597   
|                                                                        | $         | 418,276   

Approved on Behalf of the Board

|"Chad D. Lee"         |  | , President and Chief Executive Officer and Director             
|--------------------- |  | -----------------------------------------------------------------
|                      |  |                                                                  
|"Marlene C. Schluter" |  | ,Secretary and Treasurer and Chief Financial Officer and 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  |            | Nine Months Ended |   | Three Months Ended |  
|                                   | to March 31,    |            | March 31,         |   | March 31,          |  
|                                   | 2004            |            | 2004              |   | 2003               |   | 2004 |          | 2003 |  
|                                   |                 |            |                   |   |                    |   |      |          |      |  
|Interest and Other Income          | $               | 1,089      |                   | $ | 1,089              |   | $    | --       |      | $
|                                   |                 |            |                   |   |                    |   |      |          |      |  
|Administration Costs               |                 |            |                   |   |                    |   |      |          |      |  
|Compensation on stock option       | $               | 150,000    |                   | $ | --                 |   | $    | --       |      | $
|Funding agreement commitment costs |                 | 345,600    |                   |   | --                 |   |      | --       |      |  
|Depreciation                       |                 | 94,681     |                   |   | 10,407             |   |      | 10,407   |      |  
|Filing and transfer agent fees     |                 | 27,513     |                   |   | 1,756              |   |      | 4,664    |      |  
|Financing costs                    |                 | 22,550     |                   |   |                    |   |      | --       |      |  
|Interest on loans                  |                 | 7,268      |                   |   | 2,417              |   |      | 4,851    |      |  
|Management and consulting fees     |                 | 767,002    |                   |   | 119,483            |   |      | 108,465  |      |  
|Office expenses, net               |                 | 205,321    |                   |   | 24,102             |   |      | 21,881   |      |  
|Option payment, mineral properties |                 | 30,000     |                   |   |                    |   |      | --       |      |  
|Professional fees                  |                 | 240,049    |                   |   | 11,587             |   |      | 10,035   |      |  
|Promotion, investor relations,     |                 |            |                   |   |                    |   |      |          |      |  
|and investor communications        |                 | 87,970     |                   |   | 845                |   |      | 2,521    |      |  
|Computer technology and            |                 |            |                   |   |                    |   |      |          |      |  
|software development-preliminary   |                 |            |                   |   |                    |   |      |          |      |  
|development stage
      costs      |                 | 377,458    |                   |   | 23,369             |   |      | 55,136   |      |  
|Website marketing/Banner           |                 |            |                   |   |                    |   |      |          |      |  
|advertising costs                  |                 | 295,840    |                   |   | 63,482             |   |      | 27,451   |      |  
|Travel expenses                    |                 | 42,551     |                   |   | 2,625              |   |      | 7,896    |      |  
|                                   |                 | 2,693,803  |                   |   | 260,073            |   |      | 253,307  |      |  
|                                   |                 | (2,692,714 | )                 |   | (258,984           | ) |      | (253,307 | )    |  
|Deferred income taxes              |                 | (52,500    | )                 |   | --                 |   |      | --       |      |  
|                                   |                 |            |                   |   |                    |   |      |          |      |  
|Net profit (loss) for the period   | $               | (2,640,214 | )                 | $ | (258,984           | ) | $    | (253,307 | )    | $
|                                   |                 |            |                   |   |                    |   |      |          |      |  
|                                   |                 |            |                   |   |                    |   |      |          |      |  
|                                   |                 |            |                   |   |                    |   |      |          |      |  
|Net loss per common share (Note 8) |                 |            |                   |   |                    |   |      |          |      |  
|Basic                              | $               | (0.16      | )                 | $ | (0.01              | ) | $    | (0.02    | )    | $
|Diluted                            | $               | (0.16      | )                 | $ | (0.01              | ) | $    | (0.02    | )    | $
|                                   |                 |            |                   |   |                    |   |      | (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  |            | Nine Months Ended |   | Three Months Ended |  
|                                            | to March 31,    |            | March 31,         |   | March 31,          |  
|                                            | 2004            |            | 2004              |   | 2003               |   | 2004 |          | 2003 |  
|Cash Provided by (Used for)                 |                 |            |                   |   |                    |   |      |          |      |  
|Operating Activities                        |                 |            |                   |   |                    |   |      |          |      |  
|Net profit (loss) for the period            | $               | (2,640,214 | )                 | $ | (258,984           | ) | $    | (253,307 | )    | $
|Items not requiring use of cash:            |                 |            |                   |   |                    |   |      |          |      |  
|Shares issued for funding agreement         |                 |            |                   |   |                    |   |      |          |      |  
|commitment costs                            |                 | 345,600    |                   |   | --                 |   |      | --       |      |  
|Shares issued for assignment of             |                 |            |                   |   |                    |   |      |          |      |  
|option on mineral
      properties          |                 | 30,000     |                   |   | --                 |   |      | --       |      |  
|Shares issued for compensation              |                 |            |                   |   |                    |   |      |          |      |  
|on stock options                            |                 | 150,000    |                   |   | --                 |   |      | --       |      |  
|Shares issued for private business          |                 | 200,000    |                   |   | --                 |   |      | --       |      |  
|Shares cancellation                         |                 | (82,250    | )                 |   | --                 |   |      | --       |      |  
|Shares issued for loan payable              |                 | 95,417     |                   |   | 62,417             |   |      | 33,000   |      |  
|Depreciation                                |                 | 94,681     |                   |   | 10,407             |   |      | 10,407   |      |  
|Cumulative currency translation adjustments |                 | (5,956     | )                 |   | (7,356             | ) |      | 1,126    |      |  
|Changes in non-cash working capital items   |                 |            |                   |   |                    |   |      |          |      |  
|Deferred income tax                         |                 | (52,500    | )                 |   | --                 |   |      | --       |      |  
|Share subscriptions receivable              |                 | --         |                   |   | --                 |   |      | --       |      |  
|Prepaid expense                             |                 | --         |                   |   | --                 |   |      | 2,209    |      |  
|Accounts payable                            |                 | 96,112     |                   |   | 56,123             |   |      | (14,490  | )    |  
|Management fees payable                     |                 | 87,500     |                   |   | 32,500             |   |      | 2,500    |      |  
|                                            |                 | (1,681,610 | )                 |   | (104,893           | ) |      | (218,555 | )    |  
|Investing Activities                        |                 |            |                   |   |                    |   |      |          |      |  
|Computer software development               |                 |            |                   |   |                    |   |      |          |      |  
|Application development stage costs         |                 | (325,000   | )                 |   | --                 |   |      | --       |      |  
|Fixed assets purchased                      |                 | (117,089   | )                 |   | --                 |   |      | (435     | )    |  
|                                            |                 | (442,089   | )                 |   | --                 |   |      | (435     | )    |  
|Financing Activities                        |                 |            |                   |   |                    |   |      |          |      |  
|Capital stock subscribed                    |                 | 2,097,000  |                   |   | 112,500            |   |      | 335,000  |      |  
|Loan payable (repayment)                    |                 | --         |                   |   | --                 |   |      | (85,000  | )    |  
|Loan from Fusion Capital (repayment)        |                 | --         |                   |   | --                 |   |      | (50,000  | )    |  
|Due to related parties                      |                 | 45,067     |                   |   | 955                |   |      | 14,112   |      |  
|                                            |                 | 2,142,067  |                   |   | 113,455            |   |      | 214,112  |      |  
|Cash increase (decrease)                    |                 |            |                   |   |                    |   |      |          |      |  
|during the period                           |                 | 18,368     |                   |   | 8,562              |   |      | (4,878   | )    |  
|Cash, Beginning of period                   |                 | --         |                   |   | 9,806              |   |      | 12,972   |      |  
|Cash, End of period                         | $               | 18,368     |                   | $ | 18,368             |   | $    | 8,094    |      | $

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  |            | Nine Months Ended |   | Three Months Ended |  
|                                 | to March 31,    |            | March 31,         |   | March 31,          |  
|                                 | 2004            |            | 2004              |   | 2003               |  
|                                 |                 |            |                   |   |                    |  
|Balance (deficit), beginning     |                 |            |                   |   |                    |  
|of period                        | $               | --         |                   | $ | (2,381,230         | )
|                                 |                 |            |                   |   |                    |  
|Net profit (loss) for the period |                 | (2,640,214 | )                 |   | (258,984           | )
|                                 |                 |            |                   |   |                    |  
|Balance (deficit), end of period | $               | (2,640,214 | )                 | $ | (2,640,214         | )

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 March 31, 2004
  (In U.S. Dollars)(Unaudited)

|                                            | Number of  |  |        |  | Additional |  | Total     |  | Retained  |   | Currency    |   | Total         |  
|------------------------------------------- | ---------- |  | ------ |  | ---------- |  | --------- |  | --------- | - | ----------- | - | ------------- | -
|                                            | Common     |  | par    |  | Paid-in    |  | Capital   |  | Earnings  |   | Translation |   | Stockholders' |  
|                                            | Shares     |  | Value  |  | Capital    |  | Stock     |  | (Deficit) |   | Adjustments |   | 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  |  | 1,500  |  | 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 currency translation adjustments |            |  |        |  |            |  |           |  |           |   | (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, @$0.50         |            |  |        |  |            |  |           |  |           |   |             |   |               |  
|April 2, 1999                               | 400,000    |  | 400    |  | 199,600    |  | 200,000   |  |           |   |             |   | 200,000       |  
|Issued for cash, @$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       |  
|(Carried forward to next page)              |            |  |        |  |            |  |           |  |           |   |             |   |               |  

See Accompanying Notes and Independent Accountants' Review
  Report

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Statement of Stockholders' EquityFrom Date of Inception on August 1, 1997 to March 31, 2004
  (In U.S. Dollars)
  (Unaudited)

|                                            |            |  |        |  |            |  |           |  |            |   | Cumulative  |   |               |  
|------------------------------------------- | ---------- |  | ------ |  | ---------- |  | --------- |  | ---------- | - | ----------- | - | ------------- | -
|                                            | Number of  |  |        |  | Additional |  | Total     |  | Retained   |   | Currency    |   | Total         |  
|                                            | Common     |  | par    |  | Paid-in    |  | Capital   |  | Earnings   |   | Translation |   | Stockholders' |  
|                                            | Shares     |  | Value  |  | Capital    |  | Stock     |  | (Deficit)  |   | Adjustments |   | Equity        |  
|Balance, June 30, 1999                      | 12,705,000 |  | 12,705 |  | 1,255,295  |  | 1,268,000 |  | (622,672   | ) | (1,055      | ) | 644,273       |  
|Cumulative currency translation adjustments |            |  |        |  |            |  |           |  |            |   | 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                 |            |  |        |  |            |  |           |  |            |   |             |   |               |  
|February 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 currency translation adjustments |            |  |        |  |            |  |           |  |            |   | 592         |   | 592           |  
|Balance, June 30, 2001                      | 14,595,000 |  | 14,595 |  | 2,300,505  |  | 2,315,100 |  | (1,922,937 | ) | 80          |   | 392,243       |  
|(Carried forward to next page)              |            |  |        |  |            |  |           |  |            |   |             |   |               |  

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 March 31, 2004
  (In U.S. Dollars) (Unaudited)

|                                            |            |   |         |   |            |   |            |   |             |   | Cumulative  |   |               |  
|------------------------------------------- | ---------- | - | ------- | - | ---------- | - | ---------- | - | ----------- | - | ----------- | - | ------------- | -
|                                            | Number of  |   |         |   | Additional |   | Total      |   | Retained    |   | Currency    |   | Total         |  
|                                            | Common     |   | par     |   | Paid-in    |   | Capital    |   | Earnings    |   | Translation |   | Stockholders' |  
|                                            | Shares     |   | Value   |   | Capital    |   | Stock      |   | (Deficit)   |   | Adjustments |   | Equity        |  
|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 currency translation adjustments |            |   |         |   |            |   |            |   |             |   | 194         |   | 194           |  
|Net loss for year 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        |  
|Shares subscribed and                       |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|paid for cash @$0.50                        |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|November 6, 2002                            | 250,000    |   | 250     |   | 124,750    |   | 125,000    |   |             |   |             |   | 125,000       |  
|Issued for cash @ $0.40                     |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|April 25, 2003                              | 100,000    |   | 100     |   | 39,900     |   | 40,000     |   |             |   |             |   | 40,000        |  
|Issued for cash @ $0.40                     |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|April 25, 2003                              | 50,000     |   | 50      |   | 19,950     |   | 20,000     |   |             |   |             |   | 20,000        |  
|Cumulative currency translation adjustments |            |   |         |   |            |   |            |   |             |   | 1,126       |   | 1,126         |  
|Net loss for year ended                     |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|June 30, 2003                               |            |   |         |   |            |   |            |   | (323,016    | ) |             |   | (323,016      | )
|Balance, June 30, 2003                      | 15,630,000 |   | $15,630 |   | $2,645,220 |   | $2,660,850 |   | ($2,381,230 | ) | $1,400      |   | $281,020      |  
|Issued for cash @ $0.15                     |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|November 1, 2003                            | 700,000    |   | 700     |   | 104,300    |   | 105,000    |   |             |   |             |   | 105,000       |  
|Issued for cash @ $0.15                     |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|December 31, 2003                           | 50,000     |   | 50      |   | 7,450      |   | 7,500      |   |             |   |             |   | 7,500         |  
|Issued for notes payable                    |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|January 4, 2004                             | 624,166    |   | 624     |   | 61,793     |   | 62,417     |   |             |   |             |   | 62,417        |  
|Net loss for period ended                   |            |   |         |   |            |   |            |   |             |   |             |   |               |  
|March 31, 2004                              |            |   |         |   |            |   |            |   | (258,984    | ) |             |   | (258,984      | )
|Cumulative currency translation adjustments |            |   |         |   |            |   |            |   |             |   | (7,356      | ) | (7,356        | )
|Balance, March 31, 2004                     | 17,004,166 |   | $17,004 |   | $2,818,763 |   | $2,835,767 |   | ($2,640,214 | ) | ($5,956     | ) | $189,597      |  

See Accompanying Notes and Independent Accountants' Review
  Report

---

ONLINE INNOVATION, INC. (A Delaware Corporation) 
  (A Development Stage Company) 
  Notes to Financial Statements March 31, 2004 
  (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 its name from
        Micro Millennium, Inc. to Sinaloa Gold Corp. on October 16, 1997 and subsequently
        changed its name from Sinaloa 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 significant 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
      Both the functional currency and the reporting currency
        of the Company are the United States Dollar.
      The assets, liabilities, and operations of the Company
        are expressed in the United States Dollar, in conformity with US GAAP.
      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 or losses from the functional
        currency to the reporting currency.
      The gain or loss on translation is reported as a separate
        component of stockholders equity and not recognized 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 asset was acquired.
      Capital accounts are translated at their historical
        exchange rates when the capital stock is issued.
      The effect of exchange rate changes on cash balances
        is reported in the statement of cash flows as a separate part of the reconciliation
        of change in cash and cash equivalents during the year.

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements March 31, 2004
  (In U.S. Dollars)
  (Unaudited)

Note 2. SIGNIFICANT ACCOUNTING POLICIES

| | b) | Translation of Foreign Currency (contd)
      An analysis of the changes in the cumulative currency translation adjustments
        as disclosed as part of stockholders equity, is as follows:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                         | Nine Months Ended |       
| | --------------------------------------- | ----------------- | ------
| |                                         | March 31,         |       
| |                                         | 2004              |       
| | Beginning balance, June 30, 2003 & 2002 | $                 | 1,400 
| | Changes during the period               |                   | (7,356
| | Ending balance, March 31, 2004 & 2003   | $                 | (5,956

| | c) | Amortization of Computer Software
        Development  Application Development Stage Costs
      The 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 / operation
        stage, 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 March 31, 2004, and
        therefore no amortization of this cost has been charged to operations
        for the nine month period ended March 31, 2004.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | d) | Use of Estimates
      The preparation of financial statements in conformity
        with accounting principles generally accepted in the United States of
        America requires management to make estimates and assumptions that affect
        the reported amounts of assets and liabilities and disclosure of contingent
        assets and liabilities at the date of the financial statements and the
        reported amounts of sales and expenses during the reporting periods. Areas
        where significant judgment are made include, but are not limited to: revenue
        recognition, price protection and rebate reserves, and marketing program
        accruals. Actual results could differ materially from these estimates.                                                                     
| | e) | Cash
      Cash is represented by funds on deposit with the Companys
        bankers and is unrestricted as to use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements
  March 31, 2004
  (In U.S. Dollars)
  (Unaudited)

Note 2. SIGNIFICANT ACCOUNTING POLICIES (contd)

| | (f) | Segmented Information
      Segmented information of the Companys identifiable assets and operating
        activities, is as follows:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------

| |  | March 31, 2004                | Canada |          | U.S. |   | Total | 
| |  | ----------------------------- | ------ | -------- | ---- | - | ----- | 
| |  | Current assets                | $      | 18,368   |      | $ | 0     | 
| |  | Deferred tax assets           |        | 52,500   |      |   | 0     | 
| |  | Net fixed assets              |        | 22,408   |      |   | 0     | 
| |  | Computer software development |        | 325,000  |      |   | 0     | 
| |  | Total Assets                  | $      | 418,276  |      | $ | 0     | 
| |  |                               |        |          |      |   |       | 
| |  | Revenue                       | $      | 0        |      |   | 1,089 | 
| |  | Administration costs          |        | 260,073  |      |   | 0     | 
| |  | Net (loss) for the year       | $      | (260,073 | )    | $ | 1,089 | 
| |  |                               |        |          |      |   |       | 
| |  | March 31, 2003                | Canada |          | U.S. |   | Total | 
| |  | Current assets                | $      | 8,094    |      | $ | 0     | 
| |  | Deferred tax assets           |        | 52,500   |      |   | 0     | 
| |  | Net fixed assets              |        | 36,284   |      |   | 0     | 
| |  | Computer software development |        | 325,000  |      |   | 0     | 
| |  | Total Assets                  | $      | 421,878  |      | $ | 0     | 
| |  |                               |        |          |      |   |       | 
| |  | Revenue                       | $      | 0        |      |   | 0     | 
| |  | Administration costs          |        | 253,307  |      |   | 0     | 
| |  | Net (loss) for the year       | $      | (253,307 | )    | $ | 0     | 

| | (g) | Recent Accounting Pronouncements
      In August, 2001, the FASB issued Statement of Financial
        Accounting Standards No. 143, Accounting for Asset Retirement Obligations
        (SFAS 143). SFAS 143 addresses financial accounting and reporting
        for obligations associated with the retirement of tangible long-lived
        assets and the associated asset retirement costs. SFAS 143 applies to
        all entities. It applies to legal obligations associated with the retirement
        of long-lived assets that result from the acquisition, construction, development
        and / or the normal operation of a long-lived asset, except for certain
        obligations of lessees. SFAS 143 requires that the fair value of a liability
        for an asset retirement obligation be recognized in the period in which
        it is incurred if a reasonable estimate of fair value can be made. The
        associated asset retirement costs are capitalized as part of the carrying
        amount of the long-lived asset. SFAS 143 is effective for financial statements
        issued for fiscal years beginning after June 15, 2002. The Company adopted
        SFAS 143. SFAS 143 does not have a material effect on the Companys
        results of operations, financial position or liquidity.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements March 31, 2004
  (In U.S. Dollars)
  (Unaudited)

Note 2. SIGNIFICANT ACCOUNTING POLICIES

| | (g) | Recent Accounting Pronouncements (contd)
      In November, 2002, the EITF reached a consensus on Issue
        No. 00-21 Revenue Arrangements with Multiple Deliverables
        (EITF 00-21). This issue addresses certain aspects of accounting
        for arrangement whereby a vendor performs multiple revenue-generating
        activities. This issue addresses how to determine whether an arrangement
        involving multiple deliverables contains more than one unit of accounting
        and how the related revenue should be measured and allocated to the separate
        units of accounting. This issue is effective for revenue arrangements
        entered into for fiscal periods beginning after June 15, 2003. There is
        no effect on the Company of EITF 00-21 on the Companys results of
        operations, financial position or liquidity as the Company currently has
        no multiple deliverable revenue arrangements.
      In December of 2002, the FASB issued Statement of Financial
        Accounting Standards No. 148, Accounting for Stock-Based Compensation
        and Disclosure (SFAS148). SFAS 148 addresses additional
        disclosure rules concerning stock-based compensation and three alternative
        methods for companies to choose from for those companies that have chosen
        to expense stock options under the fair value method prescribed by SFAS
        123. The Company has not issued any stock options by March 31, 2004. (See
        Note 8 Stock-Based Compensation / Pension Plan)
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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, 2003   | 15,630,000 |  | $ | 2,660,850 | 
| | Issued for cash          | 750,000    |  |   | 112,500   | 
| | Issued for notes payable | 624,166    |  |   | 62,417    | 
| | Balance, March 31, 2004  | 17,004,166 |  | $ | 2,835,767 | 

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements March 31, 2004
  (In U.S. Dollars)
  (Unaudited)

Note 4. RELATED PARTY TRANSACTIONS

| | a) | Management fees payable - $87,500                                                                                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------
| |    | (i)                                                                                                                                        
| |    | (ii)                                                                                                                                       
| | b) | Directors and Officers of
        the Company are beneficial owners of common shares of the Company, as
        follows, at March 31, 2004:

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

| | c) | Loans to the Company unpaid as at March 31, 2004 are as follows:
| | -- | ----------------------------------------------------------------

| | Netgain Management Solutions Inc. | $ | 7,660  | 
| | --------------------------------- | - | ------ | 
| | Chad D. Lee                       |   | 20,000 | 
| | Snowy Creek Resources Ltd.        |   | 7,407  | 
| | Marlene C. Schluter               |   | 10,000 | 
| |                                   | $ | 45,067 | 

Netgain Management Solutions Inc.
  is a Company owned by Mr. Chad D. Lee, Chief Executive Officer, Director and
  a shareholder of the company. Snowy Creek Resources Ltd. is a Company owned
  by Ms. Marlene C. Schluter, Chief Financial Officer, Director, Secretary, and
  Treasurer and a shareholder of the company. These loans are non interest bearing,
  are unsecured, and have no specific terms of repayment, and are disclosed as
  current liabilities in these financial statements.

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements
  March 31, 2004
  (In U.S. Dollars)
  (Unaudited)

Note 5. FIXED ASSETS - COMPUTER EQUIPMENT

The Company depreciates its computer
  equipment using the declining-balance basis at the rate of 30% per annum. The
  cost and accumulated depreciation are as follows:

| |                          | March 31, |        
| | ------------------------ | --------- | -------
| |                          |           | 2004   
| | Cost                     | $         | 117,089
| | Accumulated depreciation |           | (94,681
| | Net balance              | $         | 22,408 

Note 6. COMPUTER TECHNOLOGY AND WEBSITE COSTS

| | a) | Acquisition From Online Innovation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | b) | Computer Software Costs
        capitalized 
        By agreement dated July 30, 1999 between the Company and Stratford Internet
        Technologies (Stratford), Stratford had been engaged to create,
        maintain, upgrade and supply artwork, computer files, and coding for a
        website at www.virtuallydating.com for the amount of $400,000 US, less
        unpaid amount of $75,000 reversed in these financial statement for the
        quarter ended September 30, 2001, due to the receivership of Stratford,
        for a net amount of $325,000, which is capitalized in these financial
        statements.

Note 7. STOCK BASED COMPENSATION/ PENSION PLAN

| | a) | The Company has an Incentive Stock Plan that was approved
        in 2000 that provides for the grant, at the discretion of the Board of
        Directors, or a Committee appointed by it, of options and rights to purchase
        an aggregate of not to exceed 1,500,000 common shares of common shares
        of the Company to officers, directors, employees and consultants of the
        Company. No options have been exercised relating to this plan up to March
        31, 2004.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | There are no liabilities for pension costs at March
        31, 2004, as the Company does not have a pension plan.                                                                                                                                                                                                                                                                                                                                                                              

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements
  March 31, 2004
  (In U.S. Dollars)
  (Unaudited)

Note 8. NET LOSS PER SHARE

Net loss per common share is computed by dividing net
  loss by the weighted average of shares outstanding during the period.

Computation of basic and diluted weighted average number
  of shares outstanding:

| |                                    | March 31, |           
| | ---------------------------------- | --------- | ----------
| |                                    |           | 2004      
| | Basic                              |           | 16,433,752
| | Options                            |           | 1,500,000 
| | Diluted                            |           | 17,933,752
| |                                    |           |           
| | Computation of net loss per share: |           |           
| |                                    |           |           
| |                                    | March 31, |           
| |                                    |           | 2004      
| | Net loss per share - Basic         | $         | (0.01     
| | Net loss per share - Diluted       | $         | (0.01     

Note 9. INCOME TAXES

The Company has losses carried forward
  to future years of $2,640,214. The potential tax benefit has not been recorded,
  as an equivalent reserve has been provided due to uncertainty of application
  of the losses.

Note 10. FINANCIAL INSTRUMENTS

The Companys financial instruments
  consist of cash, accounts payable, management fees payable, and due to related
  parties. It is managements opinion that the Company is not exposed to
  significant interest, currency or credit risks arising from these financial
  instruments. The fair value of these financial instruments approximates their
  carrying values.

Note 11. LOANS PAYABLE  converted to common shares

On July 4, 2003, the Company arranged
  financing of $40,000 and issued Convertible Bridge Financing Notes, whereby
  the Company promises to pay $20,000 each to Ross Kraemer and Fortune Capital
  Management, respectively, with interest at 10% per annum, and maturity date
  of January 4,

---

ONLINE INNOVATION, INC.(A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements March 31, 2004
  (In U.S. Dollars) 
  (Unaudited)

2004. After January 4, 2004, the Holders
  shall have the right, at their options to convert the principal amount of the
  notes, together with all accrued interest into fully paid and non-assessable
  shares of the Companys common stock at a conversion price of $0.10 per
  share. These convertible bridge financing notes have been converted to common
  shares during the quarter ended March 31, 2004.

On October 1, 2003, November 1, 2003,
  the Company arranged financing of $20,000 and issued Convertible Bridge Financing
  Notes, whereby the Company promises to pay $10,000 each to Michael-John James
  Ross and Fortune Capital Management Inc., respectively with interest at 10%
  per annum, and maturity date of January 1, 2004. After January 4, 2004, the
  Holders shall have the right, at their options to convert the principal amount
  of the notes, together with all accrued interest into fully paid and non-assessable
  shares of the Companys common stock at a conversion price of $0.10 per
  share. These convertible bridge financing notes have been converted to common
  shares during the quarter ended March 31, 2004.

Note 12. CONSULTING AGREEMENTS

| | (a) | A consulting agreement between Fortune
        Capital Management and the Company is effective on August 1, 2002. The
        Company agrees to pay the Consultant a consulting fee of $2,500 per month.                                                                                                                                    
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | A consulting agreement between CEO Cast,
        Inc. and the Company is effective on January 9, 2004. The Company agrees
        to pay the consultant $12,500 upon the signing of the Agreement. In addition,
        the Company shall pay consultant $12,500 on or before the 9thday
        of February, 2004 and the 9thof March 2004.

---

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 Companys website has been fully operational since
  September 3, 2002. The Company hopes to generate revenues through the sale of
  memberships which will permit users to access the website. Prior to the full
  launch of the website, memberships were offered free of charge. Since the site
  became fully operational the Company has been working towards developing a user
  base through the sale of memberships. 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. 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.

After the website was launched the Companys intention
  was to promote the sale of memberships through various forms of marketing. The
  nature and extent of the Companys marketing efforts since the launch of
  the website have been determined in large part by the availability of capital
  to conduct marketing activities. Since the Companys revenue stream from
  the sale of memberships has been limited, the Company has had to rely on small
  equity financings to provide it with working capital for ongoing operations,
  including continuing website development and marketing. Funds available for
  marketing have, therefore, been somewhat limited. Nonetheless, the Company intends
  to continue to focus such capital as it has at its disposal on marketing the
  website with a view to increasing revenues through the sale of memberships.
  Available capital will also be utilized for maintenance and ongoing development
  of the Companys www.VirtuallyDating.com website as well as the development
  of its second revenue generating website, www.UrbanFlirt.com
  (discussed in further detail below).

The Companys initial focus over the next 12 months will
  be to secure 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.
  Specific marketing strategies and website development plans 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 single adults, 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 of May 12, 2004, the website had 73,513 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 since the launch of the website has limited
  its ability to invest money into marketing its flagship property. 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. 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 management 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

In the period covered by this report the Company focused its
  marketing efforts on pay per click search engine placements to drive traffic
  to the website with several of the major and smaller search engine providers.
  The Company also explored and tested small opt-in (permission based) email campaigns
  as a way to expose the Company's product to a broad audience. These marketing
  activities were arranged by the Company and by marketing consultants retained
  by the Company as described below.

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 to 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 pays $2,500 per month to Fortune and reimburses Fortune for expenses
  incurred in carrying out its duties under the agreement. The Agreement was originally
  for a term of 12 months but is being continued on a month to month basis by
  mutual agreement between the parties.

On February 23, 2004, the Company entered into a consulting
  agreement with R.H. Barsom Company Inc. (Barsom) pursuant to which
  Barsom has agreed to provide marketing services to increase the exposure of
  the Companys websites to single adults that would have an interest in
  becoming members of the Companys web communities. The agreement is for
  a term of 3 months. A one-time consulting fee of $5,000 is to be paid to Barsom
  pursuant to the agreement.

Investor Relations / Coroprate & Strategic Planning

On January 9, 2004, the Company entered into a consulting
  agreement with CEOcast, Inc. (CEOcast) pursuant to which CEOcast,
  Inc. agreed to provide consulting advice and services to the Company in connection
  with investor relations and similar matters. CEOcast is a webcasting company
  which broadcasts business news and content such as CEO interviews and company
  profiles over the internet. Pursuant to the agreement, CEOcast will be providing
  information respecting the Company and its business to the public on its website.
  The agreement is for a term of 3 months. A consulting fee of $12,500 per month
  is payable to CEOcast pursuant to the agreement.

On November 24, 2003 the Company entered into a consulting
  agreement with Westport Strategic Partners, Inc. (Westport) pursuant
  to which Westport was to provide an independent research report on the Companys
  business, distribute the report to potential investors, provide consultation
  to the Company on shareholder relations and assist the Company in strategic
  planning for potential mergers, acquisitions and strategic relationships. The
  agreement was for a term of 3 months, after which it was to continue on a month
  to month basis. This agreement was terminated by mutual agreement between the
  parties.

---

Additional Website Development

The Company retains the services of 3 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.

On July 15, 2002, the Company entered into a consulting agreement
  with Jon Wiggens, pursuant to which Mr. Wiggens agreed to provide graphic design
  services to the Company for the VirtuallyDating website and the Companys
  corporate website and in connection with ongoing marketing efforts. The agreement
  was originally for a term of 3 months and was subsequently continued on a month
  to month basis. This agreement has been mutually ended by both parties, but
  Mr. Wiggens continues to provide consulting services to the Company on a project
  by project basis, as described in the preceding paragraph.

Urban Flirt

The Company also recently announced that development is underway
  to launch a second revenue generating web property which will be known as UrbanFlirt
  and will be located on the web at www.urbanflirt.com. This web based community
  will feature the traditional online matchmaking components that have pioneered
  the Online Dating Industry to date. The site will feature core functionality
  such as photo upload, messaging capabilities, compatibility indicators, detailed
  matching and distance calculators. The Company's intentions are to design the
  site to appeal to the over 25-45 crowd. This demographic represents the highest
  users of Online Dating Services on the Internet today. The UrbanFlirt website
  is currently functional and is being subjected to internal testing by the Company.

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 June 15, 2004. 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. The Company intends to use available finances
  to fund ongoing operations. Funds will be utilized for general and administrative
  expenses, website maintenance and development and marketing.

---

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.
  There were no changes in the Companys internal control over financial
  reporting identified in connection with the Companys evaluation of its
  disclosure controls and procedures and the effectiveness of those procedures
  in the last fiscal quarter.

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 January 6, 2004, the Company issued 102,500 shares of its
  common stock to Michael John James Ross to repay a $10,000 loan made by Mr.
  Ross to the Company. The loan was secured by a convertible promissory note issued
  by the Company to Mr. Ross on October 1, 2003. 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 $0.10 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.

On January 2, 2004, the Company issued 101,666 shares of its
  common stock to Fortune Capital Management Inc. (Fortune) to repay
  a $10,000 loan made by Fortune to the Company. The loan was secured by a convertible
  promissory note issued by the Company to Fortune on November 1, 2003. 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 $0.10 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.

On January 6, 2004, the Company issued an additional 210,000
  shares of its common stock to Fortune to repay a $20,000 loan made by Fortune
  to the Company. The loan was secured by a convertible promissory note issued
  by the Company to Fortune on July 4, 2003. 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 $0.10 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.

On January 6, 2004, the Company issued 210,000 shares of its
  common stock to Ross Kraemer to repay a $20,000 loan made by Mr. Kraemer to
  the Company. The loan was secured by a convertible promissory note issued by
  the Company to Mr. Kraemer on July 4, 2004. 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 $0.10 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 have occurred.

Item 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 report, 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                                  
|---- | ---------------------------------------------------------------------------
|     |                                                                            
|31.1 | Rule 13a-14(a)/15d-14(a) Certification of Principal
      Executive Officer
|     |                                                                            
|31.2 | Rule 13a-14(a)/15d-14(a) Certification of Principal
      Financial Officer

|32.1 | Section 1350 Certification of Principal Executive
      Officer
|---- | ---------------------------------------------------------------
|     |                                                                
|32.2 | Section 1350 Certification of Principal Financial
      Officer

(b)No reports on form 8-K were filed during the period covered
  by this report.

---

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:   May 14, 2004 | 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: May 14, 2004

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

Date: May 14, 2004

---