SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934,  FOR THE QUARTER ENDED March 31, 2005

                        COMMISSION FILE NUMBER 000-28485

                                POP3 MEDIA CORP.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

         Nevada                                                  88-0380343
--------------------------------------------------------------------------------
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

   2451 W. BIRCHWOOD AVENUE, SUITE 105, MESA, ARIZONA                 85202
   ---------------------------------------------------------------------------
        (Address of Principal Executive Offices)                   (Zip Code)

                                 (480) 894-0311
              ---------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

           Securities registered pursuant to Section 12(g) of the Act:

   Title of each class                 Name of each exchange on which registered
--------------------------------------------------------------------------------
 Common Stock, $.001 par                   Over the counter - Bulletin Board
     value per share


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

Check  whether the  Registrant:  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the Securities 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[ ]

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of March 31, 2005: Common stock, $0.001 par value - 73,211,223

Transitional Small Business Disclosure Format Yes |X| No | |


                                       1
<PAGE>





                                TABLE OF CONTENTS
                         PART I - FINANCIAL INFORMATION

Item                                                                       Page

1. Financial Statements ..................................................... 3

    Report of Independent Registered Public Accounting Firm ................. 3

    Condensed Consolidated Balance Sheets for March 31, 2005 and
        June 30, 2004 ................................................... 4 - 5

    Condensed  Consolidated  Statements  of  Operations for Three Months
        Ended March 31, 2005 and March 31, 2004 ............................. 6

    Condensed  Consolidated  Statements of Operations for Nine Months
        Ended March 31, 2005 and March 31, 2004 ............................. 7

    Condensed  Consolidated  Statements of Cash Flows for Nine Months
        Ended March 31, 2005 and March 31, 2004 ............................. 8

    Notes to Condensed Consolidated Financial Statements .................... 9

2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations ...................................................... 19

3. Controls and Procedures ................................................. 26

4. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure ............................................... 26

                          PART II - OTHER INFORMATION

1. Legal Proceedings ....................................................... 28

2. Changes in Securities ................................................... 28

3. Defaults Upon Senior Securities ......................................... 29

4. Submission of Matters to a Vote of Security Holders ..................... 29

5. Other Information ....................................................... 29

6. Exhibits, List, and Reports on Form 8-K ................................. 29

SIGNATURES ................................................................. 30


                                       2
<PAGE>


Item 1. Financial Statements

Report of Independent Registered Public Accounting Firm



To the Board of Directors and Audit Committee POP3 MEDIA CORP

We have reviewed the  accompanying  consolidated  interim balance sheets of PoP3
Media  Corp,  as of  March  31,  2005,  and June  30,  2004  and the  associated
consolidated  statements of operations,  stockholders' equity and cash flows for
the three months and nine months ended March 31, 2005 and March 31, 2004.  These
interim financial statements are the responsibility of the Company's management.

We conducted our review in accordance  with the standards of the Public  Company
Accounting  Oversight  Board  (United  States).  A review of  interim  financial
information  consists  principally of applying analytical  procedures and making
inquiries of persons  responsible  for financial and accounting  matters.  It is
substantially  less in scope  than an audit  conducted  in  accordance  with the
standards of the Public Company  Accounting  Oversight  Board,  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  interim  financial  statements  for  them to be in
conformity with U.S. generally accepted accounting principles.


Shelley International, CPA

Mesa, Arizona, U.S.A.

May 20, 2005


                                       3
<PAGE>


                                 POP3 MEDIA CORP
                          CONSOLIDATION BALANCE SHEETS
                                   (Unaudited)
                        March 31, 2005 and June 30, 2004

                                     ASSETS
                                    --------
                                                      March 31,
                                                        2005         June 30,
                                                    (Unaudited)        2004
                                                    -----------   -----------
CURRENT ASSETS
     Cash                                           $    31,253   $   116,628
     Accounts Receivable - Net                          762,774       635,795
     Prepaid Expense                                     48,603

     Other Receivables                                     --          18,108
     Inventory                                          822,288     1,032,142
                                                    -----------   -----------

     Total Current Assets                             1,664,918     1,802,673
                                                    -----------   -----------

LONG TERM ASSETS

     Capitalized Software, Net                          870,750       870,750
     Property and Equipment, Net                      4,711,270     4,892,396
     Goodwill and other intangible Assets, Net        7,679,842     7,936,431
     Investments                                         13,736        13,736
     Business Development                                50,000
     Deferred Income Tax Benefit                        279,430       279,430
     Artist Advances                                    345,842       114,647
     Other Assets                                        52,445        13,420
     Notes Receivable                                    92,013        92,013

                                                    -----------   -----------
     Total Long Term Assets                          14,095,328    14,212,823
                                                    -----------   -----------

TOTAL ASSETS                                        $15,760,246   $16,015,496
                                                    ===========   ===========


The accompanying notes are an integral part of these statements



                                       4
<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                     -------------------------------------
                                                                  March 31,
                                                    2005           June 30,
                                                (Unaudited)         2004
                                               ------------    ------------
LIABILITIES
Current Liabilities
     Accounts Payable and Accrued Expenses     $  1,501,331    $  1,146,291
     Related Party Liabilities and Advances         (20,412)         19,716
     Debenture Payable                              500,000            --
     Notes Payable - Current Portion                 77,322            --
     Other Current Liabilities                       22,958            --
     Credit Line - Financial Institution            321,271         214,500
                                               ------------    ------------

     Total Current Liabilities                    2,402,470       1,380,507

Non-Current Liabilities
     Notes Payable - Non-current Portion            210,979            --
     Original Issue Discount                       (126,000)
                                               ------------    ------------
     Other liabilities                                4,763         322,352
                                               ------------    ------------

     Total Non-Current Liabilities                   89,742         322,352
                                               ------------    ------------

TOTAL LIABILITIES                                 2,492,212       1,702,859
                                               ------------    ------------

STOCKHOLDERS' EQUITY

     Preferred Stock authorized
     10,000,000 shares, $0.01 par value
     Issued and outstanding March 31, 2004:
     1,854,100 shares of Class A Convertible
     and 1,854,100 at June 30, 2004                  18,541          18,541

     Common Stock, authorized
     490,000,000 shares, $0.001 par value;
     Issued and outstanding March 31, 2004;
     73,211,233 shares and June 30, 2004
     52,451,642 shares                               73,212          52,453

     Stock Subscriptions Receivable                 (20,000)

     Paid in Capital                             20,264,934      19,892,278

     Retained Earnings/(Deficit)                 (7,068,653)     (5,650,635)
                                               ------------    ------------

     Total Stockholders' Equity/(Deficit)        13,268,034      14,312,637
                                               ------------    ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                           $ 15,760,246    $ 16,015,496
                                               ============    ============

The accompanying notes are an integral part of these statements

                                       5
<PAGE>



                                 POP3 MEDIA CORP
                     CONSOLIDATION STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                       Three Months Ended
                                                               ------------------------------
                                                              March 31, 2005   March 31, 2004
                                                               -------------   --------------
<S>                                                                    <C>            <C>
INCOME

      Revenues                                                 $     498,047   $     913,463
      Other Income                                                    69,466
                                                               -------------   -------------

      Gross Income                                                   567,513         913,463

COST OF GOODS SOLD                                                   371,358         427,927
                                                               -------------   -------------

      Gross Profit / (Loss)                                          196,155         485,536
                                                               -------------   -------------

EXPENSES
      Compensation                                                   268,372         319,143
      Professional and Consulting Fees                               110,397         391,098
      General and Administrative                                     462,609         331,988
      Depreciation                                                    45,571         449,773
      Write off of screenplay
      Loss on sale of majority interest in subsidiary
      Write-Down Obsolete Inventory
      Interest Expense                                                49,765          15,992
                                                               -------------   -------------

      Total Expense                                                  936,714       1,507,994
                                                               -------------   -------------

(LOSS) BEFORE INCOME TAXES                                          (740,559)     (1,022,458)

      Provision for Income Taxes                                         450           1,000
                                                               -------------   -------------

NET (LOSS)                                                     $    (741,009)  $  (1,023,458)
                                                               =============   =============

NET (LOSS) PER COMMON SHARE
      Basic                                                    $       (0.01)  $       (0.02)
      Diluted                                                  $       (0.01)  $       (0.02)

Weighted average number of Shares
      Basic                                                       67,696,361      41,984,626
      Diluted                                                    100,598,209      41,984,626
</TABLE>


The accompanying notes are an integral part of these statements

                                       6
<PAGE>


                                 POP3 MEDIA CORP
                     CONSOLIDATION STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                              Nine Months Ended
                                                       -------------------------------
                                                       March 31, 2005   March 31, 2004
                                                       --------------   --------------
<S>                                                           <C>              <C>
INCOME

      Revenues                                          $   2,007,708    $   2,525,467
      Other Income                                            189,308
                                                        -------------    -------------

      Gross Income                                          2,197,016        2,525,467

COST OF GOODS SOLD                                          1,074,204        1,188,086
                                                        -------------    -------------

      Gross Profit / (Loss)                                 1,122,812        1,337,381
                                                        -------------    -------------

EXPENSES

      Compensation                                            839,914          851,047
      Professional and Consulting Fees                        255,546        1,369,338
      General and Administrative                            1,010,663          884,302
      Depreciation                                            136,713        1,428,010
      Write off of screenplay                                                  100,000
      Loss on sale of majority interest in subsidiary                          240,000
      Write-Down Obsolete Inventory                           209,854
      Interest Expense                                         86,790           55,529
                                                        -------------    -------------

      Total Expense                                         2,539,480        4,928,226
                                                        -------------    -------------

(LOSS) BEFORE INCOME TAXES                                 (1,416,668)      (3,590,845)


      Provision for Income Taxes                                1,350            5,000
                                                        -------------    -------------

NET (LOSS)                                              $  (1,418,018)   $  (3,595,845)
                                                        =============    =============

NET (LOSS) PER COMMON SHARE
      Basic                                             $       (0.03)   $       (0.12)
      Diluted                                           $       (0.02)   $       (0.12)

Weighted average number of Shares
      Basic                                                67,696,361       29,796,804
      Diluted                                             100,598,209       29,796,804
</TABLE>

The accompanying notes are an integral part of these statements

                                       7
<PAGE>


                                 POP3 MEDIA CORP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                       Nine Months       Nine Months
                                                           Ended             Ended
                                                      March 31, 2005     March 31, 2004
                                                     ---------------    ---------------
<S>                                                          <C>                <C>
Operating Activities

       Net (Loss)                                    $    (1,418,018)   $    (3,595,845)

       Significant Non-Cash Transactions
            Loss on Sale of non-affiliate                                       240,000
            Write off of screenplay rights                                      100,000
            Common Stock for Services                        343,415          1,127,000
            Original Issue Discount                          126,000
            Bad Debt Expense                                    --               39,582
            Business Development                             (50,000)
            Write off of intangibiles                        256,589
            Depreciation Expense                             136,713          2,284,494
       Changes in assets and liabilities
            Receivables                                     (128,871)          (136,258)
            Other Assets                                     (39,025)            (6,388)
            Decrease in Inventory                            209,854            (14,864)
            Due from related parties                                            (64,517)
            Decrease in Other Liabilities                   (317,589)
            Decrease/(Increase) in  Prepaid
                  Expense                                    (48,603)
            Due Officers and Directors                       (40,128)           (22,646)
            Decrease/(Increase) in Accounts
                  Payable                                    377,998             56,283
                                                     ---------------    ---------------

Net Cash (Used) by Operating Activities                     (843,665)             6,841
                                                     ---------------    ---------------
Investing Activities
            Artist Agreement Costs                          (231,195)            (6,187)
            Purchase of Equipment                             44,413            (26,668)
                                                     ---------------    ---------------

Net Cash (Used) by Investing Activities                     (186,782)           (32,855)
                                                     ---------------    ---------------
Financing Activities
       Proceeds from Related Parties                         100,000
       Payments on line of credit and debt                   606,771           (120,252)
       Proceeds from loans                                   288,301
       Proceeds from sale of Common Stock                     50,000            200,000
                                                     ---------------    ---------------

Cash Provided by Financing Activities                        945,072            179,748
                                                     ---------------    ---------------

Net Increase/(Decrease) in Cash                              (85,375)           153,734

Cash, Beginning of Period                                    116,628               --
                                                     ---------------    ---------------

Cash, End of Period                                  $        31,253    $       153,734
                                                     ===============    ===============
Significant Non-Cash Transactions
       See Note pertaining to Stockholders' Equity

Supplemental Information:
       Period Interest                               $        64,918    $        19,456
       Income Taxes Paid                                       1,350              5,000

</TABLE>

The accompanying notes are an integral part of these statements

                                       8
<PAGE>

                        PoP3 Media Corp and Subsidiaries

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        March 31, 2005 and June 30, 2004


Note 1. OVERVIEW OF OPERATIONS AND ACCOUNTING POLICIES

Nature of Business
------------------

PoP3 Media Corp (the "Company" or "PoP3") was organized  January 6, 1993,  under
the laws of the State of Nevada,  as Lotus  Enterprises,  Inc. On April 6, 1999,
the State of Nevada  approved an increase of  authorized  capital to  50,000,000
common shares and changed its name to ClubCharlie.com,  Inc. On January 22, 2001
the  Company  changed  its name to ViaStar  Holdings,  Inc. On July 18, 2003 the
Company entered into a stock purchase  agreement with Level X Media  Corporation
("Level X")  wherein the Company  issued  10,650,000  restricted  common  shares
valued at $1.00 per share (prior historical market price) to purchase all of the
assets,  liabilities and outstanding  shares of Level X. On January 5, 2004, the
minority  shareholders  brought in by the Level X  purchase,  requested  Company
management  and the  majority  shareholders  to  reconsider  its July  18,  2003
purchase  agreement of Level X. This action was  precipitated  by the  Company's
inability to maintain its $1.00 market price per share. The resultant  amendment
dated January 5, 2004 authorized the company to maintain the same purchase price
of  $10,650,000  but reduce the value of shares  issued  from $1.00 to $0.20 per
share.  Therefore,  in January 2004 the company issued  additional shares to the
appropriate shareholders bring the total shares issued for the purchase of Level
X to 1,904,100 preferred shares (convertible to 38,082,000 common shares) valued
at $3,809,918  and  15,164,671  common shares valued at  $6,840,082,  a total of
$10,650,000.  The revised agreement resulted in a change of majority control. On
January 23, 2004, the State of Nevada approved an increase of authorized capital
(100,000,000  common and  10,000,000  preferred) and changed its name to ViaStar
Media Corporation. On March 31, 2004, the Company acquired all of the issued and
outstanding  capital  of  MasterDisk  Corporation  ("MasterDisk"),  a  New  York
corporation,  which became a wholly owned subsidiary of the Company. On December
29,  2004,  the  Company  changed  its name to PoP3  Media Corp and the State of
Nevada  approved an increase of  authorized  capital to  490,000,000  common and
10,000,000 preferred shares.

Basis of presentation
---------------------

The  financial  statements  included  in this  report  reflect  all  normal  and
recurring  adjustments which, in the opinion of management,  are necessary for a
fair presentation of the Company's  consolidated financial position at March 41,
2005 and June 30, 2004,  and the  consolidated  results of  operations  and cash
flows for the,  nine months ended March 31, 2005 and 2004.  The Company  changed
its fiscal year end to June 30 on August 6, 2003 and  completed  a short  period
audit for the six months ended June 30, 2003 on October 17, 2003.

Principles of consolidation
---------------------------

The  accompanying  condensed  consolidated  financial  statements of the Company
include the  assets,  liabilities,  revenues  and  expenses of its wholly  owned
subsidiary.   The  consolidated  financial  statements  have  been  prepared  in
accordance with accounting principles generally accepted in the United States of
America.

                                       9
<PAGE>

Note 1. OVERVIEW OF OPERATIONS AND ACCOUNTING POLICIES - continued

Cash and Cash Equivalents
-------------------------

For  financial  statement  presentation  purposes,  the  Company  considers  all
short-term  investments  with a maturity date of three months or less to be cash
equivalents.

Revenue recognition
-------------------

Revenue for music is generated  when the product is scanned at the point of sale
("POS").  The  period of time from  initial  order to  shipment  of the  product
typically  ranges from thirty to forty five days.  Revenue for  replication  and
authoring  is  generated  when the  mastering  process  begins at the  mastering
facilities.   Replication   and   authoring   revenues  are   recognized   on  a
project-by-project basis.

Merchandise Inventory
---------------------

Inventories  are stated at the lower of cost  (first-in,  first-out)  or market.
Inventory costs include any material,  labor and manufacturing overhead incurred
by the Company.

Property and Equipment
----------------------

Property  and  equipment  is  stated  at  cost,   and   depreciated   using  the
straight-line  method over the estimated useful lives of the assets, which range
from three to five years.  Assets under capital  leases are  depreciated  by the
straight-line  method over the shorter of the lease term or the useful  lives of
the  assets.  The  Company's  policy  is to  evaluate  the  remaining  lives and
recoverability  in  light  of  current  conditions.  It is at  least  reasonably
possible that the Company's estimates of lives and recoverability will change.

Intangible assets and goodwill
------------------------------

In January 2002, the Company  adopted  Statement of Financial  Standards No. 142
("SFAS 142"),  which requires the discontinuance of amortization of goodwill and
certain  intangible  assets with indefinite useful lives. SFAS 142 requires that
goodwill and intangible assets deemed to have an indefinite life be reviewed for
impairment  upon the adoption of SFAS 142 and annually  thereafter.  The Company
performed its initial impairment review upon adoption and will perform an annual
impairment review.  Other intangibles with finite lives are amortized over their
estimated useful lives.

Accrued expenses
----------------

The Company  routinely  accrues for various  costs and expenses for which it has
received goods or services,  but for which it has not been invoiced.  Typically,
accrued expenses include such items as salaries,  employee benefits,  litigation
costs,  and taxes for which  amounts are readily  determinable  and  significant
estimates are not  necessary.  Various  other  expenses are accrued from time to
time based on the estimated costs of those goods or services performed.

                                       10
<PAGE>

Note 1. OVERVIEW OF OPERATIONS AND ACCOUNTING POLICIES - continued

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (GAAP) requires management to
make  estimates  and  assumptions  that  affect  the  reported  amounts  and the
disclosure of contingent amounts in the Company's  financial  statements and the
accompanying notes. Actual results could differ from those estimates.

Loss Per Share
--------------

The basic (loss) per share is  calculated  by dividing the  Company's net income
available to common shareholders by the weighted average number of common shares
during the year.

On March 31, 2005 the Company has potentially dilutive securities outstanding in
the form of 1,854,100  shares of preferred  stock that can each be exchanged for
20 shares of common stock.  These shares are not considered in the  presentation
of loss per share as their inclusion would be anti-dilutive.

Income Taxes
------------

The Company  provides for income taxes under  Statement of Financial  Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and  liability  approach in accounting  for income taxes.  Deferred tax
assets  and  liabilities  are  recorded  based on the  differences  between  the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.

Segment reporting
-----------------

Management  reviews the operating results of the Company's  subsidiaries for the
purpose of making operating  decisions and assessing  performance.  Based on the
aggregation criteria in Statement of Financial Accounting Standards No. 131, the
Company has  aggregated the results of all its operating  subsidiaries  into one
reportable segment.

Stock Based Compensation
------------------------

The Company accounts for its stock based  compensation  based upon provisions in
SFAS No. 123, Accounting for Stock-Based Compensation.


Note 2. GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
company  will  continue  as a going  concern.  The  Company  has  accumulated  a
$7,068,653  loss  since  inception.  This  raises  substantial  doubt  about the
Company's  ability to  continue as a going  concern.  The  Company's  ability to
continue  as a going  concern  is  dependent  upon  its  success  in  developing
additional capital.

                                       11
<PAGE>

Note 2. GOING CONCERN - continued

Management  believes  that the above  problems  are being  resolved and plans to
address its going-concern issue through the following:

     Expanding or increasing its  distribution of products and services  through
     its subsidiaries

     Expanding market presence through selective  acquisitions or the merger of,
     with established media and entertainment companies;

     Raising capital through the sale of debt and/or equity securities; and,

     Settling outstanding debts and accounts payable, when possible, through the
     reorganization or re-capitalization of obligations with either longer terms
     or the issuance of debt and/or equity securities

There can be no assurance  that the Company will be successful in its efforts to
increase  sales of its  products  or services  and to issue debt  and/or  equity
securities for cash or as payment for outstanding  obligations.  Capital-raising
efforts may be  influenced  by factors  outside of the  control of the  Company,
including,  but not limited to,  capital market  conditions.  The ability of the
Company  to  continue  as a going  concern  is  dependent  upon its  success  in
obtaining  additional sources of capital, and attaining sufficient growth in its
customer  base and services to enable it to achieve  future  profitability.  The
accompanying  financial  statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going concern.


Note 3. TRADE NAME AND DISTRIBUTION RIGHTS

During July 2001, the Financial  Accounting  Standards Board issued SFAS No.142,
"Goodwill and Other Intangible  Assets." SFAS 142 was effective  January 1, 2002
and required that goodwill and certain  intangible  assets remain on the balance
sheet and may not be amortizable for financial reporting purposes.  On an annual
basis,  or when there is reason to suspect that goodwill and certain  intangible
asset values have been  diminished or impaired,  these assets must be tested for
impairment,  and write-downs may be necessary. The Company does not believe that
any impairment of goodwill or other intangibles is necessary at this time.


Intangible assets at March 31, 2005:
                                                 March 31, 2005   June 30, 2004
                                                 --------------   -------------
      Trade Name Purchased (MasterDisk)             $   546,681     $   546,681
      Distribution Agreement                          7,133,161       7,389,750
                                                 --------------   -------------
      Total Goodwill and Other Intangible Assets     $7,679,842      $7,936,431
                                                 ==============   =============

Note 4. INVENTORY

Company inventory at March 31, 2004 is $822,288 and $1,032,142 at June 30, 2004.
The change in inventory  includes cost of goods sold plus a $209,854  write-down
for  obsolete  inventory.  Inventory  costs  include  any  material,  labor  and
manufacturing  overhead  incurred by the Company in the production of inventory.
Inventory is primarily  music  compact discs and videos  purchased  from outside
manufacturers  then shipped to the retailer for sale.  Inventories are stated at
the lower of cost (first-in,  first-out) or market. The Company may from time to
time take into inventory consigned product for sale.

                                       12
<PAGE>

Note 5. CAPITALIZED SOFTWARE DEVELOPMENT COSTS

The  Company  capitalizes  internally  developed  software  costs  that  will be
amortized using the  straight-line  method over the estimated useful life of the
software,  not to exceed five years.  Capitalized  costs include external direct
costs of materials and services consumed in developing internal use software and
payroll  related  costs  for  employees  who are  directly  associated  with the
internal software development  project.  Capitalization of such costs will cease
no later than the point at which the project is substantially complete and ready
for its intended purpose.  Capitalized  software  development costs at March 31,
2005 and June 30, 2004 is $870,750.

Note 6. PROPERTY AND EQUIPMENT

Property  and  equipment at March 31, 2004 and June 30, 2004 are  summarized  as
follows:

                                                 March 31, 2004   June 30, 2004
                                                 --------------   -------------
      Furniture and Fixtures                        $   932,348     $   932,348
      Studio Facilities                               4,695,377       4,695,377
      Accumulated Depreciation                         (916,455)       (735,691)
                                                 --------------   -------------
      Property and Equipment, Net                    $4,711,270      $4,892,396
                                                 ==============   =============

Note 7. DEBENTURES AND NOTES PAYABLE

On December 22, 2004 the Company  entered into an agreement with Cornell Capital
Partners,   LP  to  obtain  $500,000  bridge  financing  through  the  issue  of
convertible debentures and equity financing up to $5,000,000 through the sale of
common stock to Cornell.  The debentures  carry a 7% per year interest rate with
the  entire  principle  and  interest  due August  30,  2005.  The Holder of the
debenture can convert the principle and interest into the Company's common stock
at an amount equal to 120% of the closing bid price of the common  shares on the
date of conversion.

The Company also has the right to redeem the principle and accumulated  interest
of any  outstanding  debentures  into  Common  Stock  at a price  of 120% of the
closing bid price.  Should the company exercise its right to redeem,  the holder
is entitled to receive a  three-year  warrant to purchase  50,000  shares of the
Company's common stock for every $100,000 principle and interest  redeemed.  The
warrant can be exercised on a "cash basis" with an exercise price of 120% of the
closing bid price on the date the debenture is redeemed.

The Company issued  4,486,940  common shares,  valued at $150,000 to obtain this
equity financing.


Note 8. STOCKHOLDERS' EQUITY

PoP3 Media Corp (the "Company" or "PoP3") was organized  January 6, 1993,  under
the laws of the State of Nevada,  as Lotus  Enterprises,  Inc. On April 6, 1999,
the State of Nevada  approved an increase of  authorized  capital to  50,000,000
common shares and changed its name to ClubCharlie.com,  Inc. On January 22, 2001
the  Company  changed  its name to ViaStar  Holdings,  Inc. On July 18, 2003 the
Company  entered into an agreement and plan of merger to purchase  Level X Media
Corporation  ("Level  X").  As a result  of a  bonified  dispute  and  resulting
settlement  a with the  former  shareholders  of Level X, on January 5, 2004 the
company  amended its purchase  agreement  with Level X and  increased the shares


                                       13
<PAGE>

Note 8. STOCKHOLDERS' EQUITY - continued

issued whereby a change of control  occurred.  On January 23, 2004, the State of
Nevada  approved an  increase  of  authorized  capital  (100,000,000  common and
10,000,000  preferred)  and changed  its name to PoP3 Media  Corp.  On March 31,
2004,  the  Company  acquired  all of the  issued  and  outstanding  capital  of
MasterDisk Corporation  ("MasterDisk"),  a New York corporation,  which became a
wholly  owned  subsidiary  of the Company.  On December  29,  2004,  the Company
changed its name to PoP3 Media Corp and the State of Nevada approved an increase
of authorized capital to 490,000,000 common and 10,000,000 preferred shares

The  Company,  on January 5, 2004 through a vote of the  shareholders  holding a
majority of control  approved an increase in the number of authorized  shares of
common stock, $0.001 par value to 100,000,000 and the creation of a new class of
equity,  authorizing  10,000,000  shares of  preferred  stock,  $0.01 par value.
Furthermore through the vote of the shareholders holding a majority control, the
Company   approved  the  issuance  of  Series  A  Convertible   Preferred  Stock
designation used in the completion of the amended merger with Level X.

On December  5, 2004,  the Company  through a majority  vote of its  controlling
shareholders  approved an increase in the number of authorized  shares of common
stock, $0.001 par value to 490,000,000 shares.

As of June 30,  2004 the company has issued and  outstanding  52,451,642  Common
Shares and 1,854,100 Series A convertible preferred shares.

Afterward,  the  Company  issued  1,000,000  common  shares  for  $50,000  cash;
2,900,000  for  payment of $60,250  debt and  accumulated  interest;  11,872,651
common shares for services valued at $343,415 and 4,986,940 common shares valued
at $177,000 to obtain equity financing.

Preferred Stock
---------------

The Company has 10,000,000 authorized shares of Preferred Stock with a par value
of $0.01 per share and has issued 1,904,100 Series A Convertible Preferred Stock
valued at $3,794,753  of which 50,000  shares have been  converted for 1,000,000
common  shares.  Each share of Series A  Preferred  Stock is  convertible  to 20
shares of common stock and carries voting rights of 100:1.

Investment in and Sale of Majority Interest
-------------------------------------------

On April 23, 2003 the Company  entered  into a  transaction  to purchase  Moving
Pictures  International  Ltd,  ("MPI") an  entertainment  magazine.  The Company
issued 3,500,000 shares of common stock, par value $0.001 in connection with the
purchase of MPI. The purchase of MPI was an elaborate  brokered  transaction  by
the  recipient of the shares.  The brokered  purchase of MPI was  accounted  for
under the purchase method of accounting. Total investment required in MPI by the
Company included the assumption of (undisclosed at the time of sale) substantial
liabilities  and the  payment of shares of the  Company's  common  stock,  which
approximated  $1,200,000.  The  purchase  of MPI was to be  solely  through  the
issuance  of shares of the  Company's  common  stock.  The  Company  through the
actions of a member of prior management and a related party of the seller became
obligated for payments on behalf of MPI. The  obligations  were never audited or
verified  for purposes of the Company and its  shareholders  as required by law.
The transaction was denominated in the English pounds ((pound))  converted to US
dollars ($) for financial  statement purposes.  No foreign currency  translation
adjustment was necessary.

                                       14
<PAGE>

Note 8. STOCKHOLDERS' EQUITY - continued

On September 26, 2003 The Company sold the controlling interest in MPI of 80% to
Rhiannon   Holdings,   Inc.   ("RH")(see   "Encumbrances   and   Related   Party
Transactions")  The  purchase  price was as follows,  the RH would return to the
Company, seven million (7,000,000) shares of common stock received as collateral
for the advances/note  payable between RH and the Company, the assumption of all
liabilities  associated with MPI, the assumption of the $700,000 note payable to
BFT and the  issuance of two million  (2,000,000)  shares of common stock with a
stated value of $340,000.  The Company recognized a loss of $240,000 on the sale
of the 80% interest in MPI. The Company is no longer liable for any MPI debt.

Merger
------

On July 18, 2003 the company entered into a stock purchase  agreement with Level
X Media Corporation wherein the company obtained all of the assets,  liabilities
and  outstanding  shares of stock of Level X in exchange for a purchase price of
$10,650,000.  The original  agreement  was for the exchange of PoP3 common stock
valued at $1.00 per share.  However,  the stock was actually trading at the time
between $0.20 and $0.26 per share.  For these reasons,  in order to resolve this
bonified  dispute  with the  former  shareholders  of  Level  X,  the  following
settlement  and amendment to the original  merger  agreement was entered into on
January 5, 2004.  The  agreement  was  revised as follows:  1,904,100  shares of
preferred stock valued at $3,809,918 (convertible to 38,082,000 shares of common
stock) and  15,164,671  common shares  valued at $6,840,082  were issued for the
total purchase price of $10,650,000

Acquisitions through Issue of Stock
-----------------------------------

On March 31, 2004, the Company issued  10,000,000  shares of its common stock to
the shareholders of MasterDisk in exchange for all of the issued and outstanding
shares of MasterDisk.  As a result of the share  exchange,  MasterDisk  became a
wholly owned subsidiary of the Company.

MasterDisk  headquartered  in New York City, is one of the leading audio,  video
and multimedia  mastering  facilities in the U.S. The Company through its wholly
owned subsidiary provides state of the art authoring for digital videodisks, and
multi-channel  5.1  mastering.  For over thirty  years  MasterDisk  has provided
quality media mastering through personal service, expertise and creativity.

The Company  recognized  purchase of MasterDisk trade name of $546,681 (see Note
3- Goodwill and Other  Intangible  Assets) related to the excess of the purchase
price over the net assets.  The acquisition was accounted for under the purchase
method of accounting.  Results of operation  since the date of acquisition  have
been included in the consolidated financial statements.

Stock Incentive Plan
--------------------

The  Company  adopted a Stock  Incentive  Plan which was  revised in its January
2004, S-8 Registration Statement. Under the plan, the Company can issue stock to
consultants, employees, directors and company officers in exchange for services.


                                       15
<PAGE>

Note 9. INCOME TAXES:

SFAS No. 109  requires  the  reduction  of  deferred  tax assets by a  valuation
allowance if, based on the weight of available evidence,  it is more likely than
not that some or all of the  deferred  tax assets will not be  realized.  In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is  $1,242,389,  which is  calculated  by  multiplying  a 22%
estimated tax rate by the  cumulative  NOL of  $5,647,225.  The total  valuation
allowance is a comparable $1,242,389. Details for the last two years follow

                                                        6/30/04         6/30/03
                                                 --------------   -------------
      Deferred Tax Asset                             $1,242,389        $365,310
      Valuation Allowance                            (1,242,389)       (365,310)
      Current Taxes Payable                                0.00            0.00
                                                 --------------   -------------
      Income Tax Expense                         $         0.00   $        0.00
                                                 ==============   =============


Below is a chart showing the estimated  corporate  federal net operating  losses
(NOL) and the years in which they expire.

         Year                              Amount      Expiration
         ----                      --------------   -------------
         1999                         $   207,036            2019
         2000                             432,268            2020
         2001                             298,721            2021
         2002                             532,354            2022
         2003                             190,122            2023
         2004                           3,986,724            2024
                                   --------------
         Total NOL                     $5,647,225
                                   ==============



Note 10. CONTINGENCIES

On October 25, 2004, former Chief Financial  Officer/Director Kenneth J. Yonika,
and former General  Counsel/Executive Vice President/Director  Richard L. Brooks
of Pop3 Media Corp ("Pop3"),  ("Complainants") filed with the U.S. Department of
Labor Occupational Safety & Health Administration  ("OSHA") a complaint alleging
discriminatory  employment  practices in violation of the  Sarbanes-Oxley Act of
2002.  Pop3  fervently  asserts that these claims are false and will  vigorously
defend  itself  until the  matter has  reached a just  conclusion.  Pop3  firmly
believes  that the  Complainants'  allegations  amount to  nothing  more than an
attempt to extort  additional  value  from the  shareholders  of Pop3.  If final
adjudication  is  reached  in favor of the  complainants  they are  entitled  to
receive  all back pay,  interest  on the back pay,  and  reinstatement  of their
positions with Pop3. This amount could exceed $150,000.

                                       16
<PAGE>

Note 11. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

Below is a listing of the most  recent  accounting  standards  SFAS  145-150 and
their effect on the Company.

Statement  No.  150   Accounting   for  Certain   Financial   Instruments   with
Characteristics of both Liabilities and Equity (Issued 5/03)

This Statement  establishes  standards for how an issuer classifies and measures
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.

Statement No. 151 Inventory  Costs-an amendment of ARB No. 43, Chapter 4 (Issued
11/04)

This statement amends the guidance in ARB No. 43, Chapter 4, Inventory  Pricing,
to  clarify  the  accounting  for  abnormal  amounts of idle  facility  expense,
freight, handling costs, and wasted material (spoilage).  Paragraph 5 of ARB 43,
Chapter 4, previously  stated that "...under some  circumstances,  items such as
idle facility expense,  excessive spoilage, double freight and re-handling costs
may be so abnormal ass to require treatment as current period  charges...." This
Statement  requires  that those items be recognized  as  current-period  charges
regardless  of whether they meet the  criterion of "so  abnormal."  In addition,
this Statement  requires that  allocation of fixed  production  overheads to the
costs  of  conversion  be  based  on  the  normal  capacity  of  the  production
facilities.

Statement  No. 152  Accounting  for Real Estate  Time-Sharing  Transactions  (an
amendment of FASB Statements No. 66 and 67)

This  Statement  amends  FASB  Statement  No. 66,  Accounting  for Sales of Real
Estate,  to reference the financial  accounting and reporting  guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions.

This  Statement  also amends FASB  Statement  No. 67,  Accounting  for Costs and
Initial Rental Operations of Real Estate Projects,  states that the guidance for
(a) incidental  operations  and (b) costs incurred to sell real estate  projects
does not apply to real estate  time-sharing  transactions.  The  accounting  for
those operations and costs is subject to the guidance in SOP 04-2.

Statement No. 153 Exchanges of Non-monetary  Assets (an amendment of APB Opinion
No. 29)

The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is
based on the principle that exchanges of non-monetary  assets should be measured
based on the fair value of the assets  exchanged.  The guidance in that Opinion,
however,  includes  certain  exceptions to the principle.  This Statement amends
Opinion 29 to eliminate  the  exception  for  non-monetary  exchanges of similar
productive  assts and  replaces it with a general  exception  for  exchanges  of
non-monetary  assets  that do not  have  commercial  substance.  A  non-monetary
exchange  has  commercial  substance  if the future cash flows of the entity are
expected to change significantly as a result of the exchange.

The adoption of these new  Statements is not expected to have a material  effect
on the Company's  current  financial  position,  results or operations,  or cash
flows.

                                       17
<PAGE>

Note 12. SUBSEQUENT EVENTS

On May 10,  2005,  the SEC issued a letter to PoP3  Media  Corp.  ("PoP3")  with
several  comments  related to its June 30,  2004 Form  10-KSB/Amendment  #1. The
principal  issue  relates  to  the  accounting  method  Pop3  (formerly  Viastar
Holdings,  Inc.) used in computing the value of the assets acquired  through its
July  23,  2003  acquisition  of  Level X Media  Corp.  Pop3  accounted  for the
acquisition  under purchase  accounting.  The SEC contends that the  acquisition
should have been accounted for as a reverse merger.  The issue is currently in a
resolution  process.  Should  the SEC  prevail  in its  assertion,  PoP3  may be
required  to obtain an audit of the  books of Level X for the two  fiscal  years
prior to the merger. The resulting  financial  statements may reflect a material
decrease  in the  valuation  of the  acquired  assets  reported  by  PoP3 in its
purchase of Level X.

                                       18
<PAGE>

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

Certain matters discussed in this Form 10-QSB are  "forward-looking  statements"
intended to qualify  for the safe  harbors  from  liability  established  by the
Private  Securities   Litigation  Reform  Act  of  1995.  Such   forward-looking
statements may be identified by, among other things,  the use of forward-looking
terminology  such  as  "believes,"   "expects,"   "may,"  "will,"  "should,"  or
"anticipates" or the negative thereof or other variations  thereon or comparable
terminology, or by discussions of strategy that involve risks and uncertainties.

The forward-looking  statements include risks and uncertainties,  including, but
not limited to, the timing of revenues due to the variability in size, scope and
duration of projects, estimates made by management with respect to the Company's
critical  accounting  policies,  cancellations  of projects,  and other factors,
including general economic  conditions,  not within the Company's  control.  The
factors  discussed  herein  and  expressed  from  time to time in the  Company's
filings  with the  Securities  and Exchange  Commission  (the "SEC") could cause
actual results and developments to be materially  different from those expressed
in or implied by such statements.  The forward-looking  statements are made only
as of the date of this  filing  and the  Company  undertakes  no  obligation  to
publicly update such forward-looking  statements to reflect subsequent events or
circumstances.  On August 21, 2003, the Company changed its fiscal year end from
December 31st to June 30th.


General:

On July 18, 2003 the Company entered into a stock purchase  agreement with Level
X Media  Corporation  ("Level  X")  whereby a change in  control  occurred.  The
company obtained all of the assets,  liabilities and outstanding shares of stock
of Level X in  exchange  for a  purchase  price  of  $10,650,000.  The  original
agreement  was for the  exchange of PoP3 common stock valued at $1.00 per share.
However,  the stock was actually trading at the time between $0.20 and $0.26 per
share.  For these  reasons,  in order to resolve this bonified  dispute with the
former  shareholders  of Level X, the following  settlement and amendment to the
original merger agreement was entered into on January 5, 2004. The agreement was
revised as follows:  1,904,100  shares of preferred  stock valued at  $3,809,918
(convertible to 38,082,000  shares of common stock) and 15,164,671 common shares
valued at $6,840,082 were issued for the total purchase price of $10,650,000 The
Company  recognized  goodwill for its  distribution  agreements in the amount of
$7,389,750  and  accounted  for the  acquisition  under the  purchase  method of
accounting.

Level X has the licenses and  agreements  necessary to distribute  media related
products  to over 20,000  retail  outlets  nationwide  and  globally.  The gross
margins  from  this  distribution  channel  and the  development  of music  CD's
in-house has enabled to Company to be more  competitive  than  typical  start-up
record labels which are at the mercy of  distributors  which demand  substantial
payments  to receive  their  products.  The  Company is  distinguished  from its
competition  by  possession  and  control of the  "complete  pipeline"  enabling
development,  production  and  placement  of its product on the shelves of major
retailers nationwide and globally.

On August 21, 2003, the Company  changed its fiscal year end from December 31 to
June 30.

On April 23, 2003 the Company  entered  into a  transaction  to purchase  Moving
Pictures  International  Ltd,  ("MPI") an  entertainment  magazine.  The Company
issued 3,500,000 shares of common stock, par value $0.001 in connection with the


                                       19
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations - continued

purchase of MPI. The purchase of MPI was an elaborate  brokered  transaction  by
the  recipient of the shares.  The brokered  purchase of MPI was  accounted  for
under the purchase method of accounting. Total investment required in MPI by the
Company included the assumption of (undisclosed at the time of sale) substantial
liabilities  and the  payment of shares of the  Company's  common  stock,  which
approximated  $1,200,000.  The  purchase  of MPI was to be  solely  through  the
issuance  of shares of the  Company's  common  stock.  The  Company  through the
actions of a member of prior management and a related party of the seller became
obligated for payments on behalf of MPI. The  obligations  were never audited or
verified  for purposes of the Company and its  shareholders  as required by law.
The transaction was denominated in the English pounds ((pound))  converted to US
dollars ($) for financial  statement purposes.  No foreign currency  translation
adjustment was necessary.

On September 26, 2003 The Company sold the controlling interest in MPI of 80% to
Rhiannon   Holdings,   Inc.   ("RH")(see   "Encumbrances   and   Related   Party
Transactions")  The  purchase  price was as follows,  the RH would return to the
Company, seven million (7,000,000) shares of common stock received as collateral
for the advances/note  payable between RH and the Company, the assumption of all
liabilities  associated with MPI, the assumption of the $700,000 note payable to
BFT and the  issuance of two million  (2,000,000)  shares of common stock with a
stated value of $340,000.  The Company recognized a loss of $240,000 on the sale
of the 80% interest in MPI. The Company is no longer liable for any MPI debt.

On March 31, 2004, the Company issued  10,000,000  shares of its common stock to
the  shareholders  of  MasterDisk  in  exchange  for  all of  their  issued  and
outstanding shares resulting in MasterDisk becoming a wholly owned subsidiary of
the Company.  MasterDisk  headquartered  in New York City, has audio,  video and
multimedia  mastering  facilities  in the  U.S.  and  provides  state of the art
authoring for digital  videodisks,  and  multichannel  5.1  mastering.  For over
thirty years  MasterDisk has provided  quality media mastering  through personal
service, expertise and creativity. The Company recognized goodwill for its trade
name in the amount of  $546,681  and  accounted  for the  acquisition  under the
purchase method of accounting.

On January 23,  2004,  the State of Nevada  approved  an increase of  authorized
capital  (100,000,000  common and 10,000,000  preferred) and changed its name to
ViaStar Media Corporation.

On December 29,  2004,  the State of Nevada  approved an increase of  authorized
capital  (490,000,000  common and 10,000,000  preferred) and changed its name to
Pop3 Media Corp. Results of Operations


FOR THE THREE  MONTHS  ENDED MARCH 31, 2005  COMPARED TO THE THREE  MONTHS ENDED
MARCH 31, 2004

As  discussed  elsewhere  in this  report the  Company  merged  with Level X and
acquired  MasterDisk,  which  became  the  primary  operations  of the  Company.
Managements'  discussion  and  analysis  is the  results  of  operations  of the
"post-merger"  business  and  the  "pre-merger"  operations.   The  "pre-merger"
operations  of the  Company  were  strictly  limited  to the  identification  of
business  opportunities  and  compliance  with  the  laws  of the  SEC.  Limited
activities  were  conducted  in  the   identification   of  various  merger  and
acquisition targets but without much success. The Company's capital requirements
depend on numerous  factors,  including  the  profitability  of our products and
services  and our  ability to  control  costs.  We may need to seek  substantial


                                       20
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations - continued

investment from either financial  institutions or individual investors.  Any new
investment could cause substantial dilution to existing stockholders.


Three months ended March 31, 2005
-------------------------------------

During the three months ended March 31, 2005, the Company generated  $567,513 in
revenues  against  $371,358  in cost of sales  resulting  in a gross  profit  of
$196,155.

Revenue from  mastering was $ 563,888  comprising  99% of the Company's  revenue
during the  reporting  period  ending  March 31 2004,  whereas  revenue from the
distribution  of music  CD's was  $11,551.  This  was a  result  of the  Company
experiencing  significant,  unanticipated returns from sales of its Peter Cetera
Christmas  release  ("Cetera album") in the amount of $65,492 during the period.
The Company did not make an allowance  for returns in the  previous  quarter for
the revenue  recognized on the Cetera album for the following  reasons:  (1) The
Company has the exclusive  North American  license of the Christmas  release and
would not  expect to  experience  direct  competition  from  other new  releases
offered by Mr. Cetera within the same release period. However, Mr. Cetera did in
fact license  other  projects  including a DVD and  compilation  CD to competing
distributors.  These new releases were also being  solicited to retail  accounts
during the same time period as the Christmas  release.  This information was not
disclosed to the Company during its  negotiations  to obtain the exclusive North
American  License rights to the Christmas  title.  This resulted in confusion in
the minds of the retail buyers as to what new releases were  available  from Mr.
Cetera during the 2004  Christmas  season and who the rightful  distributor  for
each individual release was. This also resulted in to much Cetera product on the
market at one time. (2) Negotiations for the License Agreement were completed in
_____2004  leaving  the  Company  very  little  time to  adequately  market  the
Christmas title for the 2004 Christmas season. (3) The Company believed that due
to the long established sales history of "Peter Cetera" that the Company's sales
projections would exceed the amount that it had initially shipped to retail.

As a result,  net sales for the three month  period  ending  March 31, 2005 were
($53,941)  comprising  (9%) of total revenue was from the  distribution of music
CD's. The remaining  $57,566 or 10% of the revenue  resulted from  settlement of
accounts payable to one of the  Distributor's  Vendor accounts,  advertising and
rebates.

During the 3 month period  ending  March 31,  2005,  a corporate  administrative
matter involving a dispute with former Chief Financial Officer/Director, Kenneth
J. Yonika and former General Counsel/Executive Vice President/Director,  Richard
L. Brooks,  has consumed the  majority of  management's  time and efforts.  As a
result,  management  has been  unable to focus on the  business  operations  and
growth of revenue for the Company  which has  resulted  in  significantly  lower
revenue for the period.

For the 3 months ending March 31, 2005, the CD distribution  recognized no gross
margin,  whereas the mastering  division had a gross margin of 34%, as the total
gross profit of $196,155 was comprised of $196,155 from mastering and $0 from CD
sales.

Operating  costs of the mastering  business was $278,856  which was comprised of
$69,580 of payroll  costs,  $18,054 of bad debt,  $25,370 of insurance  expense,
$44,922  in rent and  office  expenses,  $13,539  in  travel  costs,  $7,008  in


                                       21
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations - continued

depreciation   expense  and  the   remaining   $100,383  in  other  general  and
administrative  expenses.  The  resulting  net loss from the  operations  of the
mastering business was $86,326.

Operating costs  attributable to the  distribution  business were $658,308 which
was comprised of about $198,792 of payroll costs,  $98,857 in consulting,  legal
and other professional expenses,  $16,499 in rent and office expenses, $8,862 of
insurance  expense,  $13,102 in travel expenses,  $70,000 in amortized  Business
Development  Costs,  $63,500  in  amortized  Offering  Costs  and the  remaining
$188,696  in other  general  and  administrative  and  marketing  expenses.  The
resulting  net  loss  from  the  operations  of the  distribution  business  was
$654,683.

As a  result  of the  foregoing  factors,  the  Company  incurred  a net loss of
$741,009 for the three months ended March 31, 2005  compared to  $1,023,458  for
the same period  ended March 31,  2004.  The reduced loss was due a reduction in
operating  expenses than the previous period.  This is largely  explained by the
Company  having  incurred  substantial  costs  in its  efforts  to  clean up the
operational problems and corporate practices that were conducted in a manner not
conducive to normal business  practices  during the three months ended March 31,
2004.


Three months ended March 31, 2004
-------------------------------------

The Company generated  $913,463 in revenues  (replication and authoring sales of
$756,224,  and  distribution  sales of  $157,239)  during the three months ended
March 31, 2004,  compared to none for the  comparative  period  ending March 31,
2003.  The  Company  incurred  $427,927 in cost of goods sold  (replication  and
authoring  cost of goods  sold -  $390,639,  distribution  cost of goods  sold -
$37,288) on revenues  generated  during the three  months  ended March 31, 2004,
compared to none for the  comparative  period ending March 31, 2003. The Company
recognized  a gross  margin of $485,536  (replication  and  authoring  margins -
$365,585,  and  distribution  margins - $119,951)  during the three months ended
March 31, 2004,  compared to none for the  comparative  period  ending March 31,
2003. Replication and authoring sales represented 82.7% of total revenues, while
distribution  sales represented 17.3% for the three months ended March 31, 2004.
Replication and authoring cost of goods sold represented  91.3% of total cost of
goods sold, while distribution cost of goods sold represented 8.7% for the three
months ended March 31, 2004.  As a  percentage  of revenues,  cost of goods sold
represented 46.8%, while as separate revenue streams,  replication and authoring
cost of goods sold  represented  51.7% of  replication  and authoring  revenues,
while  distribution  cost  of  goods  sold  represented  23.7%  of  distribution
revenues.  As a percentage of revenues,  gross  margins of 53.2% were  realized,
while as separate revenue streams, gross margins on replication and authoring of
48.3% were realized,  with gross margins on distribution 76.3% were realized. As
revenues from distribution  increases as an overall percentage of revenue, gross
margins shall improve.

Selling,  general and administrative expenses were $331,988 for the three months
ended  March 31,  2004.  Compensation  expense  was  $319,143  (replication  and
authoring compensation - $132,795, and distribution compensation - $199,193) for
the three months ended March 31, 2004.  Professional  fees (which includes legal
counsel along with various litigation costs and estimates) were $391,098 for the
three months ended March 31, 2004. The Company incurred  approximately  $222,500
in consulting and business development  services,  and approximately  $25,000 of


                                       22
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations - continued

professional  fees in  association  with the Company's  development  of internal
software  and  the  technological  feasibility  of  such  software  development.
Depreciation  and  amortization  expense was $449,773 for the three months ended
March 31, 2004.  Depreciation and amortization expense is recognized on the fair
value of the assets  obtained in the merger with Level X and the  acquisition of
MasterDisk.  The Company uses the  straight-line  method of depreciation over an
estimated life of five years and  amortization  ranging from three to ten years.
Depreciation and amortization expense for replication and authoring was $144,816
and for  distribution  was $304,957,  for the three months ended March 31, 2004.
Interest  expense  was  $15,992  for the three  months  ended  March 31, 2004 as
compared to none for the three months ended March 31, 2003.  Interest expense is
attributable primarily to the loans acquired in the MasterDisk transaction.  The
Company has not recognized any additional  losses on the sale of the controlling
interest  in MPI or its  business  operations  as being  impaired.  The  Company
recognized  approximately  $450,000 in depreciation and amortization expense and
$250,000 in accrued professional fees and salaries. As a result of the foregoing
factors,  we incurred a net loss of $1,023,458  for the three months ended March
31, 2004.

FOR THE NINE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE NINE MONTHS ENDED MARCH
31, 2004

As  discussed  elsewhere  in this  report the  Company  merged  with Level X and
acquired  MasterDisk,  which  became  the  primary  operations  of the  Company.
Managements'  discussion  and  analysis  is the  results  of  operations  of the
"post-merger"  business  and  the  "pre-merger"  operations.   The  "pre-merger"
operations  of the  Company  were  strictly  limited  to the  identification  of
business  opportunities  and  compliance  with  the  laws  of the  SEC.  Limited
activities  were  conducted  in  the   identification   of  various  merger  and
acquisition targets but without much success. The Company's capital requirements
depend on numerous  factors,  including  the  profitability  of our products and
services  and our  ability to  control  costs.  We may need to seek  substantial
investment from either financial  institutions or individual investors.  Any new
investment could cause substantial dilution to existing stockholders.


Nine months ended March 31, 2005
-------------------------------------

During the nine months ended March 31, 2005, the Company generated $2,197,015 in
revenues  against  $1,074,204  in cost of sales  resulting  in a gross profit of
$1,122,811.

Revenue from mastering was $ 1,603,254  comprising 73% of the Company's  revenue
whereas only $431,805  comprising 20% of total revenue was from the distribution
of music CD's. The remaining  $161,956 or 7% of the revenue was from  settlement
of accounts payable to one of the Distributor's Vendor accounts, advertising and
rebates.  The CD  distribution  recognized  superior gross margin of 99% for the
nine month period,  whereas the mastering division had a smaller gross margin of
33%, as the total gross profit of  $1,122,811  was  comprised  of $531,937  from
mastering and $590,874 from CD sales.

Operating  costs of the mastering  business was $820,083  which was comprised of
$247,683 of payroll costs,  ($5,757) of bad debt,  $78,282 of insurance expense,
$158,630  in rent and  office  expenses,  $40,728  in travel  costs,  $21,024 in
depreciation   expense  and  the   remaining   $279,493  in  other  general  and


                                       23
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations - continued

administrative  expenses.  The  resulting  net loss from the  operations  of the
mastering business was $288,146.

Operating costs attributable to the distribution  business were $1,717,746 which
was comprised of about $592,231 of payroll  costs,  $209,854 in the write-off of
obsolete  inventory,  $244,006  in  consulting,  legal  and  other  professional
expenses,  $50,540 in rent and office  expenses,  $70,000 in amortized  Business
Development  Costs,  $63,500 in amortized  Offering Costs,  $28,363 of insurance
expense, $22,830 in travel expenses, and the remaining $436,422 in other general
and  administrative  and  marketing  expenses.  The  resulting net loss from the
operations of the distribution business was $1,129,872

As a  result  of the  foregoing  factors,  the  Company  incurred  a net loss of
$1,418,017  for the nine months ended March 31, 2005 compared to $3,595,845  for
the same period  ended March 31,  2004.  The reduced  loss was due to  increased
gross profit with reduced  operating  expenses  compared to that of the previous
period.  This is largely  explained by the Company having  incurred  substantial
costs  in its  efforts  to  clean  up the  operational  problems  and  corporate
practices  that were  conducted  in a manner not  conducive  to normal  business
practices during the nine months ended March 31, 2004.


Nine months ended March 31, 2004
-------------------------------------

The Company generated $2,525,467 in revenues  (replication and authoring sales -
$2,013,747,  and  distribution  sales - $433,074)  during the nine months  ended
March  31,  2004.  The  Company  incurred  $1,188,086  in  cost  of  goods  sold
(replication and authoring cost of goods sold - $1,041,702, distribution cost of
goods sold - $114,971) on revenues  generated during the nine months ended March
31, 2004. The Company  recognized a gross margin of $1,337,381  (replication and
authoring  margins - $972,045,  and distribution  margins - $318,103) during the
nine months ended March 31, 2004.  Replication and authoring  sales  represented
79.7% of total revenues, while distribution sales represented 20.3% for the nine
months  ended  March 31,  2004.  Replication  and  authoring  cost of goods sold
represented 87.7% of total cost of goods sold, while  distribution cost of goods
sold represented 12.3% for the nine months ended March 31, 2004. As a percentage
of revenues,  cost of goods sold  represented  47.0%,  while as separate revenue
streams,  replication  and  authoring  cost of goods sold  represented  51.7% of
replication  and  authoring  revenues,  while  distribution  cost of goods  sold
represented 26.5% of distribution  revenues. As a percentage of revenues,  gross
margins of 52.9% were realized, while as separate revenue streams, gross margins
on  replication  and  authoring of 48.3% were  realized,  with gross  margins on
distribution 73.5% were realized. The Company for the time period that it held a
controlling  interest in MPI recognized  revenue from advertising of $78,646 and
advertising cost of goods sold of $31,413.  The Company recognized gross margins
of $47,233 from  advertising.  The Company owned a  controlling  interest in MPI
from July 2003 through September 2003.


Selling,  general and administrative  expenses were $884,302 for the nine months
ended  March 31,  2004.  Compensation  expense  was  $851,047  (replication  and
authoring compensation - $333,815, and distribution compensation - $517,232) for
the nine months ended March 31, 2004.  Professional  fees (which  includes legal
counsel along with various  litigation  costs and estimates) were $1,369,338 for
the nine  months  ended  March 31,  2004.  The  Company  incurred  approximately
$400,000 in consulting  and business  development  services,  and  approximately


                                       24
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations - continued

$46,000 of professional  fees in association  with the Company's  development of
internal   software  and  the   technological   feasibility   of  such  software
development.  Depreciation and amortization  expense was $1,428,010 for the nine
months  ended  March  31,  2004.   Depreciation  and  amortization  expense  for
replication and authoring was $438,836 and for  distribution  was $989,174,  for
the nine months ended March 31, 2004.  Interest expense was $55,529 for the nine
months ended March 31, 2004.  Interest expense is attributable  primarily to the
loans acquired in the MasterDisk transaction. The Company recognized a write off
of  $100,000  for the nine  months  ended  March  31,  2004 for the  ClubCharlie
screenplay rights.

As a result of the foregoing  factors,  we incurred a net loss of $3,595,845 for
the nine months ended March 31, 2004.


Liquidity and Capital Resources

During the nine months ended March 31, 2005,  the Company used $843,655 from its
operations and received $50,000 from the sale of 1,000,000 of its common shares,
$500,000 from the proceeds of a debenture and $288,301 from loan  proceeds.  The
use of cash from operations was primarily caused from an increase of $128,871 in
receivables and an increase of $317,998 in outstanding liabilities.

During the nine months ended March 31, 2005,  the Company  financed the majority
of its $1,815,853 loss from  operations  with the issuance of 11,872,651  shares
for  services  valued at  $343,415.  The  services  provided  were  comprised of
$120,000 in business development, $100,000 in employee bonuses, $80,000 in legal
fees, and $43,415 in business consulting fees.

Interest  expense of $10,250 was paid with the  issuance  of 400,000  restricted
shares.

At March 31,  2005 the  Company  had  $31,253  of cash and  working  capital  of
($737,552).


Going Concern

As discussed in the accompanying  consolidated  financial statements and results
of operations contained in the management's discussion and analysis section, the
Company and its predecessors  have incurred  approximately  $7,000,000 in losses
since  inception.  This, as well as the risks  associated  with raising  capital
through the issuance of equity and/or debt securities, creates uncertainty as to
the Company's ability to continue as a going concern.

Management  believes  that the above  problems  are being  resolved and plans to
address its going-concern issue through the following:

     *    Expanding  or  increasing  its  distribution  of products and services
          through its subsidiaries;

     *    Expanding market presence through selective acquisitions or the merger
          of, with established media and entertainment companies;

     *    Raising  capital  through the sale of debt and/or  equity  securities;
          and,

     *    Settling  outstanding  debts  and  accounts  payable,  when  possible,
          through the  reorganization  or  recapitalization  of obligations with
          either longer terms or the issuance of debt and/or equity securities.

                                       25
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations - continued

There can be no assurance  that the Company will be successful in its efforts to
increase sales and to issue debt and/or equity securities for cash or as payment
for  outstanding  obligations.  Capital-raising  efforts  may be  influenced  by
factors  outside of the control of the Company,  including,  but not limited to,
capital market conditions. During the nine months ended March 31, 2004 and March
31, 2005, the Company raised capital  through the issuance of equity  securities
totaling approximately $200,000 and $50,000 in the aggregate, respectively.

The ability of the Company to continue as a going concern is dependent  upon its
success in obtaining  additional  sources of capital,  and attaining  sufficient
growth  in its  customer  base and  services  to  enable  it to  achieve  future
profitability.   The  accompanying  financial  statements  do  not  include  any
adjustments  that might be necessary should the Company be unable to continue as
a going concern.

On December 22, 2004 the Company  entered into an agreement with Cornell Capital
Partners,   LP  to  obtain  $500,000  bridge  financing  through  the  issue  of
convertible debentures and equity financing up to $5,000,000 through the sale of
common stock to Cornell.  The first $250,000  debenture was issued  November 30,
2004 to Montgomery  Equity  Partners,  Ltd. The debenture  carries a 7% per year
interest rate with the entire  principle  and interest due August 30, 2005.  The
Holder  of the  debenture  can  convert  the  principle  and  interest  into the
Company's  common  stock at an amount  equal to 120% of the closing bid price of
the common shares on the date of conversion.

The Company also has the right to redeem the principle and accumulated  interest
of any  outstanding  debentures  into  Common  Stock  at a price  of 120% of the
closing bid price.  Should the company exercise its right to redeem,  the holder
is entitled to receive a  three-year  warrant to purchase  50,000  shares of the
Company's common stock for every $100,000 principle and interest  redeemed.  The
warrant can be exercised on a "cash basis" with an exercise price of 120% of the
closing bid price on the date the debenture is redeemed.

The Company issued  4,486,940  common shares,  valued at $150,000 to obtain this
equity financing.


Item 3. Controls and Procedures


As of the end of the fiscal quarter to which this report  relates  (December 31,
2004),  we  carried  out an  evaluation,  under  the  supervision  and  with the
participation  of management,  including our Chief  Executive  Officer and Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of our
disclosure controls and procedures,  as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended. Based on this evaluation,
the Chief Executive  Officer and Chief Financial  Officer,  concluded that as of
the date of that evaluation our disclosure controls and procedures are effective
in timely alerting them to material  information  required to be included in our
periodic  SEC  reports.  It should be noted  that the  design of any  systems of
controls  is based in part upon  certain  assumptions  about the  likelihood  of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all potential future conditions,  regardless of
how remote.

There have been no  significant  changes in our  internal  controls  or in other
factors that could significantly affect internal controls or financial reporting
subsequent to the date we carried out this evaluation.

                                       26
<PAGE>

Item 3. Controls and Procedures - continued

The  Company's  disclosure  controls  and  procedures  are designed to provide a
reasonable  level of  assurance  of reaching the  Company's  desired  disclosure
objectives and are effective in reaching that level of reasonable assurance.


Item  4.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

None.

                                       27
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On October 25, 2004, former Chief Financial  Officer/Director Kenneth J. Yonika,
and former General  Counsel/Executive Vice President/Director  Richard L. Brooks
of Pop3 Media Corp. ("Pop3"), ("Complainants") filed with the U.S. Department of
Labor Occupational Safety & Health Administration  ("OSHA") a complaint alleging
discriminatory  employment  practices in violation of the  Sarbanes-Oxley Act of
2002.  Pop3  fervently  asserts that these claims are false and will  vigorously
defend  itself  until the  matter has  reached a just  conclusion.  Pop3  firmly
believes  that the  Complainants'  allegations  amount to  nothing  more than an
attempt to extort  additional  value  from the  shareholders  of Pop3.  If final
adjudication  is  reached  in favor of the  complainants  they are  entitled  to
receive  all back pay,  interest  on the back pay,  and  reinstatement  of their
position with Pop3. This amount could exceed $150,000.


Item 2. Changes in Securities.

During the nine  months  ended March 31,  2005 the  Company  made the  following
issuances and sales of  securities  in reliance  upon the exemption  provided by
Section 4(2) of the Securities Act of 1933.

On July 1, 2004,  the Company issued  1,000,000  common shares valued at $80,000
for legal services. The issuance of the stock was exempt from registration under
Section 4(2) of the Securities Act.

On July 26, 2004, the Company issued 81,281  registered  common shares valued at
$3,000 and on August 30, 2004 the Company issued 45,000 registered common shares
valued at $3,000 under the Company's  First  Amended 2003  Employees/Consultants
Common Stock Compensation Plan for consulting services.

On July 30, 2004, the Company issued 6,791,370 common shares to two employees as
an  exercise  of  options.  A total of $70,000 in cash was  received  and a note
subscription for $30,000 was received for the issuance of the common shares. The
issuance of the stock was exempt from  registration  under  Section  4(2) of the
Securities Act.

On August 31, 2004, the Company issued  3,000,000  common shares to a consultant
for  business  development  valued at  $120,000.  The  issuance of the stock was
exempt from registration under Section 4(2) of the Securities Act.

On September 15, 2004,  the Company issued 500,000 common shares to a company as
a finder  fee  valued at  $27,000.  Also on the same date,  the  Company  issued
1,000,000  restricted  common shares in a private  placement to eight accredited
individuals for $50,000.  The issuance of the stock was exempt from registration
under Section 4(2) of the  Securities  Act. No  underwriter  was involved in the
offer of sale of the shares.

On September 30, 2004,  the Company  issued  100,000 common shares for $4,500 of
interest  owed to an  individual.  The  issuance  of the stock was  exempt  from
registration under Section 4(2) of the Securities Act.

On October 1, 2004,  the Company  issued  2,500,000  common  shares in a private
placement to eight accredited individuals for $50,000. The issuance of the stock
was exempt  from  registration  under  Section  4(2) of the  Securities  Act. No
underwriter was involved in the offer of sale of the shares.

                                       28
<PAGE>

Item 2.   Changes in Securities - continued

On October 22, 2004, the Company issued  4,187,811 common shares to a company as
a commitment fee valued at $140,000.

On October 22, 2004,  the Company issued 299,129 common shares to a company as a
placement agent fee valued at $10,000.

On December 9, 2004,  the Company  issued  100,000  common  shares for $1,750 of
interest  owed to an  individual.  The issuance of the stock was exempt from the
registration under Section 4(2) of the Securities Act.

On December 13, 2004, the Company issued 1,000,000 registered common shares to a
company   valued  at   $36,000   under  the   Company's   First   Amended   2003
Employees/Consultants Common Stock Compensation Plan for consulting services.

On January 18, 2005,  the Company  issued  100,000 shares for $2,000 of interest
owed  to  an  individual.  The  issuance  of  the  stock  was  exempt  from  the
registration under Section 4(2) of the Securities Act.

On March 29, 2005, the Company issued 100,000 shares for $2,000 of interest owed
to an  individual.  The  issuance of the stock was exempt from the  registration
under Section 4(2) of the Securities Act.

On April 29,  2005,  the Company  issued  282,921  registered  common  shares to
various   employees  valued  $6,875  under  the  Company's  First  Amended  2003
Employees/Consultants Common Stock Compensation Plan for Services performed.


Item 3. Defaults Upon Senior Securities.

None.


Item 4. Submission of Matters to a Vote of Security Holders.

Form 14-C filed December 9, 2004 regarding corporate name change and increase of
authorized outstanding shares.

Item 5. Other Information.

None.

Item 6. Exhibits, List, and Reports on Form 8-K.

(a) Exhibits.

Exhibit No.    Description of Exhibit
---------- ---------------------------------------------------------------------
31.1      Certification  of Chief Executive  Officer  Pursuant to Section 302 of
          the  Sarbanes-Oxley  Act of 2002 and Rules 13(a)-14 and 15(d)-14 under
          the Securities Exchange Act of 1934
31.2      Certification  of Interim Chief Financial  Officer Pursuant to Section
          302 of the  Sarbanes-Oxley Act of 2002 and Rules 13(a)-14 and 15(d)-14
          under the Securities Exchange Act of 1934
32.1      Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
          1350.
32.2      Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
          1350.

                                       29
<PAGE>

Item 6. Exhibits, List, and Reports on Form 8-K - continued

(b) Reports on Form 8-K.

     The Company filed the following reports on Form 8-K:

     (1)  Form 8-K filed August 6, 2004 on Item 5.02  regarding  resignation  of
          Secretary and Chief Financial Officer.

     (2)  Form 8-K  filed  October  20,  2004 on Item 4.01  regarding  change in
          registrants certifying accountant.

     (3)  Form 8-K filed November 16, 2004 on Item 5.02 regarding appointment of
          Sam Messina as Chief Financial Officer.

     (4)  Form 8-K filed  January 4, 2005, on Item 1.01  regarding  Entry into a
          Material Definitive Agreement



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 this 14th day of February
2005. POP3 MEDIA CORP

                                                        /s/ JOHN D. AQUILINO
                                                       -------------------------
                                                        By: John D. Aquilino
                                                        Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

    Signature                         Title                          Date
---------------------------------- ------------------------------ ------------

  /s/ JOHN D. AQUILINO             President and Chief            5/23/2005
 --------------------------------- Executive Officer
      John D. Aquilino             (principal executive officer)



 /s/ SAM MESSINA                   Chief Financial Officer        5/23/2005
 --------------------------------- (principal financial and
     Sam Messina                   accounting officer)


                                       30
<PAGE>