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 December 31, 2002

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF
  THE EXCHANGE ACT
  For the transition period from _________ to __________________

Commission File Number: 0-29285

ONLINE INNOVATION, INC.
  (Name of Small Business Issuer in its charter)

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

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

(604) 669-7564 
  Issuers telephone number

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

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

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

Check whether the registrant filed all documents and reports required to be
  filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
  of securities under a plan confirmed by a court. 
  YES [ ] NO [ ] N/A

APPLICABLE ONLY TO CORPORATE ISSUERS

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

As of February 12, 2003, the registrants outstanding common stock consisted of 15,480,000 shares.

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

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ONLINE INNOVATION, INC.

INDEX TO FORM 10QSB

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

---

PART 1  FINANCIAL INFORMATION

Item 1  Financial Statements

Attached are the registrants unaudited financial statements
  for the six month period ended December 31, 2002, with comparative figures for
  the six month period ended December 31, 2001, and the Independent Accountants
  Report thereon.









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MOEN AND COMPANY CHARTERED ACCOUNTANTS

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

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
  December 31, 2002 and December 31, 2001, and the Statements of Income, Retained
  Earnings (Deficit), Cash Flows and Stockholders Equity for the six month
  periods then ended. These financial statements are the responsibility of the
  Companys management.

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

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

Moen and Company

Chartered Accountants

Vancouver, British Columbia, Canada 
  February 6, 2003

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ONLINE INNOVATION, INC. (A Delaware Corporation) 
  (A Development Stage Company)
  Balance Sheet 
  December 31, 2002 
  (In U.S. Dollars) (With Comparative Figures at December 31, 2001) (Unaudited)

|                                                                                                      |   | December 31, |  
|----------------------------------------------------------------------------------------------------- | - | ------------ | -
|                                                                                                      |   |              |  
|ASSETS                                                                                                |   | 2002         |  
|                                                                                                      |   |              |  
|Current Assets                                                                                        |   |              |  
|Cash                                                                                                  | $ | 43,097       |  
|Prepaid expense                                                                                       |   | 2,209        |  
|                                                                                                      |   |              |  
|                                                                                                      |   | 45,306       |  
|Deferred tax asset (Note 12(b) and 13(c))                                                             |   | 52,500       |  
|Fixed assets                                                                                          |   |              |  
|Computer equipment, at cost less accumulated
      depreciation (Note 5)                              |   | 39,753       |  
|Computer software development (Note 6(b))                                                             |   |              |  
|Application development stage costs                                                                   |   | 325,000      |  
|                                                                                                      |   |              |  
|                                                                                                      |   |              |  
|                                                                                                      | $ | 462,559      |  
|                                                                                                      |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                  |   |              |  
|Current Liabilities                                                                                   |   |              |  
|Accounts payable                                                                                      | $ | 33,285       |  
|Management fees payable (Note 4(a)                                                                    |   | 50,000       |  
|Due to related parties (Notes 4(c)                                                                    |   | 30,000       |  
|Loans payable                                                                                         |   | --           |  
|                                                                                                      |   |              |  
|                                                                                                      |   | 113,285      |  
|                                                                                                      |   |              |  
|Stockholders' Equity                                                                                  |   |              |  
|Capital Stock (Note 3)                                                                                |   |              |  
|Authorized:                                                                                           |   |              |  
|75,000,000
      common shares at $0.001 par value per share                                          |   |              |  
|Issued and outstanding
      - 15,480,000 common shares (including a subscription for 250,000 shares) |   |              |  
|(2001
      - 14,420,000 common shares)                                                               |   | 15,480       |  
|Paid in capital in
      excess of par value of stoc                                                  |   | 2,585,370    |  
|Deficit accumulated during development
      stage (note 1)                                           |   | (2,252,976   | )
|Cumulative translation adjustment (Note
      2(b))                                                   |   | 1,400        |  
|                                                                                                      |   |              |  
|                                                                                                      |   | 349,274      |  
|                                                                                                      |   |              |  
|                                                                                                      | $ | 462,559      |  
|                                                                                                      |   |              |  

Approved on Behalf of the Board

"Chad D. Lee",Chief
  Executive Officer and Director

"Marlene C. Schluter",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  |   |   | Six Months Ended |   |   | Three Months Ended |  
|                                      |   | to December 31, |   |   | December 31,     |   |   | December 31,       |  
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                      |   | 2002            |   |   | 2002             |   |   | 2001               |   |   | 2002     |   |   | 2001    |  
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Administration Costs                  |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Compensation on stock option          | $ | 150,000         |   | $ | --               |   | $ | --                 |   | $ | --       |   | $ | --      |  
|Funding agreement commitment costs    |   | 345,600         |   |   | --               |   |   | --                 |   |   | --       |   |   | --      |  
|Depreciation                          |   | 77,336          |   |   | 6,938            |   |   | 9,168              |   |   | 3,469    |   |   | 4,584   |  
|Filing and transfer agent fees        |   | 25,008          |   |   | 4,664            |   |   | 1,769              |   |   | 4,116    |   |   | 660     |  
|Financing costs                       |   | 47,550          |   |   | 25,000           |   |   | --                 |   |   | 25,000   |   |   | --      |  
|Interest on loans                     |   | 4,851           |   |   | 4,851            |   |   | --                 |   |   | --       |   |   | --      |  
|Management and consulting fees        |   | 563,235         |   |   | 55,442           |   |   | 41,994             |   |   | 29,636   |   |   | 26,994  |  
|Office expenses, net                  |   | 170,695         |   |   | 18,898           |   |   | 9,636              |   |   | 6,797    |   |   | 3,618   |  
|Option payment, mineral properties    |   | 30,000          |   |   | --               |   |   | --                 |   |   | --       |   |   | --      |  
|Professional fees                     |   | 218,036         |   |   | 8,853            |   |   | 18,091             |   |   | 6,650    |   |   | 5,365   |  
|Promotion, investor relations,        |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|and investor communications           |   | 85,144          |   |   | 540              |   |   | 227                |   |   | 540      |   |   | --      |  
|Computer technology and               |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|software development-preliminary      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|development stage costs               |   | 337,555         |   |   | 47,884           |   |   | (52,142            | ) |   | 15,708   |   |   | 21,037  |  
|Website marketing/Banner              |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|advertising costs                     |   | 217,571         |   |   | 20,827           |   |   | 6,693              |   |   | 16,503   |   |   | 1,030   |  
|Travel expenses                       |   | 32,895          |   |   | 865              |   |   | --                 |   |   | 865      |   |   | --      |  
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                      |   | 2,305,476       |   |   | 194,762          |   |   | 35,436             |   |   | 109,284  |   |   | 63,288  |  
|Deferred income taxes                 |   | (52,500         | ) |   | --               |   |   | --                 |   |   | --       |   |   | --      |  
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Net loss (profit) for the period      | $ | (2,252,976      | ) | $ | (194,762         | ) | $ | (35,436            | ) | $ | (109,284 | ) | $ | (63,288 | )
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Net loss per share, basic and diluted |   |                 |   | $ | (0.01            | ) | $ | (0.00              | ) | $ | (0.01    | ) | $ | (0.00   | )
|                                      |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  

See Accompanying Notes and Independent Accountants' Review
  Report

---

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

|                                         |   | Cumulative From |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|---------------------------------------- | - | --------------- | - | - | ---------------- | - | - | ------------------ | - | - | -------- | - | - | ------- | -
|                                         |   | Inception Date  |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                         |   | on Aug 1, 1997  |   |   | Six Months Ended |   |   | Three Months Ended |  
|                                         |   | to December 31, |   |   | December 31,     |   |   | December 31,       |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                         |   | 2002            |   |   | 2002             |   |   | 2001               |   |   | 2002     |   |   | 2001    |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Cash Provided by (Used for)              |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Operating Activities                     |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Net profit (loss) for the period         | $ | (2,252,976      | ) | $ | (194,762         | ) | $ | (35,436            | ) | $ | (109,284 | ) | $ | (63,288 | )
|Items not requiring use of cash          |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Shares issued for funding
      agreemen |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|commitment
      costs                   |   | 345,600         |   |   | --               |   |   | --                 |   |   | --       |   |   | --      |  
|Shares issued for services
      and     |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|loans
      payable                      |   | 44,750          |   |   | 33,000           |   |   | --                 |   |   | --       |   |   | --      |  
|Shares cancelled                         |   | --              |   |   | --               |   |   | (82,250            | ) |   | --       |   |   | --      |  
|Depreciation                             |   | 77,336          |   |   | 6,938            |   |   | 9,168              |   |   | 3,469    |   |   | 4,584   |  
|Cumulative translation
      adjustmen   |   | 1,400           |   |   | 1,126            |   |   | --                 |   |   | --       |   |   | --      |  
|Changes in non-cash working capital item |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Deferred income tax                      |   | (52,500         | ) |   | --               |   |   | --                 |   |   | --       |   |   | --      |  
|Prepaid expense                          |   | (2,209          | ) |   | --               |   |   | (2,209             | ) |   | --       |   |   | (2,209  | )
|Accounts payable                         |   | 33,285          |   |   | (13,242          | ) |   | 35,215             |   |   | 5,250    |   |   | 9,763   |  
|Management fees payable                  |   | 50,000          |   |   | (2,500           | ) |   | --                 |   |   | (5,000   | ) |   | --      |  
|Agreement payable                        |   | --              |   |   | --               |   |   | (75,000            | ) |   | --       |   |   | --      |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                         |   | (1,755,314      | ) |   | (169,440         | ) |   | (150,512           | ) |   | (105,565 | ) |   | (51,150 | )
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Investing Activities                     |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Computer software developmen             |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Application development
      stage cost |   | (325,000        | ) |   | --               |   |   | 75,000             |   |   | --       |   |   | --      |  
|Fixed assets purchased                   |   | (117,089        | ) |   | (435             | ) |   | (2,460             | ) |   | (435     | ) |   | (441    | )
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                         |   | (442,089        | ) |   | (435             | ) |   | 72,540             |   |   | (435     | ) |   | (441    | )
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Financing Activities                     |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Capital stock subscribed                 |   | 2,210,500       |   |   | 335,000          |   |   | --                 |   |   | 125,000  |   |   | --      |  
|Loan payable (repayment                  |   | --              |   |   | (85,000          | ) |   | 66,452             |   |   | --       |   |   | 36,452  |  
|Loan from Fusion Capital (repayment      |   | --              |   |   | (50,000          | ) |   | --                 |   |   | --       |   |   | --      |  
|Due to related parties                   |   | 30,000          |   |   | --               |   |   | 5,161              |   |   | --       |   |   | 5,161   |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                         |   | 2,240,500       |   |   | 200,000          |   |   | 71,613             |   |   | 125,000  |   |   | 41,613  |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Cash increase (decrease)                 |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|during the period                        |   | 43,097          |   |   | 30,125           |   |   | (6,359             | ) |   | 19,000   |   |   | (9,978  | )
|Cash, Beginning of period                |   | --              |   |   | 12,972           |   |   | 12,838             |   |   | 24,097   |   |   | 16,457  |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  
|Cash, End of period                      | $ | 43,097          |   | $ | 43,097           |   | $ | 6,479              |   | $ | 43,097   |   | $ | 6,479   |  
|                                         |   |                 |   |   |                  |   |   |                    |   |   |          |   |   |         |  

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  |   |   | Six Months Ended |   |   | Three Months Ended |  
|                                 |   | of Aug 1, 1997  |   |   | December 31,     |   |   | December 31,       |  
|                                 |   | to December 31, |   |   |                  |   |   |                    |   |   |            |   |   |            |  
|                                 |   | 2002            |   |   | 2002             |   |   | 2001               |   |   | 2002       |   |   | 2001       |  
|                                 |   |                 |   |   |                  |   |   |                    |   |   |            |   |   |            |  
|                                 |   |                 |   |   |                  |   |   |                    |   |   |            |   |   |            |  
|Balance (deficit), beginning     |   |                 |   |   |                  |   |   |                    |   |   |            |   |   |            |  
|of period                        | $ | --              |   | $ | (2,058,214       | ) | $ | (1,922,937         | ) | $ | (2,143,692 | ) | $ | (1,895,085 | )
|                                 |   |                 |   |   |                  |   |   |                    |   |   |            |   |   |            |  
|Net profit (loss) for the period |   | (2,252,976      | ) |   | (194,762         | ) |   | (35,436            | ) |   | (109,284   | ) |   | (63,288    | )
|                                 |   |                 |   |   |                  |   |   |                    |   |   |            |   |   |            |  
|                                 |   |                 |   |   |                  |   |   |                    |   |   |            |   |   |            |  
|Balance (deficit), end of period | $ | (2,252,976      | ) | $ | (2,252,976       | ) | $ | (1,958,373         | ) | $ | (2,252,976 | ) | $ | (1,958,373 | )
|                                 |   |                 |   |   |                  |   |   |                    |   |   |            |   |   |            |  

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 December 31, 2002 
  (In U.S. Dollars) 
  (Unaudited)

|                                                           | Number of  |   |         |   | Additional |   | Total      |   | Retained    |   |             |   | Total        |  
|---------------------------------------------------------- | ---------- | - | ------- | - | ---------- | - | ---------- | - | ----------- | - | ----------- | - | ------------ | -
|                                                           | Common     |   | par     |   | Paid-in    |   | Capital    |   | Earnings    |   | Cumulative  |   | Stockholders |  
|                                                           | Shares     |   | Value   |   | Capital    |   | Stock      |   | (Deficit)   |   | Translation |   | Equity       |  
|                                                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|Net loss for eleven month period ended June
      30, 1998 |            |   |         |   |            |   |            |   | $(144,175   | ) |             |   | $(144,175    | )
|Issued for cash, @$0.01                                    |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|October
      23, 1997                                     | 1,500,000  |   | $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 translation adjustment                          |            |   |         |   |            |   |            |   |             |   | (1,055      | ) | (1,055       | )
|Issued for cash, @$0.50                                    |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|April
      6, 1999                                        | 20,000     |   | 20      |   | 9,980      |   | 10,000     |   |             |   |             |   | 10,000       |  
|Issued for cash, @$0.50                                    |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|April
      6, 1999                                        | 100,000    |   | 100     |   | 49,900     |   | 50,000     |   |             |   |             |   | 50,000       |  
|Issued for private business(note 7), @$0.50                |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|April
      2, 1999                                        | 400,000    |   | 400     |   | 199,600    |   | 200,000    |   |             |   |             |   | 200,000      |  
|Issued for cash(note 14), @$0.50                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|April
      15, 1999                                       | 1,600,000  |   | 1,600   |   | 798,400    |   | 800,000    |   |             |   |             |   | 800,000      |  
|                                                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|Balance, June 30, 1999                                     | 12,705,000 |   | 12,705  |   | 1,255,295  |   | 1,268,000  |   | (622,672    | ) | (1,055      | ) | 644,273      |  
|Cumulative translation adjustment                          |            |   |         |   |            |   |            |   |             |   | 543         |   | 543          |  
|Shares subscribed and fully
      paid, @$0.50             |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|January
      4, 2000                                      | 450,000    |   | 450     |   | 224,550    |   | 225,000    |   |             |   |             |   | 225,000      |  
|Net loss for year ended
      June 30, 2000                |            |   |         |   |            |   |            |   | (503,489    | ) |             |   | (503,489     | )
|Issued for exercise of option
      @ $0.50                |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|March
      13, 2000                                       | 100,000    |   | 100     |   | 49,900     |   | 50,000     |   |             |   |             |   | 50,000       |  
|Compensation on stock options                              |            |   |         |   | 30,000     |   | 30,000     |   |             |   |             |   | 30,000       |  
|Exercise of warrants @ $0.50                               |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|May 9,
      2000                                          | 50,000     |   | 50      |   | 24,950     |   | 25,000     |   |             |   |             |   | 25,000       |  
|Exercise of warrants @ $0.60                               |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|June 16,
      2000                                        | 66,667     |   | 67      |   | 39,933     |   | 40,000     |   |             |   |             |   | 40,000       |  
|                                                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|Balance, June 30, 2000                                     | 13,371,667 |   | 13,372  |   | 1,624,628  |   | 1,638,000  |   | (1,126,161  | ) | (512        | ) | 511,327      |  
|Exercise of warrants @$0.60                                |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|August
      17, 2000                                      | 83,333     |   | 83      |   | 49,917     |   | 50,000     |   |             |   |             |   | 50,000       |  
|Exercise of warrants @$0.60                                |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|Februay
      9, 2001                                      | 250,000    |   | 250     |   | 149,750    |   | 150,000    |   |             |   |             |   | 150,000      |  
|Issued for services at an
      ascribed                   |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|price
      of $0.47 per share on                          |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|June 11,
      2001                                        | 200,000    |   | 200     |   | 93,800     |   | 94,000     |   |             |   |             |   | 94,000       |  
|Issue for cash, @$0.75                                     |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|June 19,
      2001                                        | 50,000     |   | 50      |   | 37,450     |   | 37,500     |   |             |   |             |   | 37,500       |  
|Issued as commitment shares
      at an ascribed           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|price
      of $0.54 per share on                          |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|June 25,
      2001                                        | 640,000    |   | 640     |   | 344,960    |   | 345,600    |   |             |   |             |   | 345,600      |  
|Net loss for year ended
      June 30, 2001                |            |   |         |   |            |   |            |   | (796,776    | ) |             |   | (796,776     | )
|Cumulative translation adjustment                          |            |   |         |   |            |   |            |   |             |   | 592         |   | 592          |  
|                                                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|Balance, June 30, 2001                                     | 14,595,000 |   | 14,595  |   | 2,300,505  |   | 2,315,100  |   | (1,922,937  | ) | 80          |   | 392,243      |  
|Cancellation of 175,000
      shares on                    |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|August
      23, 2001                                      | (175,000   | ) | (175    | ) | (82,075    | ) | (82,250    | ) |             |   |             |   | (82,250      | )
|Cumulative translation adjustment                          |            |   |         |   |            |   |            |   |             |   | 194         |   | 194          |  
|Net income for period ended
      June 30, 2002            |            |   |         |   |            |   |            |   | (135,277    | ) |             |   | (135,277     | )
|                                                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|Balance, June 30, 2002                                     | 14,420,000 |   | $14,420 |   | $2,218,430 |   | $2,232,850 |   | ($2,058,214 | ) | $274        |   | $174,910     |  
|Issued for cash @ $0.30                                    |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|July 22,
      2002                                        | 100,000    |   | 100     |   | 29,900     |   | 30,000     |   |             |   |             |   | 30,000       |  
|Issued for cash @ $0.30                                    |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|July 26,
      2002                                        | 600,000    |   | 600     |   | 179,400    |   | 180,000    |   |             |   |             |   | 180,000      |  
|Issued for loan payable
      @ $0.30                      |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|August
      31, 2002                                      | 110,000    |   | 110     |   | 32,890     |   | 33,000     |   |             |   |             |   | 33,000       |  
|Shares subscripted and paid
      for cash @$0.50          |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|November
      6, 2002 (see Note 3(c))                     | 250,000    |   | 250     |   | 124,750    |   | 125,000    |   |             |   |             |   | 125,000      |  
|Cumulative translation adjustment                          |            |   |         |   |            |   |            |   |             |   | 1,126       |   | 1,126        |  
|Net loss for period ended
      December 31, 2002          |            |   |         |   |            |   |            |   | (194,762    | ) |             |   | (194,762     | )
|                                                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  
|Balance, December 31, 2002                                 | 15,480,000 |   | $15,480 |   | $2,585,370 |   | $2,600,850 |   | ($2,252,976 | ) | $1,400      |   | $349,274     |  
|                                                           |            |   |         |   |            |   |            |   |             |   |             |   |              |  

See Accompanying Notes and Independent Accountants' Review
  Report

---

ONLINE INNOVATION, INC. (A Delaware Corporation)
  (A Development Stage Company) 
  Notes to Financial Statements 
  December 31, 2002
  (In U.S. Dollars)
  (Unaudited)



|Note 1. | BUSINESS OPERATIONS            
|------- | -------------------------------
|        |                                
|        | a)                             
|        |                                
|        | b)                             
|        |                                
|Note 2. | SIGNIFICANT ACCOUNTING POLICIES
|        |                                
|        | a)                             
|        |                                
|        | b)                             

| |                                              |   | Quarter Ended | 
| | -------------------------------------------- | - | ------------- | 
| |                                              |   | December 31,  | 
| |                                              |   |               | 
| |                                              |   | 2002          | 
| |                                              |   |               | 
| | Beginning balance, September 30, 2002 & 2001 | $ | 1,400         | 
| | Changes during the period                    |   | --            | 
| |                                              |   |               | 
| | Ending balance, December 31, 2002 & 2001     | $ | 1,400         | 
| |                                              |   |               | 

---

ONLINE INNOVATION, INC. (A Delaware Corporation)
  (A Development Stage Company) 
  Notes to Financial Statements 
  December 31, 2002 
  (In U.S. Dollars) 
  (Unaudited)

|Note 2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
      Capital accounts are translated at their historical exchange rates when
        the capital stock is issued.
      The effect of exchange rate changes 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.
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                   
|        | c)                                                                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                   
|Note 3. | CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                   
|        | a)                                                                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                   
|        | b)                                                                                                                                                                                                                                                                                                                                                                                

| |                                       | Shares     |  |   | $         | 
| | ------------------------------------- | ---------- |  | - | --------- | 
| |                                       |            |  |   |           | 
| | Balance, June 30, 2002                | 14,420,000 |  | $ | 2,232,850 | 
| | Issued for cash during period         | 950,000    |  |   | 335,000   | 
| | Issued for loan payable during period | 110,000    |  |   | 33,000    | 
| |                                       |            |  |   |           | 
| | Balance, December 31, 2002            | 15,480,000 |  | $ | 2,600,850 | 
| |                                       |            |  |   |           | 

| | c) | Shares to be processed by Transfer Agent 
        The abovementioned issued shares include a subscription for 250,000 shares,
        subscripted and paid in November 2002. The documentation required to issue
        the shares has not been completed, and accordingly, the shares have not
        been processed by the Transfer Agent of the Company.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 4. | RELATED PARTY TRANSACTIONS
|------- | --------------------------
|        |                           
|        | (a)                       
|        |                           
|        |                           
|        |                           
|        |                           

---

ONLINE INNOVATION, INC. (A Delaware Corporation) 
  (A Development Stage Company) 
  Notes to Financial Statements 
  December 31, 2002 
  (In U.S. Dollars) 
  (Unaudited)

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

| | 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 December 31, 2002 are as follows:
| | --- | -------------------------------------------------------------------

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

|        |                                                                                                                                                                                                                            | These loans are non interest bearing, are unsecured,
        and have no specific terms of repayment, and are disclosed as current
        liabilities in these financial statements.
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                            |                                                                                                                                                                                      
|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:

| |                          |   | December 31, |  
| | ------------------------ | - | ------------ | -
| |                          |   |              |  
| |                          |   | 2002         |  
| |                          |   |              |  
| | Cost                     | $ | 117,089      |  
| | Accumulated depreciation |   | (77,336      | )
| |                          |   |              |  
| | Net balance              | $ | 39,753       |  
| |                          |   |              |  

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

---

ONLINE INNOVATION, INC. (A Delaware Corporation) 
  (A Development Stage Company) 
  Notes to Financial Statements 
  December 31, 2002 
  (In U.S. Dollars) 
  (Unaudited)

|Note 7.  | LEASE OBLIGATIONS
      Lease of Premises
      The Company entered into leases for two adjoining offices
        located at #118-1118 Homer Street, Vancouver and #119-1118 Homer Street,
        respectively, effective November 1, 2002 with S & W 97 Enterprises
        Ltd. for the term of one year for monthly rent and costs of CAD$900 and
        CAD$700, respectively, with options to renew the leases for a further
        term of one year, each.
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 8.  | COMPENSATION/STOCK OPTION/DEFERRED COMPENSATION
      ARRANGEMENT                                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 9.  | NET LOSS PER SHARE
      Net loss per common share is computed by dividing net
        loss by the weighted average of shares outstanding during the period.                                                                                                                                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 10. | INCOME TAXES
      The Company has losses carried forward to future years
        of $2,252,976. The potential tax benefit has not been recorded, as an
        equivalent reserve has been provided due to uncertainty of application
        of the losses.                                                                                                                                                                                                      
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 11. | 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 12  | CONSULTING AGREEMENTS
      National Financial Communications Corp.                                                                                                                                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                

---

ONLINE INNOVATION, INC. (A Delaware Corporation)
  (A Development Stage Company)
  Notes to Financial Statements 
  December 31, 2002 
  (In U.S. Dollars) 
  (Unaudited)

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

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

|Note 13. FORDEE MANAGEMENT COMPANY
|----------------------------------
|                                  
|                                  
|                                  
|                                  
|                                  
|                                  

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

|Note 14. | COMMON STOCK PURCHASE AGREEMENT WITH FUSION CAPITAL FUND II, LCC
      On June 25, 2001, as disclosed in the Companys
        Form 8K dated July 6, 2001, Online Innovation, Inc. entered into a Common
        Stock Purchase Agreement with Fusion Capital Fund II, LLC, a Chicago based
        institutional investor. Pursuant to the Agreement, and subject to certain
        terms and conditions, Fusion has agreed to purchase $6,000,000 of the
        Company's common stock.
      Under the Agreement, the Company is not able to commence
        sales of its common stock to Fusion, and Fusion is not obligated to make
        any purchases of the Company's common stock, until the Company has filed
        a registration statement under the Securities Act of 1933 with the Securities
        and Exchange Commission. The Company has not filed a registration statement
        surrounding the Common Stock Purchase Agreement because of the current
        market conditions but will do so when management deems it to be appropriate.
      The 640,000 commitment shares issued pursuant to the
        Agreement are recorded as issued at an ascribed price of $0.54 per share
        for $345,600, during the fiscal year ended June 30, 2001.
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

ONLINE INNOVATION, INC. (A Delaware Corporation) 
  (A Development Stage Company) 
  Notes to Financial Statements 
  December 31, 2002 
  (In U.S. Dollars) 
  (Unaudited)

|Note 15. CONSULTING AGREEMENTS
|------------------------------
|                              
|                              
|                              
|                              
|                              
|                              

---

Item 2  Plan of Operation

General

The Company's business is conducted
  through its website, www.VirtuallyDating.com. The primary focus of the www.VirtuallyDating.com
  website is matchmaking. In addition to providing matchmaking services for single
  adults through a specialized search engine for members, the site provides various
  interactive, entertainment related components that facilitate social interaction
  between members. The website became fully operational on September 3, 2002,
  when the e-commerce portion of the website and certain value added components
  were completed.

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

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

Forward Looking Statements

All statements, other than statements of historical facts,
  included in this report that address activities, events or developments that
  the Company expects, believes, intends or anticipates will or may occur in the
  future, are forward-looking statements. Forward-looking statements are inherently
  subject to risks and uncertainties, many of which cannot be predicted with accuracy
  and some of which might not even be anticipated. Future events and actual results,
  financial and otherwise, could differ materially from those set forth in or
  contemplated by the forward-looking statements herein. These risks and uncertainties
  include, but are not limited to, the Company's reliance on current revenues;
  the uncertainties associated with the introduction of new products/services;
  management of growth, including the ability to attract and retain qualified
  employees; the ability to integrate acquisitions made by the Company and the
  costs associated with such acquisitions; dependence on its principal executive
  officer; substantial competition from larger companies with greater financial
  and other resources than the Company; the success of its marketing strategy;
  its dependence on suppliers for some of its products; currency fluctuations
  and other risks associated with foreign sales and foreign operations; quarterly
  fluctuations in revenues, income and overhead expense; and potential product

---

liability risk associated with its existing and future products.
  Readers are cautioned not to put undue reliance on forward-looking statements.
  The Company disclaims any intent or obligation to update publicly these forward-looking
  statements, whether as a result of new information, future events or otherwise.

Marketing Strategies

General

Management believes that marketing will be the key to the
  Company's success in the short term and in the long term. As a result, management
  intends to focus as much of its energies as possible in the upcoming 12 months
  on marketing activities. The Company intends to advertise online, through print
  media and possibly, depending on the resources available, through television,
  radio and billboards. The Companys goal is to capture 50,000 subscribing
  members in each of the three years following the launch of the website, for
  a total of 150,000 members within three years of launch. The target market for
  the Company's service is 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.

The website was launched in July 2000, but the e-commerce
  component of the website, which includes the fee payment infrastructure, was
  not operational until September 3, 2002. Prior to September 3, 2002, therefore,
  memberships were offered free of charge. Registered members as of September
  3, 2002 were given 30 days to decide whether to continue as members and pay
  membership fees. The Company is currently offering free 10-day trials and an
  introductory special in which users may purchase a 1-year membership for $19.95.
  As of February 13, 2003, the website had 42,985 registered members. The Company
  hopes to increase this number once it has secured the financing necessary to
  undertake more intensive marketing activities. The Companys inability
  to secure adequate financing over the past fiscal year has limited its ability
  to spend money on marketing. The Companys ability to undertake marketing
  activities in the upcoming 12 months will be dependent on its ability to secure
  financing. Readers should refer to the section entitled Cash Requirements
  for a discussion of the Companys attempts to raise capital in the past
  quarter and its plans to raise capital in the upcoming year.

Online Advertising

Online advertising can take a number of different forms. Banner
  advertising is the most common form. 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

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

Additional Website Development

The Company retains the services
  of 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.

In addition to the foregoing, on July 15, 2002, the Company
  entered into a consulting agreement with Jon Wiggens, pursuant to which Mr.
  Wiggens has agreed to provide graphic design services to the Company for both
  the VirtuallyDating website and the Companys corporate website. In addition,
  Mr. Wiggens will provide the Company with graphic design services in connection
  with its ongoing marketing efforts, in the areas of both print media and online
  marketing. The agreement was originally for a term of 3 months but is currently
  being continued on a month to month basis. The

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Company is required to pay Mr. Wiggens a monthly fee of $3,000
  (CDN) for services performed under the agreement and to reimburse Mr. Wiggens
  for expenses incurred in carrying out his duties under the agreement.

Purchase of Equipment

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

Employees

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

Cash Requirements

The Company currently has sufficient
  working capital to meet its operating requirements until March 31, 2003. In
  order to fund business activity beyond this date, the Company will need to arrange
  additional financing. Website development and marketing efforts will be dependent
  on the Companys ability to raise such additional financing. Specific plans
  related to marketing and any additional website development which may occur
  in the upcoming months will be devised once financing has been completed and
  management knows what funds will be available for these purposes.

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

During the period covered by this report the Company conducted an equity financing pursuant to which it raised $125,000. The Company sold a total of 250,000 units at a price of $0.50 per unit to a single purchaser under the financing.  Each unit
consisted of one common share and one share purchase warrant.  Each warrant entitles the purchaser to purchase one additional share of the Companys common stock at a price of $0.50 at any time during the first year after the purchase of the
units or at a price of $0.60 at any time during the second year after the purchase of the units. The warrants are exercisable for a period of two years after the purchase of the units.

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

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Item 3  Controls And Procedures

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

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

PART II  OTHER INFORMATION

Item 1  Legal Proceedings

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

Item 2 -Change in Securities

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

On November 6, 2002, the Company completed a sale of 250,000
  units at a price of $0.50 per unit for aggregate cash proceeds of $125,000.
  The units were issued to Mr. Gary Carson Delf. Each unit consisted of one share
  of the Companys common stock and one share purchase warrant. Each warrant
  entitles the purchaser to purchase one additional share of the Companys
  common stock at a price of $0.50 at any time during the first year after the
  purchase of the units or at a price of $0.60 at any time during the second year
  after the purchase of the units. The warrants are exercisable for a period of
  two years after the purchase of the units. The units were issued without registration
  under the Securities Act in reliance on the safe harbor provisions of Regulation
  S promulgated under the Securities Act. Neither of the purchasers of the securities
  was a U.S. person as that term is defined in Rule 902(o) of Regulation
  S and the sale of the securities constituted an offshore transaction
  as that term is defined in Rule 902(i) of Regulation S.

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Item 3  Defaults Upon Senior Securities

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

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      
|    |         
|    | 99.1    
|    |         
|    | 99.2    

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

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SIGNATURES

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

|Date: | February 14, 2003 |  | ONLINE INNOVATION, INC.          
|----- | ----------------- |  | ---------------------------------
|      |                   |  | (Registrant)                     
|      |                   |  |                                  
|      |                   |  |                                  
|      |                   |  | By: //s// Chad D. Lee            
|      |                   |  |                                  
|      |                   |  | Chad D. Lee, President, Director,
|      |                   |  | Principal Executive Officer      
|      |                   |  |                                  
|      |                   |  | By: //s// Marlene C. Schluter    
|      |                   |  |                                  
|      |                   |  | Marlene C. Schluter, Director,   
|      |                   |  | Principal Financial Officer      

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

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

Date: February 14, 2003

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

Date: February 14, 2003

---

CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER

I, Chad D. Lee certify that:

|1. | I have reviewed this quarterly report on Form
      10-QSB of Online Innovation, Inc. (the Company);                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                               
|2. | Based on my knowledge, this
        quarterly report does not contain any untrue statement of a material fact
        or omit to state a material fact necessary to make the statements made,
        in light of the circumstances under which such statements were made, not
        misleading with respect to the period covered by this quarterly report;
|   |                                                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the
        financial statements, and other financial information included in this
        quarterly report, fairly present in all material respects the financial
        condition, results of operations and cash flows of the Company as of,
        and for, the periods presented in this quarterly report;                      
|   |                                                                                                                                                                                                                                                                                                                                                               
|4. | The registrants other
        certifying officers and I are responsible for establishing and maintaining
        disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
        and 15d-14) for the registrant and have:                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|5. | The registrants other
        certifying officers and I have disclosed, based on our most recent evaluation,
        to the registrants auditors and the audit committee of registrants
        board of directors (or persons performing the equivalent function):                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                            

---

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

Date: February 14, 2003

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

---

CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER

I, Marlene C. Schluter certify that:

|1. | I have reviewed this quarterly report on Form
      10-QSB of Online Innovation, Inc. (the Company);                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                               
|2. | Based on my knowledge,
        this quarterly report does not contain any untrue statement of a material
        fact or omit to state a material fact necessary to make the statements
        made, in light of the circumstances under which such statements were made,
        not misleading with respect to the period covered by this quarterly report;
|   |                                                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge,
        the financial statements, and other financial information included in
        this quarterly report, fairly present in all material respects the financial
        condition, results of operations and cash flows of the Company as of,
        and for, the periods presented in this quarterly report;                      
|   |                                                                                                                                                                                                                                                                                                                                                               
|4. | The registrants other
        certifying officers and I are responsible for establishing and maintaining
        disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
        and 15d-14) for the registrant and have:                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|5. | The registrants other
        certifying officers and I have disclosed, based on our most recent evaluation,
        to the registrants auditors and the audit committee of registrants
        board of directors (or persons performing the equivalent function):                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                            

---

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

Date: February 14, 2003

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

---

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

In connection with the Quarterly Report of Online Innovation,
  Inc. (the "Company") on Form 10-QSB for the period ending December 31, 2002
  as filed with the Securities and Exchange Commission (the "Report"), I, Chad
  D. Lee, Principal Executive Officer of the Company, certify, pursuant to 18
  U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, that:

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

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

Date: February 14, 2003

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

---

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

In connection with the Quarterly Report of Online Innovation,
  Inc. (the "Company") on Form 10-QSB for the period ending December 31, 2002
  as filed with the Securities and Exchange Commission (the "Report"), I, Marlene
  C. Schluter, Principal Financial Officer of the Company, certify, pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, that:

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

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

Date: February 14, 2003

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

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