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 December 31, 2004

                        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  December  31,  2004:  Common  stock,  $0.001  par value -
70,747,443

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


                                       1
<PAGE>





                                TABLE OF CONTENTS
                         PART I - FINANCIAL INFORMATION

Item                                                                      Page
----                                                                      ----

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

     Condensed Consolidated Balance Sheets .................................. 4

     Condensed Consolidated Statements of Operations 3 months ............... 5

     Condensed Consolidated Statements of Operations 6 months ............... 6

     Condensed Consolidated Statements of Cash Flows ........................ 7

     Notes to Condensed Consolidated Financial Statements ................... 8

2.   Management's  Discussion and Analysis of Financial Condition
      and Results of Operations .............................................18

3.   Controls and Procedures ................................................24

4.   Changes in and Disagreements  with Accountants on Accounting
      and Financial Disclosure ..............................................25

5.   Legal Proceedings ......................................................25

6.   Changes in Securities ..................................................25


PART II - OTHER INFORMATION


3.   Defaults Upon Senior Securities ........................................27

4.   Submission of Matters to a Vote of Security Holders ....................27

5.   Other Information ......................................................27

6.   Exhibits, List, and Reports on Form 8-K ................................27

SIGNATURES ..................................................................28


                                       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 December  31,  2004,  and June 30,  2004 and the  associated
consolidated  statements of operations,  stockholders' equity and cash flows for
the three months and six months  ended  December 31, 2004 and December 31, 2003.
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.

February 10, 2005


                                       3
<PAGE>

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

                                     ASSETS
                                                 December 31,
                                                     2004            June 30,
                                                  (Unaudited)          2004
                                              ---------------- ----------------

CURRENT ASSETS
      Cash                                     $        87,605  $       116,628
      Accounts Receivable - Net                        917,168          635,795
      Prepaid Expense                                  146,000
      Other Receivables                                    998           18,108
      Inventory                                        861,168        1,032,142
                                              ---------------- ----------------

      Total Current Assets                           2,012,939        1,802,673
                                              ---------------- ----------------

LONG TERM ASSETS

      Capitalized Software, Net                        870,750          870,750
      Property and Equipment, Net                    4,790,021        4,892,396
      Goodwill and other intangible Assets, Net      7,936,431        7,936,431
      Investments                                       13,736           13,736
      Business Development                             216,000
      Deferred Income Tax Benefit                      279,430          279,430
      Artist Advances                                  330,943          114,647
      Other Assets                                      43,945           13,420
      Notes Receivable                                  92,013           92,013

                                              ---------------- ----------------
      Total Long Term Assets                        14,573,269       14,212,823
                                              ---------------- ----------------

TOTAL ASSETS                                   $    16,586,208  $    16,015,496
                                              ================ ================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Current Liabilities
      Accounts Payable and Accrued Expenses    $     1,405,134  $     1,146,291
      Related Party Liabilities and Advances             1,872           19,716
      Debenture Payable                                250,000                -
      Notes Payable - Current Portion                  126,440                -

      Other Current Liabilities                        100,461                -
      Credit Line - Financial Institution              260,032          214,500
                                              ---------------- ----------------

      Total Current Liabilities                      2,143,939        1,380,507

Non-Current Liabilities

      Notes Payable - Non-current Portion              213,445                -
      Original Issue Discount                         (177,000)

      Other liabilities                                  4,763          322,352
                                              ---------------- ----------------

      Total Non-Current Liabilities                     41,208          322,352
                                              ---------------- ----------------

TOTAL LIABILITIES                                    2,185,147        1,702,859
                                              ---------------- ----------------
STOCKHOLDERS' EQUITY

      Preferred Stock authorized
      10,000,000 shares, $0.01 par value.
      Issued and outstanding December 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
      December 31, 2004; 70,747,443 shares and
      June 30, 2004

      52,451,642 shares.                                70,749           52,453

      Paid in Capital                               20,641,131       19,892,278

      Retained Earnings/(Deficit)                   (6,329,360)      (5,650,635)
                                              ---------------- ----------------

      Total Stockholders' Equity/(Deficit)          14,401,061       14,312,637
                                              ---------------- ----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                           $    16,586,208  $    16,015,496
                                              ================ ================


The accompanying notes are an integral part of these statements

                                       4
<PAGE>


                                 POP3 MEDIA CORP
                     CONSOLIDATION STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                    Three Months Ended
                                            -----------------------------------
                                            December 31, 2004 December 31, 2003
                                            ----------------- -----------------

   INCOME

      Revenues                               $        953,019  $        213,000
      Other Income                                    103,418
                                            ----------------- -----------------

      Gross Income                                  1,056,437           213,000

   COST OF GOODS SOLD                                 368,530            43,825
                                            ----------------- -----------------


      Gross Profit / (Loss)                           687,907           169,175
                                            ----------------- -----------------
                                                                               .
   EXPENSES

      Compensation                                    280,422           115,931

      Professional and Consulting Fees                102,486           504,418

      General and Administrative                      352,362            82,573

      Depreciation                                     45,571           588,977
      Write-Down Obsolete Inventory
      Loss on Investment
      Interest Expense                                                100,000

                                                       26,404             3,372
                                            ----------------- -----------------

      Total Expense                                   807,245         1,395,271
                                            ----------------- -----------------


   (LOSS) BEFORE INCOME TAXES                        (119,338)       (1,226,096)


      Provision for Income Taxes                        450
                                            ----------------- -----------------

   NET (LOSS)                                $       (119,788) $     (1,226,096)
                                            ================= =================

   NET (LOSS) PER COMMON SHARE
                                             $          (0.00) $          (0.04)

                                             $          (0.00) $          (0.02)

   Weighted average number of Shares
      Basic                                        63,186,296        30,143,231
      Diluted                                     100,268,296        58,704,731


   The accompanying notes are an integral part of these statements

                                       5
<PAGE>

                                 POP3 MEDIA CORP
                     CONSOLIDATION STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                        Six Months Ended
                                            -----------------------------------
                                            December 31, 2004 December 31, 2003
                                            ----------------- -----------------
INCOME

      Revenues                               $      1,510,141  $        354,481
      Other Income                                    119,841
                                            ----------------- -----------------

      Gross Income                                  1,629,982           354,481

COST OF GOODS SOLD                                    702,846           109,096
                                            ----------------- -----------------

      Gross Profit / (Loss)                           927,136           245,385
                                            ----------------- -----------------

EXPENSES

      Compensation                                    571,542           166,735
      Professional and Consulting Fees                145,150           963,240
      General and Administrative                      616,433           125,575
      Depreciation                                     91,142           964,237
      Write-Down Obsolete Inventory                   170,974
      Loss on Investment                                                240,000
      Write off of Screenplay                                           100,000
      Interest Expense                                 10,620            19,971

                                            ----------------- -----------------

      Total Expense                                 1,605,861         2,579,758
                                            ----------------- -----------------

(LOSS) BEFORE INCOME TAXES                           (678,725)       (2,334,373)

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

NET (LOSS)                                   $       (678,725) $     (2,335,373)
                                            ================= =================

NET (LOSS) PER COMMON SHARE
                                             $          (0.01) $          (0.08)
                                             $          (0.01) $          (0.04)

Weighted average number of Shares
      Basic                                        63,186,296        30,143,231
      Diluted                                     100,268,296        58,704,731

The accompanying notes are an integral part of these statements

                                       6
<PAGE>

                                 POP3 MEDIA CORP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                        Six Months Ended
                                            December 31, 2004 December 31, 2003
                                            ----------------- -----------------
Operating Activities

   Net (Loss)                                $       (678,725) $     (2,335,373)

   Significant Non-Cash Transactions
      Loss on Sale of non-affiliate                                     240,000
      Common Stock for Interest                         6,250
      Common Stock for Services                       483,899           727,000
      Common Stock to obtain financing                177,000
      Write-Off Obsolete Equipment                     11,233                 -
      Write-Off Screenplay Rights                                       100,000
      Business Development                           (216,000)
      Bad Debt Expense                                                   20,049
      Depreciation Expense                             91,142           964,237
   Changes in assets and liabilities
      Receivables                                    (264,263)         (271,813)
      Increase in Artist Advances                    (216,296)
      Other Assets                                    (30,525)          (13,928)
      Decrease in Inventory                           170,974            40,704
      Increase in Original Issue Discount            (177,000)
      Decrease in Other Liabilities                  (217,128)
      Decrease/(Increase) in  Prepaid
         Expense                                     (146,000)
      Increase in Notes Payable                       339,885
      Due Officers and Directors                      (17,844)          (65,896)
      Increase in Accounts Payable                    258,843           320,940
                                            ----------------- -----------------

Net Cash (Used) by Operating Activities              (424,555)         (274,080)
                                            ----------------- -----------------
Investing Activities

      Purchase of Equipment                                 -            (4,668)
                                            ----------------- -----------------

Net Cash (Used) by Investing Activities                     -            (4,668)
                                            ----------------- -----------------
Financing Activities
      Proceeds from Related Parties                                     100,000
      Proceeds from Credit Line                        45,532
      Proceeds from loans                             300,000

      Proceeds from sale of Common Stock               50,000           200,000
                                            ----------------- -----------------


Cash Provided by Financing Activities                 395,532           300,000
                                            ----------------- -----------------

Net Increase/(Decrease) in Cash                       (29,023)           21,252

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

Cash, End of Period                          $         87,605  $         21,252
                                            ================= =================

Significant Non-Cash Transactions
       See Note pertaining to Stockholders' Equity

Supplemental Information:

       Period Interest                       $         37,025  $              -

       Income Taxes Paid                                    -                 -

The accompanying notes are an integral part of these statements

                                       7
<PAGE>

                        PoP3 Media Corp and Subsidiaries

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                       December 31, 2004 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 an  agreement  and  plan  of  merger  with  Level X Media
Corporation  ("Level  X") whereby a change in 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 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 changedamended its Articles of Incorporation, changing its
name to PoP3 Media Corp and increasing of its 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 December
31, 2004 and June 30, 2004, and the consolidated  results of operations and cash
flows for the, six months ended December 31, 2004 and 2003. 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.


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.

                                       8
<PAGE>

Note 1. OVERVIEW OF OPERATIONS AND ACCOUNTING POLICIES - continued

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.

                                       9
<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 December 31, 2004 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.  As of December 31, 2004, the Company
has accumulated a $6,329,360 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.

                                       10
<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:

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

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

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

     o    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

The Company  will not 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 December 31, 2004:


                                              December 31, 2004   June 30, 2004
                                              ----------------- ---------------

   Trade Name Purchased (MasterDisk)           $        546,681  $      546,681

   Distribution Agreement                             7,389,750       7,389,750
                                              ----------------- ---------------

   Total Goodwill and Other Intangible Assets  $      7,936,431  $    7,936,431
                                              ================= ===============


                                       11
<PAGE>

Note 4. INVENTORY

Company  inventory at December 31, 2004 is $861,168 and  $1,032,142  at June 30,
2004.  The  change in  inventory  includes  cost of goods  sold plus a  $170,974
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.


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 December 31, 2004 and June 30, 2004 is
$870,750.


Note 6. PROPERTY AND EQUIPMENT

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


                                              December 31, 2004   June 30, 2004
                                              ----------------- ---------------

   Furniture and Fixtures                      $        932,348  $      932,348

   Studio Facilities                                  4,695,377       4,695,377

   Accumulated Depreciation                            (837,704)       (735,691)
                                              ----------------- ---------------

   Property and Equipment, Net                 $      4,790,021  $    4,892,396
                                              ================= ===============

Note 7. DEBENTURES

On October 22, 2004, the Company  entered into a Securities  Purchase  Agreement
with  Montgomery  Equity  Partners,  Ltd.  Pursuant to the  Securities  Purchase
Agreement,  the Company shall issue convertible  debentures to Montgomery Equity
Partners,  Ltd. in the original principal amount of $500,000.  The $500,000 will
be  disbursed  as follows:  $250,000  was  disbursed  on  November  30, 2004 and
$250,000  shall be  disbursed  within five days of the filing of a  registration
statement  related to the shares  issueable upon  conversion of the  convertible
debentures. The debentures are convertible at the holder's option any time up to
maturity at a conversion price equal to the lower of (i) 120% of the closing bid
price  of the  common  stock on the  date of the  debentures  or (ii) 80% of the
lowest  closing  bid  price  of the  common  stock  for the  five  trading  days
immediately  preceding the  conversion  date.  The debentures are secured by the

                                       12
<PAGE>

Note 7. DEBENTURES - continued

assets of the Company.  The debentures  have a two-year term and accrue interest
at 7% per year. At maturity,  the  debentures  will  automatically  convert into
shares of common stock at ta conversion  price equal to the lower of (i) 120% of
the closing bid price of the common stock on the date of the  debentures or (ii)
80% of the lowest  closing bid price of the common  stock for five  trading days
immediately preceding the conversion date.

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. STANDBY EQUITY DISTRIBUTION AGREEMENT

On October 22,  2004,  the Company  entered into a Standby  Equity  Distribution
Agreement  with Cornell  Capital  Partners,  LP.  Pursuant to the Standby Equity
Distribution Agreement, the Company may, at its discretion, periodically sell to
Cornell Capital  Partners,  LP shares of common stock for a total purchase price
of up to $5.0  million.  For each  share of  common  stock  purchased  under the
Standby Equity Distribution Agreement,  Cornell Capital Partners LP will pay the
Company 95% of the lowest volume weighted  average price of the Company's common
stock as quoted by Bloomberg, LP on the Over-the-Counter Bulletin Board or other
principal  market on which the  Company's  common stock is traded for the 5 days
immediately  following the notice date.  Cornell Capital Partners,  LP will also
retain 5% of each  advance  under the  Standby  Equity  Distribution  Agreement.
Cornell Capital Partner's  obligation to purchase shares of the Company's common
stock  under the Standby  Equity  Distribution  Agreement  is subject to certain
conditions,  including the Company obtaining an effective registration statement
for shares of common stock sold under the Standby Equity Distribution  Agreement
and  is  limited  to  $500,000  per  weekly.  Pursuant  to  the  Standby  Equity
Distribution   Agreement  Cornell  Capital  Partners,  LP  received  a  one-time
commitment  fee equal to $140,000 of the  Company's  common stock on October 22,
2004.  The Company also paid  Newbridge  Securities  Corporation  a fee equal to
$10,000 of the Company's common stock based on the price of the Company's common
stock on October  22,  2004 under a placement  agent  agreement  relating to the
Standby Equity  Distribution  Agreement.  The Company  issued a total  4,486,940
common shares, valued at $150,000 to obtain this equity financing.


Note 9. 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  with  Level X Media
Corporation  ("Level  X") whereby a change in 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 ViaStar
Media Corporation. On March 31, 2004, the Company acquired all of the issued and


                                       13
<PAGE>

Note 9. STOCKHOLDERS' EQUITY - continued

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 amended its Articles of  Incorporation,  changing its name
to PoP3 Media Corp.  and  increasing of its  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 29, 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, through December 31, 2004, the Company issued 1,000,000 common shares
for $50,000 cash;  2,500,000  common shares to settle $50,000 debt;  200,000 for
payment of $6,050  interest;  10,108,861  common  shares for services  valued at
$483,899  and  4,486,940  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.  The Company on  September  26, 2003 entered into an
agreement to sell MPI and relieve itself of the debt.

                                       14
<PAGE>

Note 9. STOCKHOLDERS' EQUITY - continued

Encumbrances and Related Party Transactions
-------------------------------------------

During the nine month  period  ended  March 31,  2004,  the  Company  encumbered
7,000,000  shares of common stock  (stated value of  $1,490,000)  with a related
party of the MPI seller of $700,000.  The funds were  advanced  from the related
party of the MPI seller to settle  outstanding  obligations  (but undisclosed at
the time of sale) of MPI.  Monies were  advanced with the condition (1) that the
short-term  advances  would be secured by the  issuance of  2,000,000  shares of
common  stock of the Company  (which  occurred  prior to June 30,  2003) and the
issuance of  5,000,000  shares of common  stock of the Company  (which  occurred
subsequent to June 30, 2003), (2) in the event the Company was not able to repay
the monies  advanced the affiliate would take free and clear title to the common
stock.

The advances and rights  associated  with the advances were  transferred  to and
assumed by the related party of the MPI seller.  The Company entered into a note
payable with the related party of the MPI seller in the amount of $700,000, with
interest  payments  of $6,000  per month  for a period  of 24  months,  with the
remaining principal and interest due and payable on the 24th month. On September
26, 2003 the affiliate  entered into a transaction  whereby the related party of
the MPI seller would purchase an 80%  controlling  interest in MPI. The purchase
price was as follows,  the related  party of the MPI seller  would return to the
Company, seven million (7,000,000) shares of common stock received as collateral
for the advances/note payable, the assumption of all liabilities associated with
MPI, the assumption of the $700,000 note payable and the issuance of two million

(2,000,000) shares of common stock. The Company recognized a loss of $240,000 on
the sale of MPI.


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.  The agreement was revised so that  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 an 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.

                                       15
<PAGE>

Note 9. STOCKHOLDERS' EQUITY - continued

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.


Note 10. 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 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.

SFAS 146 Accounting for Costs Associated with Exit or Disposal Activities

                                       16
<PAGE>

Note 11. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS - continued

This statement  requires  companies to recognize  costs  associated with exit or
disposal  activities,  other than SFAS 143 costs,  when they are incurred rather
than at the date of a commitment to an exit or disposal plan.  Examples of these
costs are lease  termination  costs,  employee  severance costs  associated with
restructuring,  discontinued operation, plant closing, or other exit or disposal
activity. This statement is effective after December 15, 2002.

SFAS 147 Acquisitions of Certain  Financial  Institutions - an amendment of FASB
Statement No. 72 and 144 and FASB Interpretation No. 9.

This statement  makes the acquisition of financial  institutions  come under the
statements 141 and 142 instead of statement 72, 144 and FASB  Interpretation No.
9. This statement is applicable for acquisition on or after October 1, 2002.

SFAS 148 Accounting for Stock-Based Compensation - Transition and Disclosure

Amends FASB 123 to provide  alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation.

SFAS 149  Amendment  of  Statement  133 on  Derivative  Instruments  and Hedging
Activities

This  Statement  amends and  clarifies  financial  accounting  and reporting for
derivative  instruments,  including certain derivative  instruments  embedded in
other  contracts  (collectively  referred  to as  derivatives)  and for  hedging
activities under FASB Statement No. 133,  Accounting for Derivative  Instruments
and Hedging Activities.

SFAS 150 Financial  Instruments  with  Characteristics  of both  Liabilities and
Equity

This  statement  requires that such  instruments be classified as liabilities in
the balance sheet. SFAS 150 is effective for financial  instruments entered into
or modified after May 31, 2003.

Interpretation No. 46 (FIN 46)

Effective  January 31, 2003, The Financial  Accounting  Standards Board requires
certain variable interest entities to be consolidated by the primary beneficiary
of  the  entity  if  the  equity  investors  in  the  entity  do  not  have  the
characteristics  of a continuing  financial  interest or do not have  sufficient
equity at risk for the  entity to  finance  its  activities  without  additional
subordinated  financial support from other parties. The Company has not invested
in any such entities, and does not expect to do so in the foreseeable future.

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>

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.

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.  The agreement was revised so that  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  September  26,  2003,  the Company  entered into an agreement to sell an 80%
controlling  interest  of Moving  Pictures  International  Ltd "MPI" and relieve
itself of the debt. The Company had originally  entered into a note payable with
the related  party of the MPI seller in the amount of  $700,000,  with  interest
payments  of $6,000  per month for a period  of 24  months,  with the  remaining
principal and interest due and payable on the 24th month.  The sale required the
related party of the MPI seller to purchase an 80% controlling  interest in MPI.


                                       18
<PAGE>

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

The purchase price required the related party of the MPI seller to return to the
Company, seven million (7,000,000) shares of common stock previously received as
collateral for the  advances/note  payable,  the  assumption of all  liabilities
associated  with MPI, the assumption of the $700,000 note payable to MPI and the
new  issuance of two million  (2,000,000)  shares of common  stock.  The Company
recognized a loss of $240,000 on the sale of MPI.

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  Company  filed an  amendment  to its  Articles  of
Incorporation   increasing  its  authorized  capital   (100,000,000  common  and
10,000,000 preferred) and changed its name to ViaStar Media Corporation.

On  December  29,  2004,  the  Company  filed an  amendment  to its  Articles of
Incorporation   increasing  its  authorized  capital   (490,000,000  common  and
10,000,000 preferred) and changing its name to Pop3 Media Corp.


Results of Operations:

FOR THE THREE MONTHS ENDED  DECEMBER 31, 2004 COMPARED TO THE THREE MONTHS ENDED
DECEMBER 31, 2003

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.


Three months ended December 31, 2004

During  the  three  months  ended  December  31,  2004,  the  Company  generated
$1,056,437 in revenues  against  $368,530 in cost of sales  resulting in a gross
profit of $687,907.

Revenue from mastering was $ 481,212  comprising  46% of the Company's  revenue,
whereas  $471,807  comprising 45% of total revenue was from the  distribution of
music CD's. The remaining  $103,418 or 9% of the revenue was from  settlement of
accounts payable with one of the Distributor's Vendor accounts,  advertising and
rebates.  The CD distribution  recognized  superior gross margin of 99%, whereas


                                       19
<PAGE>

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

the  mastering  division  had a smaller  gross margin of 24%, as the total gross
profit of $687,907 was comprised of $117,724 from mastering and $570,183 from CD
sales.

Operating  costs of the mastering  business was $239,472  which was comprised of
$75,976 of payroll costs,  ($27,722) of bad debt,  $24,495 of insurance expense,
$57,113  in rent and  office  expenses,  $16,735  in  travel  costs,  $7,008  in
depreciation   expense  and  the   remaining   $85,867  in  other   general  and
administrative  expenses.  The  resulting  net loss from the  operations  of the
mastering business was $121,748.

Operating costs  attributable to the  distribution  business were $568,223 which
were comprised of $204,446 of payroll costs,  $102,486 in consulting,  legal and
other  professional  expenses,  $16,692 in rent and office  expenses,  $7,441 of
insurance  expense,  $4,056 in travel  expenses,  and the remaining  $233,102 in
other general and administrative and marketing expenses.  The resulting net gain
from the operations of the distribution business was $1,960.

Operating costs attributable to the corporate  administration and operation were
$223,652  which was  comprised  of  $89,735  of  payroll  expenses,  $81,989  in
consulting and legal services,  $16,692 in rent and office expenses,  $26,404 in
interest expense, and $35,236 in other general and administrative expenses.

As a  result  of the  foregoing  factors,  the  Company  incurred  a net loss of
$119,788 for the three months ended  December 31, 2004 compared to a net loss of
$1,226,096 for the same period ended December 31, 2003. The reduced loss was due
to an increase in gross profit with considerable  reduction in overhead expenses
compared to the previous  period.  This is largely  explained  by a  significant
increase in music CD sales for the current  period as well as 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 December 31, 2003.


Three months ended December 31, 2003


The  Company  generated  $213,000  in  revenues  and  $43,825  in cost of  sales
resulting in gross  profit of $169,175  from music sales during the three months
ended December 31, 2003.

Selling,  general and  administrative  expenses  were  $1,395,271.  Compensation
expense of $115,931  was pursuant to  employment  agreements.  Professional  and
consulting  fees  were  $504,418  which was  comprised  of a  $291,169  of which
$230,000 was comprised of marketing  costs  associated  with public and investor
relations  services  of the Company and its music  business,  and  approximately
$213,249 in professional  legal fees in association  with the Company's  defense
against Mr. Dadon and other  individuals  alleging  obligations  due to them and
authorized by prior management.  Depreciation expense was $588,977 and was based
upon the fair value of the assets that were obtained in the merger with Level X.
The Company uses the straight-line method of depreciation.

Interest expense, net of interest income was $100,000.

FOR THE SIX MONTHS  ENDED  DECEMBER  31, 2004  COMPARED TO THE SIX MONTHS  ENDED
DECEMBER 31, 2003

                                       20
<PAGE>

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

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.


Six months ended December 31, 2004

During the six months ended December 31, 2004, the Company generated  $1,629,982
in revenues  against  $702,846 in cost of sales  resulting  in a gross profit of
$927,136.

Revenue from mastering was $ 1,024,171  comprising 63% of the Company's  revenue
whereas  $485,970  comprising 30% of total revenue was from the  distribution of
music CD's. The remaining  $119,841 or 7% of the revenue was from  settlement of
accounts payable to one of the  Distributor's  Vendor accounts,  advertising and
rebates.  Distribution  recognized  superior  gross  margin of 99%,  whereas the
mastering  division had a smaller gross margin of 32%, as the total gross profit
of $927,136 was comprised of $339,406 from mastering and $587,730 from CD sales.

Operating costs of the mastering  business was $541,227,  which was comprised of
$178,103 of payroll costs,  ($23,811) of bad debt, $52,912 of insurance expense,
$113,708  in rent and  office  expenses,  $27,188  in travel  costs,  $14,016 in
depreciation   expense  and  the   remaining   $179,111  in  other  general  and
administrative  expenses.  The  resulting  net loss from the  operations  of the
mastering business was $201,820.

Operating costs attributable to the distribution business were $1,064,634, which
was  comprised  of  $393,439 of payroll  costs,  $170,974  in the  write-off  of
obsolete  inventory,  $145,150  in  consulting,  legal  and  other  professional
expenses,  $34,040 in rent and office  expenses,  $19,501 of insurance  expense,
$9,727 in travel  expenses,  and the  remaining  $291,803  in other  general and
administrative  and  marketing  expenses.   The  resulting  net  loss  from  the
operations of the distribution business was $303,784.

Operating costs attributable to the corporate  administration and operation were
$430,968,  which was  comprised  of  $184,231 of payroll  expenses,  $116,108 in
consulting and legal services,  $34,040 in rent and office expenses,  $24,946 in
interest expense, and $61,643 in other general and administrative expenses.

As a  result  of the  foregoing  factors,  the  Company  incurred  a net loss of
$678,725 for the six months ended  December 31, 2004 compared to $2,334,373  for
the same period ended December 31, 2003. The reduced loss was due to an increase
in gross profit with considerable reduction in overhead expenses compared to the
previous period. This is largely explained by a significant increase in music CD
sales for the current period as well as 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 six months ended December 31, 2003.

                                       21
<PAGE>

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

Six months ended December 31, 2003

The  Company  generated  $354,481  in  revenues  and  $109,096  in cost of sales
resulting  in gross  profit of  $245,385  from music and  publishing  operations
during the six months ended December 31, 2003. The business operations of Moving
Pictures  International where included in the consolidated  financial statements
of the Company for the time period that the Company held a controlling interest.

Selling,  general and  administrative  expenses  were  $2,219,787.  Compensation
expense of $166,735  was pursuant to  employment  agreements.  Professional  and
consulting  fees  were  $963,240  which  was  comprised  of a one  time  fee  of
approximately  $170,000  in  directors  compensation  due  to  the  issuance  of
restricted  common  stock of the Company to a director  which had been agreed to
and entered into with prior  management,  $325,000 in marketing costs associated
with  public  and  investor  relation  services  of the  Company  and its  music
business,  and approximately  $403,721 in professional legal fees in association
with the  Company's  defense  against Mr. Dadon and other  individuals  alleging
obligations due to them and authorized by prior management. Depreciation expense
was $964,237 and was based upon the fair value of the assets that were  obtained
in the  merger  with  Level X. The  Company  uses the  straight-line  method  of
depreciation.

Interest expense,  net of interest income was $19,971.  The Company recognized a
loss on sale of an 80% interest in Moving  Pictures  International  of $240,000.
The Company  believes the sale of a controlling  interest in MPI was in the best
interest of its  shareholders  and the Company's  business  operations as to the
potential and apparent  conflict in hours of operations  due to time zones,  the
economic  and  business  environment  in  which  Moving  Pictures  International
operates and the general  management  philosophy  of MPI.  Liquidity and Capital
Resources

During the six months ended  December 31, 2004,  the Company used  $424,555 from
its  operations  and  received  $50,000 from the sale of 1,000,000 of its common
shares and $300,000  from loan  proceeds.  The use of cash from  operations  was
primarily  caused from an increase of $264,263 in receivables and an increase of
$258,843 in outstanding liabilities.

The Company  financed the majority of its $678,725 loss from operations with the
issuance of  10,108,861  shares for services  valued at  $535,900.  The services
provided  were  comprised  of  $216,000  in  software  development,  $100,000 in
employee bonuses,  $146,000 in legal fees, $27,000 in finder fees and $46,900 in
business consulting fees.

Interest  expense of $6,250  was paid with the  issuance  of 200,000  restricted
shares.

At December  31,  2004 the  Company  had $87,605 of cash and working  capital of
($131,000).


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  $6,000,000 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.

                                       22
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations - 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  recapitalization  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 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 six months ended  December 31, 2003 and
December 31, 2004,  the Company  raised  capital  through the issuance of equity
securities  totaling  approximately  $200,000  and  $200,000  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 October 22, 2004, the Company  entered into a Securities  Purchase  Agreement
with  Montgomery  Equity  Partners,  Ltd.  Pursuant to the  Securities  Purchase
Agreement,  the Company shall issue convertible  debenturesto  Montgomery Equity
Partners,  Ltd. in the original principal amount of $500,000.  The $500,000 will
be  disbursed  as follows:  $250,000  was  disbursed  on  November  30, 2004 and
$250,000  shall be  disbursed  within five days of the filing of a  registration
statement  related to the shares  issueable upon  conversion of the  convertible
debentures. The debentures are convertible at the holder's option any time up to
maturity at a conversion price equal to the lower of (i) 120% of the closing bid
price  of the  common  stock on the  date of the  debentures  or (ii) 80% of the
lowest  closing  bid  price  of the  common  stock  for the  five  trading  days
immediately  preceding the  conversion  date.  The debentures are secured by the
assets of the Company.  The debentures  have a two-year term and accrue interest
at 7% per year. At maturity,  the  debentures  will  automatically  convert into
shares of common stock at a  conversion  price equal to the lower of (i) 120% of
the closing bid price of the common stock on the date of the  debentures or (ii)
80% of the lowest  closing bid price of the common  stock for five  trading days
immediately preceding the conversion date.

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

                                       23
<PAGE>

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

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.

On October 22,  2004,  the Company  entered into a Standby  Equity  Distribution
Agreement  with Cornell  Capital  Partners,  LP.  Pursuant to the Standby Equity
Distribution Agreement, the Company may, at its discretion, periodically sell to
Cornell Capital  Partners,  LP shares of common stock for a total purchase price
of up to $5.0  million.  For each  share of  common  stock  purchased  under the
Standby Equity Distribution Agreement,  Cornell Capital Partners LP will pay the
Company 95% of the lowest volume weighted  average price of the Company's common
stock as quoted by Bloomberg, LP on the Over-the-Counter Bulletin Board or other
principal  market on which the  Company's  common stock is traded for the 5 days
immediately  following the notice date.  Cornell Capital Partners,  LP will also
retain 5% of each  advance  under the  Standby  Equity  Distribution  Agreement.
Cornell Capital Partner's  obligation to purchase shares of the Company's common
stock  under the Standby  Equity  Distribution  Agreement  is subject to certain
conditions,  including the Company obtaining an effective registration statement
for shares of common stock sold under the Standby Equity Distribution  Agreement
and  is  limited  to  $500,000  per  weekly.  Pursuant  to  the  Standby  Equity
Distribution   Agreement  Cornell  Capital  Partners,  LP  received  a  one-time
commitment  fee equal to $140,000 of the  Company's  common stock on October 22,
2004.  The Company also paid  Newbridge  Securities  Corporation  a fee equal to
$10,000 of the Company's common stock based on the price of the Company's common
stock on October  22,  2004 under a placement  agent  agreement  relating to the
Standby Equity  Distribution  Agreement.  The Company  issued a total  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.

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.

                                       24
<PAGE>

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

None.

Item 5.   Legal Proceedings.

None.


Item 6.   Changes in Securities.

During the six months ended  December  31, 2004 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 $146,000
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 4,527,580 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  $216,000.  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.

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.

                                       25
<PAGE>

Item 6.   Changes in Securities - continued

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.

                                       26
<PAGE>

                           PART II - OTHER INFORMATION

Item 3. Defaults Upon Senior Securities.

None.


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

The Company  mailed a Form 14-C  Information  Statement to  shareholders  of the
Company on December 10, 2004 regarding an amendment of the Company's articles of
incorporation  to the change of the  Company's  name to PoP3 Media Corp.  and to
increase in the authorized shares of common stock to 490,000,000.  A majority of
the Company's  shareholders approved this amendment on December 5, 2004.

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.


(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



                                       27
<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 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              2/14/2005
 -------------------------------  Executive Officer
      John D. Aquilino            (principal executive officer)



 /s/ SAM MESSINA                  Interim Chief Financial Officer  2/14/2005
 -------------------------------  (principal financial and
       Sam Messina                accounting officer)


                                       28
<PAGE>