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 June 30, 2000

     ( ) Transition report under section 13 or 15(d) of the Securities  Exchange
Act of 1934


               For the transition period from -------- to --------

                         Commission file number 0-22341

                              AUGMENT SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)
                  Delaware                                 04-3089539
                  --------                                 ----------
         (State or other jurisdiction of                (I. R. S. Employer
         incorporation or organization)               identification No.)

                       P.O. Box 1111, West Newbury, MA, 01985
                         (Address of principal executive
                               offices)(Zip Code)

                                 (781) 270-9678
              (Registrant's telephone number, including area code)


                 Transitional small Business Disclosure Format:

                                  Yes       No X


Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirement for the past 90 days.

(1) Yes  NO X         (2) Yes X  NO

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
stock, as of the latest practicable dare: As of August 09, 2000.

               Class                                Outstanding at August 9,2000
               -----                                ----------------------------
Common stock, $.01 par value per share                        15,778,406
<PAGE>
                              Augment Systems, Inc.

                          Index to financial Statements


Report of Independent Certified Public Accountants


PART I       FINANCIAL INFORMATION

  ITEM 1     Financial Statements

             Balance sheet as of and June 30, 2000

             Results of operations for the six months ended
              June 30, 2000  and 1999

             Results of operations for the three month period ended
              June 30, 2000 and June 30, 1999

             Statements of cash flows for the six months ended
              June 30, 2000 and 1999

             Notes to financial statements

  ITEM 2     Management's Discussion and Analysis of
              Financial Condition and Results of Operations


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 Security-Holders
  ITEM 5     Other Information
  ITEM 6     Exhibits and Reports on Form 8-K
<PAGE>

                              Augment Systems, Inc.

                                  Balance Sheet

                                    (Note 1)

<TABLE>
                                                                  June 30,
                                                                   2000
                                                                 ---------
       Assets

Current assets:
<S>                                                                <C>

   Cash                                                        $  105,596
                                                               ----------

Total current assets                                           $  105,596
                                                               ==========


       Liabilities and Stockholders' Deficit

Current liabilities:
   Accounts payable                                           $    54,942
   Accrued expenses                                               274,342
   Bridge financing                                             1,395,701
   Convertible promissory notes                                     6,432
   Current portion of obligations under
     capital leases                                                46,760
                                                               ----------

     Total current liabilities                                  1,778,177
                                                              -----------

Commitments

Stockholders' deficit:


   Preferred stock, $.01 par value; 2,000,000 shares
    authorized, none issued                                           --
   Common stock, $.01 par value; 50,000,000 shares authorized;
     12,498,951 shares issued and outstanding at
     June 30,2000                                                 124,989
   Additional paid-in capital                                  21,804,866
   Deficit                                                    (23,602,436)
                                                              -----------
     Total stockholders' deficit                              ( 1,672,581)
                                                              -----------

     Total liabilities and stockholders' deficit            $     105,596
                                                              ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.


<PAGE>

                              Augment Systems, Inc.

                            Statements of Operations



<TABLE>

                                                       June 30,      June 30,
                                                         2000         1999
                                                      ---------     ---------

<S>                                                        <C>      <C>

Net sales                                             $     --     $ 175,000
Cost of sales                                               --            --
                                                     ---------     ---------
Gross margin                                                --       175,000
                                                     ---------     ---------
Operating expenses:

   General and administrative expenses                  68,100        35,500
   Refund of prior years expenses                    (  19,934)           --
                                                      --------     ---------
    Total operating expenses                            48,166        35,500
                                                      --------     ---------
    Gain (loss) from Operations                      (  48,166)      139,500
                                                      --------     ---------
Other income (expense):

     Interest income (expense)                       (  60,000)       22,612
                                                     ----------    ---------
     Total other income (expense)                    (  60,000)       22,612
                                                     ---------     ---------
  Net Income (loss)                                $ ( 108,166)    $ 162,112
                                                     =========     =========
Earnings per share

Net (loss) per share of common stock:
   Basic and diluted                                $  (0.01)         $ .01
                                                        ====          =====

Weighted average number of shares outstanding     12,198,951     11,898,951
                                                  ==========     ==========

The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>

                              Augment Systems, Inc.

                            Statements of Operations



<TABLE>

                                                   April 1,2000   April 1,1999
                                                      through        through
                                                   June 30, 2000  June 30, 1999
                                                   -------------- --------------

<S>                                                        <C>      <C>

Net sales                                             $     --      $ 175,000
Cost of sales                                               --             --
                                                       -------       --------
Gross margin                                                --        175,000
                                                       -------       --------
Operating expenses:

   General and administrative expenses                (  1,900)     ( 163,969)
   Refund of prior years expenses                     ( 19,934)            --
                                                      --------      ---------
    Total operating expenses                          ( 21,834)     ( 163,969)
                                                      --------      ---------
    Gain (loss)from Operations                        ( 21,834)       338,969
                                                      --------      ---------
Other income (expense):

     Interest income (expense)                       (  60,000)     ( 169,886)
                                                     ----------     ---------
     Total other expense                             (  60,000)     ( 169,886)
                                                     ---------      ---------
  Net Income (loss)                                $ (  38,166)     $ 169,083
                                                     =========      =========
Number of shares
Net (loss) per share of common stock:
   Basic and diluted                                $  (0.01)         N/A
                                                        ====          ===

The accompanying notes are an integral part of the financial statements.

</TABLE>
<PAGE>


                             Augment Systems, Inc.

                            Statements of Cash Flows
<TABLE>

                                                         June 30,     June 30,
                                                           2000        1999
                                                        ---------    ---------

Cash flows from operating activities:
<S>                                                      <C>           <C>

   Net loss                                        $   ( 108,166)    $  162,112
   Adjustments to reconcile net loss to net
   cash used for operating activities:
     Changes in operating assets and liabilities:
       Prepaid expenses                                       --             --
       Other assets                                           --         98,936
       Accounts payable                                       --      ( 312,435)
       Accrued expenses                                   79,342      (  32,745)
                                                        --------     ----------
     Net cash used for operating activities            (  28,824)     (  84,132)


   Cash flows from investing activities:
        Capital expenditures                                  --             --
                                                       ---------      ---------
   Net cash used for investing activities                     --             --
                                                       ---------      ---------

   Cash flows from financing activities:
     Proceeds from issuance of common stock                6,000             --
     Additional Paid-in-Capital                           54,000             --
     Proceeds from bridge financing                           --             --
     Payments on bridge financing                             --             --
                                                       ---------      ---------
   Net cash provided by financing activities              60,000             --
                                                       ---------      ---------

   Net increase (decrease) in cash                        31,176       ( 84,132)
   Cash, beginning of period                              74,420        187,815
                                                       ---------     ----------
   Cash, end of period                               $   105,596     $  103,683
                                                       =========     ==========

The accompanying notes are an integral part of the financial statements.

</TABLE>

<PAGE>
                             Augment Systems, Inc.
                         Notes to Financial Statements

1.    Organization, Business and Basis of Presentation:

      The Company was incorporated in 1990 to develop and distribute fiber optic
printed circuit boards in the publishing and printing  markets.  The fiber optic
products had limited  success and in fiscal 1994 the Company  began  phasing out
the fiber optic  operations and began the transition into a systems  integration
and engineering consulting business. In 1995, the Company made a strategic shift
in its business operation into the server market.

     From  October  1995 and through  March 1997,  the Company had operated as a
development  stage  company and had been  engaged  principally  in research  and
development,  recruitment  of personnel  and financing  activities.  During this
time,  the  Company  had  engaged in limited  marketing  activities  and had not
commenced  the  selling  of  its  initial  products,  which  are  high-end  file
management  network systems.  During the second quarter ended June 30, 1997, the
Company  commenced  commercial  shipment of its server  product  and  recognized
initial revenue in April 1997.

      The  Company's  initial  target  market  was  the  electronic   publishing
industry,  which  requires the rapid and  efficient  movement of large image and
data files over networks.  In September  1997, the Company  introduced a windows
NT-based client server for its file management network systems.

      Although  the Company  commenced  shipment of its products in fiscal 1997,
the  revenues  recognized  were  less than  originally  anticipated  by  Company
management. The shortfall in 1997 revenues was attributed to product development
delays and problems with the Company's initial products sold. Such shortfalls in
revenues continued throughout the course of fiscal 1998.

      In November  1998,  the Company was informed by the  investment  bank that
provided  the  September  1998  bridge  financing,  that they would be unable to
secure the additional  funding required to repay the outstanding bridge loan and
provide the Company with the necessary  working  capital to support its business
plan and ongoing  operations.  The Company began to seek alternative  financing,
but was unable to secure the necessary funds.

      In  January  1999,  the  Board of  Directors  decided  to  accomplish  the
following:

     1. Seek buyers,  strategic partners,  and merger  opportunities to make the
Company economically viable.

     2. Suspend ongoing operations, layoff all but one of its employees, dispose
of all assets, attempt to settle any outstanding short and long term debts, seek
buyers  or  strategic  partners  for the  further  development  of its  existing
technology as well as explore merger opportunities.

     The secured  creditors formed a representative  committee of two people who
initiated a plan to auction off all remaining  inventory and  substantially  all
remaining  fixed assets  (retaining  only those assets  necessary to effectively
shut down operations, valued at approximately $10,000). On January 28, 1999 with
the aid of the  committee-appointed  auctioneer,  the Company  held the auction,
with proceeds amounting to approximately  $65,000,  indicating that the carrying
value of such assets exceeded their fair values. Accordingly, a loss of $184,975
was recorded in operations in 1998 which  represents  the excess of the carrying
value  over the fair  value of  $75,000.  Also  included  in  operations  is the
write-off of  capitalized  software  costs of $265,000 to reduce their  carrying
value to $0. The Company also recorded charges to cost of sales of approximately
$542,000  related to the  write-down  of unique  inventory  associated  with the
Company's products.

      The Company's strategic financial and operating plans are as follows:

Financial Plan
     1. Sell the license  rights to the Company's  technology  that is no longer
        needed.
     2. Settle the  accounts  payable  related to the  previous  operations.
     3. Provide incentive to the short-term note holders to exchange their notes
        and warrants for 5% of the Company's common stock.
     4. Negotiate the termination of operating and capital lease agreements.
     5. Maintain  the status of the  corporation  as a public  Company  through
        required SEC filings and compliance with other governmental regulations.
     6. Seek and  acquiring  entity  through the  issuance of Series A preferred
        shares that are convertible to 92% of the Company's common stock.
<PAGE>
                             Augment Systems, Inc.
                         Notes to Financial Statements
                                  (Continued)


1.    Organization, Business and Basis of Presentation: (continued)

Operating Plan

1.   Build a  business-to-business  Internet  destination  portal where small to
     medium  sized  companies  can host their web sites and direct  employees to
     procure information, productivity tools and products.

2.   Assist  businesses in developing and hosting enabled web sites. The Company
     will seek to establish  services that will  complement  the small  business
     marketplace.

3.   Acquire  businesses,  which  may  provide  related  services  to  small  to
     mid-sized  businesses such as advertising,  marketing and consulting firms,
     as well as other Internet ventures.

     In 1999,  the  Company  began  implementing  its  financial  and  operating
strategies.

1.   The Company sold the license rights to its technology for $175,000.

2.   The Company  entered an  agreement  with the  landlord  and  cancelled  the
     operating  lease  for its  offices  located  at 2 Robbins  Road,  Westford,
     Massachusetts.  No  additional  obligations  were  incurred  as a result of
     cancellation.

3.   The Company  returned to the supplier  certain  equipment that was obtained
     under capital lease  agreement.  In exchange for the cancellation of lease,
     the Company paid $6,800 in cash and transferred certain accounts receivable
     to settle an additional $6,800 payable to the supplier.

4.   The Company  entered a release  agreement  regarding  payment of any future
     royalties.

5.   Management began  negotiations  with a third party who proposed to exchange
     shares of a new start up company for 92% of the  Company  stock and develop
     its  internet  business.  Also,  a proposal was made to the note holders to
     convert their notes to 5% of the Company's common stock after the exchange.
     As of July, 2000 the Company has sucessfully received consents from all the
     noteholder to convert their notes to 5% of the Company's  common stock. The
     conversion  will not take place until the exchange of shares  transfering a
     92% interest in the Company to Right2web.com.

     The Company has incurred  substantial  losses since  inception and has been
engaged  primarily  in product  development.  The  Company has funded its losses
primarily  from a combination  of debt and equity  financings.  In addition,  at
June 30, 2000, the Company had a working capital deficiency and a stockholders'
deficit.  Also,  as a  start-up  business-to-business  e-commerce  venture,  the
Company's new business, assuming the Right2web transaction closes, is subject to
various risks including  intense  competition,  need for  substantial  funds and
qualified  personnel,   internet  security  concerns,   potential  technological
difficulties,  development of new technology, reliance on key personnel, and the
continuance of favorable market conditions for internet companies.

     These  factors  raise  substantial  doubt  about the  Company's  ability to
continue as a going concern.  The  accompanying  financial  statements have been
prepared on a going concern basis,  which contemplates the realization of assets
and the  satisfaction  of  liabilities  and  commitments in the normal course of
business.  The financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.
<PAGE>
                            Augment Systems, Inc.
                         Notes to Financial Statements
                                  (Continued)



2.    Summary of Significant Accounting Policies

      Estimates and Assumptions

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

      Cash Equivalents

     The Company  considers  all highly  liquid  investments  with a maturity of
three months or less, when purchased, to be cash equivalents. There were no cash
equivalents at June 30, 2000.

      Inventories

      The Company had no  inventories  for the fiscal  year ended  December  31,
1999.  Inventories  were recorded at $0 at December 31, 1998, which reflected in
charges to cost of sales of $542,000 for the  write-down to market.  Inventories
were stated at the lower of cost (first-in, first-out) or market.

      Property and Equipment

     Property and  equipment  were recorded at cost.  Depreciation  was computed
using the  straight-line  method over the estimated  useful lives of the related
assets ranging from three to five years.  Property held under capital leases are
amortized over the lesser of the lease term or their estimated  useful lives. In
1999,  the  Company  sold most of its  equipment  for  $65,000 and wrote off the
balance. As of June 30, 2000, the Company had no fixed assets.

      Long-Lived Assets

     The Company follows the provisions of the Statement of Financial Accounting
Standards  ("SFAS") No. 121 "Accounting for the Impairment of Long-Lived  Assets
and for Long-Lived  Assets to be Disposed of". SFAS 121  establishes  accounting
standards  for the  impairment  of  long-lived  assets and certain  identifiable
intangibles  to  be  held  and  used  and  for  long-lived  assets  and  certain
identifiable intangibles to be disposed of.

     The Company reviews the carrying values of its long-lived and  identifiable
intangible  assets  for  possible  impairment  whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of the  assets  may not be
recoverable. Due to the change in circumstances related to the operations of the
Company in fiscal 1998,  impairment charges were recorded to reduce the carrying
value of long-lived assets in December 1998.

      Revenue Recognition

     Revenue is recognized on sales to end users when product is accepted.


      Research and Development

     When  research and  development  costs are  incurred,  they are expensed as
incurred.

<PAGE>

                           Augment Systems, Inc.
                         Notes to Financial Statements
                                  (Continued)


2.    Summary of Significant Accounting Policies (continued)

      Income Taxes

     Income  taxes  are  calculated  using the  liability  method  specified  by
Statement of  Financial  Accounting  Standards  No. 109,  Accounting  for Income
Taxes.

      Financial Instruments

      The estimated  fair value of the Company's  financial  instruments,  which
include  accounts  payable,   related  party  accounts,   debt  instruments  and
convertible promissory notes, approximate their carrying value.

      Concentrations of Credit Risk and Major Customers


     The  Company  had no credit  risk  because  it had no  receivables  on June
30,2000.

      Stock Options

      The  Company  follows  the  provisions  of SFAS No.  123,  Accounting  for
Stock-Based  Compensation.  The  Company  has elected to continue to account for
stock options at their  intrinsic  value with  disclosure of the effects of fair
value  accounting on net earnings  (loss) and earnings (loss) per share on a pro
forma basis.

      Net Loss Per Share of Common Stock

     The Company  follows the  Statement of Financial  Accounting  Standards No.
128, Earnings Per Share ("SFAS No. 128"). SFAS No. 128 requires the presentation
of both basic and diluted earnings per share.

<PAGE>
                              Augment Systems, Inc.
                         Notes to Financial Statements
                                  (Continued)

3.    Accrued Expenses

      As of March 31, 2000 accrued expenses consist of the following:

<TABLE>

                                                   1999
                                                   ----
<S>                                             <C>
         Severance                               45,000
         Professional Fees                       19,342
         Interest                               210,000
                                               --------
         Total accrued expenses               $ 274,342
                                               ========
</TABLE>

     Included  in  accrued  expenses  is an  accrual  of  $45,000  related  to a
severance  agreement with a former President and Chief Executive  Officer of the
Company.  In April 2000,  note  holders were  requested to convert  their notes,
warrants and accrued  interest  into an aggregate of 5% of the common  shares of
the Company.

4.  Sale of Securities/Proposed Business

     On March 11,  2000,  the Company  entered into a Stock  Purchase  Agreement
pursuant  to which the Company  will sell to  Right2web.Com,  Inc  ("Right2web")
Company  preferred  shares for $10,000 in cash and a 7% note due in one year for
$40,000. Right2web is a start-up  business-to-business  internet venture with no
assets or liabilities.  At the closing of the  transaction  the  shareholders of
Right2web will deposit sufficient funds to close the transaction. Right2web will
receive shares of the Company's Series A Convertible  Preferred Stock subject to
various conditions of closing, including conversion of all outstanding warrants,
options and convertible notes into equity, of which all of the convertible notes
payable have agreed to convert as of this date.  Upon  exchange of the Preferred
Stock, for cash and notes,  Right2Web.Com will own 92% of the Company on a fully
diluted  basis.  After  dilution,  current  stockholders  would  hold  3% of the
Company's common stock and the convertible note holders would hold 5%.

     As of July 18, 2000, Augment has sucessfully received permission to convert
$1,500,000  in secured  convertible  debt into 5% of the  common  stock from the
noteholders ("noteholder conversion").  Right2web has indicated that it is ready
to close the Stock Purchase  Transaction.  A request of Augment shareholders was
made to execute a consent to the following actions:

        1.  The Right2web transaction

        2.  The Noteholder conversion

        3.  Election of three directors, namely Jeffrey Leventhal, Duane Mayo
            and a designee of Jeffrey Leventhal, to be named;

        4.  Ratify the appointment of Bloom and Company as new auditors
            replacing BDO Seidman;

        5.  Adopt  a  reverse   stock  split  and  increase  the   authorized
            capitalization   from  50,000,000   shares  of  common  stock  to
            150,000,000  of common  stock,  as the Board of  Directors  deems
            appropriate; and

        6.  Omnibus authority to take all actions in furtherance of the
            foregoing.


     Right2Web.Com, is owned principally by Jeffrey Leventhal, a former director
of the Company who resigned in March 1999. Mr.  Leventhal has  previously  owned
three information  technology  companies,  with his most previous venture having
been sold to a public company,  Netlojix  Communications,  Inc.  (NASDAQ:NETX).
Right2web's  business  model  is  to  build  a   business-to-business   internet
destination  portal  where small to medium  sized  companies  can host their web
sites and  direct  employees  to  procure  information,  productivity  tools and
products.  In addition,  Right2web intends to assist companies in developing and
hosting enabled web sites.  Right2web will seek to establish  services that will
complement  the small business  marketplace.  Right2web has also advised that it
intends to make strategic  acquisitions in businesses  which may provide related
services to small to mid-sized  businesses  such as  advertising,  marketing and
consulting firms, as well as other internet ventures.

     Since Right2web is a start-up  business-to-business  e-commerce venture, it
will,  among  other  things,  be subject to  intense  competition,  the need for
substantial financing,  unforeseen  technological changes, the risks inherent in
any internet  business such as security  concerns,  technological  difficulties,
development of new technology, the need to attract qualified personnel, reliance
on Jeffrey  Leventhal,  and the continuance of favorable  market  conditions for
internet companies, etc.

<PAGE>
                              Augment Systems, Inc.
                         Notes to Financial Statements
                                  (Continued)

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

         The Private  Securities  Litigation  Reform Act of 1995  contains  safe
harbor provisions regarding  forward-looking  statements.  Except for historical
information contained herein, the matters discussed in the Liquidity and Capital
Resources  section below contain potential risks and  uncertainties,  including,
without  limitation,  risks  related to the  Company's  ability to  successfully
identify  potential  merger  partners,  retain  key  employees  and  settle  any
outstanding debts. The Company will need to attract partners in order to execute
its revised  business  strategy,  and there can be no assurance that the Company
will be successful in attracting such partners.

General

     Prior to January 15, 1999, Augment Systems,  Inc.  designed,  developed and
sold fibre channel based network file server  systems  designed to increase data
transfer and file storage on computer  networks.  In September 1998, the Company
obtained $1,500,000 in bridge financing of secured convertible  promissory notes
and common stock purchase  warrants.  The Company used a portion of the proceeds
of the bridge  financing to repay in full its  indebtedness  to a major bank. In
November 1998, the Company was informed by an investment bank, that provided the
bridge  financing,  that they would be unable to secure the  additional  funding
required to repay the  outstanding  bridge  loan,  provide the Company  with the
necessary  working  capital to support the  execution of its  business  plan and
ongoing  operations.  The Company began to seek alternative  financing,  but was
unable to secure the funds necessary to maintain ongoing operations.


Plan of Operation

     In  January  1999,  the  Board of  Directors  elected  to  suspend  ongoing
operations,  layoff all but one of its employees, dispose of all assets, attempt
to settle  any  outstanding  short  and long term  debts,  seek  buyers  for its
technology, and explore merger opportunities.

Results of Operations

     During the six month periods ended June 30, 2000 the Company  recognized no
revenues. During the six month period ended June 30, 1999 the Company recognized
revenues from the sale of its licensing  rights of its  technology for $175,000.
The  Company  does not  anticipate  sales of any  products  or  service  for the
foreseeable  future  and is  concentrating  its  efforts on the  disposition  of
assets,  settlement of outstanding debts, sale of the Company's technology,  and
exploration of potential mergers.

     The Company realized a net loss of approximately $108,166 for the six month
period  ending June 30, 2000 as compared to a gain of $162,112 for the six month
period ending June 30, 1999. The recognition of income in the first half of 1999
is the result of the sale of the Company's licensing rights.

     Research and development cost for the six month periods ended June 30, 2000
and 1999 was $0. The  Company is  currently  not  conducting  any  research  and
development  activities  and  does  not  anticipate  any  such  efforts  in  the
foreseeable future.

     General  and  administrative  costs for the six months  ended June 30, 2000
were  $48,166 as  compared  to $35,500  for the six month  ended June 30,  1999.
General  and  administrative  costs for the six  months  ended of June 30,  2000
includes a refund of prior years  expenses of $19,934,  which was netted against
actual general and  administrative  expenses of $$68,100.  The Company currently
has one  non-salaried  employee.  Expenses  for  the  first  half  of 2000  were
primarily professional fees and interest expense.

     Selling and marketing costs for the six months ended June 30, 2000 and 1999
was $0.  The  Company  is  currently  not  conducting  any sales  and  marketing
activities.

     The Company currently has one full-time employee engaged in the disposition
of assets,  settlement of outstanding debts, sale of the Company's  technology,
and exploration of potential mergers.


<PAGE>
                              Augment Systems, Inc.
                         Notes to Financial Statements
                                  (Continued)

ITEM 6.  Management's Discussion and Analysis or Plan of Operation (continued)

     In September 1998, the Company  obtained  $1,500,000 in bridge financing of
secured  convertible  promissory  notes and common stock purchase  warrants from
certain investors (the  "Convertible Note holders").  The Company used a portion
of the proceeds of the bridge  financing to repay, in full, its  indebtedness to
Fleet National Bank. The convertible  promissory notes were due and payable upon
the  earlier of the  closing of a  financing  of a minimum of  $4,000,000  or in
September  1999. In November  1998,  the Company was informed by the  investment
bank,  that provided the bridge  financing,  that they would be unable to secure
the additional funding required to repay the outstanding bridge loan and provide
the Company with the necessary  working capital to support its business plan and
ongoing  operations.  The Company began to seek alternative  financing,  but was
unable  to  secure  the funds  necessary.  On  January  15,  1999,  the Board of
Directors decided to shut down operations, lay-off all but one of its employees,
liquidate assets,  seek buyers for the Company's  technology and look for merger
partners.  On April 7, 2000,  the Company  requested that the  Convertible  Note
holders  convert  their  interest into the aggregate of five percent (5%) of the
equity of the Company after  completion of the Right2web  transaction.  To date,
all convertible  note holders have agreed to convert their rights into equity in
the Company as previously described.

     These  factors  raise  substantial  doubt  about the  Company's  ability to
continue as a going  concern.  The Company is dependent on its ability to settle
all debts with  creditors,  attract  purchasers of the Company's  technology and
attract potential merger partners,  which will undoubtedly result in substantial
dilution to existing  shareholders.  Although the Company has effectively ceased
operations,  there  are  numerous  secured  and  unsecured  creditors  who could
commence litigation against the Company - see Item 3 - Legal Proceedings. In the
event that the Company has insufficient funds to settle or defend these matters,
the Company or its creditors could cause the filing of a bankruptcy  proceeding.
See  Item  1 -  Business  -  Potential  for  Bankruptcy  - Need  for  Additional
Financing.

     The Company is authorized  to issue up to  50,000,000  shares of its Common
Stock and up to 2,000,000 shares of Preferred Stock. As of August 9, 2000, there
were 15,778,406  shares of the Company's Common Stock issued and outstanding and
no Preferred Stock issued and outstanding.  The Company has issued an additional
600,000 shares of common stock to Monarch  Financial  Corp. in exchange for cash
in the amount of $60,000.

     The Company has issued an  additional  3,279,455  shares of Common Stock to
certain  investors  who  participated  in a private  placement of the  Company's
Common Stock during  January 1998 and May 1998.  The shares had been  authorized
for issuance by the Board of Directors during 1998. In addition, the Company has
7,413,111 Common Stock Purchase  Warrants issued and  outstanding,  of which all
7,413,111 have exercise  prices  substantially  above the existing market price.
Pursuant to the Right2web  transaction,  the Company will issue  Preferred Stock
after a reverse split of the  Company's  Common Stock such that  Right2web  will
own, through its convertible  preferred  shares,  92% of the Common Stock of the
Company on a fully diluted basis.

Capital Expenditures

         The  Company  does  not  have  any  material  commitments  for  capital
expenditures at this time.

Effects of Inflation

         The Company  believes  that the  relatively  moderate rate of inflation
over the past few years has not had a significant  impact on the Company's sales
or operating results.

Income Taxes

     The Company adopted Statement No. 109 "Accounting for Income Taxes" in 1993
and its implementation has had no effect on the Company's financial position and
results of operation.



<PAGE>
PART II. OTHER INFORMATION

ITEM 1.                LEGAL PROCEEDINGS
                       ------------------
                       None

ITEM 2.                CHANGES IN SECURITIES
                       ---------------------
                       None

ITEM 3.                DEFAULTS UPON SENIOR SECURITIES
                       -------------------------------
                       In September 1999, the Company defaulted on its
                       convertible notes.  In April 2000,  the note holders
                       were requested to convert their notes to equity.  All
                       of the noteholders have agreed to convert.

ITEM 4.                SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                       ---------------------------------------------------
                       None

ITEM 5.                OTHER INFORMATION
                       -----------------
                       None

ITEM 6.                EXHIBITS AND REPORTS ON FORM 8-K
                       ---------------------------------
                       The  Company filed form 8-K on April 10, 2000 for a
                       change of accountants and the Company has entered into a
                       Stock Purchase Agreement with Right2web.com.



<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned thereunto duly authorized.

                                  AUGMENT SYSTEMS, INC.
DATE:
August 9, 2000                    By:/s/Duane A. Mayo
-------------                    --------------------

                                  Duane A. Mayo
                                  Chief Financial Officer
                                  Treasurer and Director
                                 (Principal Financial and Accounting Officer)