SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10-QSB/A
                                  AMENDMENT #2


     [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  No.                                                                 Page

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

        Condensed  Consolidated Balance Sheets December 31, 2004 and
          June 30, 2004 .................................................. 3-4

        Condensed Consolidated Statements of Operations Three Months
          Ended December 31, 2004 and December 31, 2003 .................... 5

        Condensed  Consolidated  Statements of Operations Six Months
          Ended December 31, 2004 and December 31, 2003 .................... 6

        Condensed  Consolidated  Statements of Cash Flows Six Months
          Ended December 31, 2004 and December 31, 2003 .................... 7

        Notes to Condensed  Consolidated  Financial  Statements ......... 7-18

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

Item 3. Controls and Procedures ........................................... 25

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

                          PART II - OTHER INFORMATION

Item 1. Legal Proceedings ................................................. 26

Item 2. Changes in Securities ............................................. 26

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

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

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

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

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


                                       2
<PAGE>

Item 1. Financial Statements

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

                                     ASSETS
<TABLE>
<CAPTION>


                                                       December 31,
                                                          2004           June 30,
                                                      (Unaudited)         2004
                                                     ------------    ------------
<S>                                                       <C>             <C>
CURRENT ASSETS
      Cash                                           $     87,605    $    116,628
      Accounts Receivable - Net                           917,168         635,795
      Prepaid Expense                                      80,000
      Other Receivables                                       998          18,108
      Inventory                                           861,168       1,032,142
                                                     ------------    ------------

      Total Current Assets                              1,946,939       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                                 80,000
      Deferred Income Tax Benefit                         279,430         279,430
      Artist Advances                                     253,973         114,647
      Other Assets                                         43,945          13,420
      Notes Receivable                                     92,013          92,013

                                                     ------------    ------------
      Total Long Term Assets                           14,360,299      14,212,823
                                                     ------------    ------------

TOTAL ASSETS                                         $ 16,307,238    $ 16,015,496
                                                     ============    ============

                                       3
<PAGE>

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

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                  LIABILITIES
Current Liabilities
      Accounts Payable and Accrued Expenses          $  1,530,843    $  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                                       2,310,856       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                                  20,479,131      19,892,278

      Retained Earnings/(Deficit)                      (6,572,039)     (5,650,635)
                                                     ------------    ------------

      Total Stockholders' Equity/(Deficit)             14,199,061      14,312,637
                                                     ------------    ------------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                                 $ 16,307,238    $ 16,015,496
                                                     ============    ============
</TABLE>

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    $      213,000.00
     Other Income                               103,418
                                      -----------------    -----------------

     Gross Income                             1,056,437              213,000

COST OF GOODS SOLD                              545,241               43,825
                                      -----------------    -----------------

     Gross Profit / (Loss)                      511,196              169,175
                                      -----------------    -----------------

EXPENSES

     Compensation                               280,422              115,931
     Professional and Consulting Fees           102,486              504,418
     General and Administrative                 378,330               82,573
     Depreciation                                75,571              588,977
     Write-Down Obsolete Inventory
     Loss on Investment
     Write off of Screenplay                                         100,000
     Interest Expense                            26,404                3,372
                                      -----------------    -----------------

     Total Expense                              863,213            1,395,271
                                      -----------------    -----------------

(LOSS) BEFORE INCOME TAXES                     (352,017)          (1,226,096)

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

NET (LOSS)                              $      (352,467)   $      (1,226,096)
                                      =================    =================

NET (LOSS) PER COMMON SHARE
                                        $         (0.01)   $           (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    $     354,481.00
      Other Income                                  119,841
                                          -----------------   -----------------

      Gross Income                              1,629,982               354,481

COST OF GOODS SOLD                                879,557               109,096
                                          -----------------   -----------------

      Gross Profit / (Loss)                         750,425             245,385
                                          -----------------   -----------------

EXPENSES
      Compensation                                  571,542             166,735
      Professional and Consulting Fees              145,150             963,240
      General and Administrative                    642,401             125,575
      Depreciation                                  131,142             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                               1,671,829           2,579,758
                                          -----------------   -----------------

(LOSS) BEFORE INCOME TAXES                         (921,404)         (2,334,373)

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

NET (LOSS)                                    $    (921,404)   $     (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

   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                321,899            727,000
            Common Stock to obtain financing         177,000
            Write-Off Obsolete Equipment              11,233              --
            Write-Off Screenplay Rights                                 100,000
            Business Development                    (120,000)
            Bad Debt Expense                                             20,049
            Depreciation Expense                     131,142            964,237
       Changes in assets and liabilities
            Receivables                             (264,263)          (271,813)
            Increase in Artist Advances             (139,326)
            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                            (80,000)
            Increase in Notes Payable                339,885
            Due Officers and Directors               (17,844)           (65,896)
             Increase in Accounts Payable            384,552            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 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,  for a total
value of $10,650,000. As a result, the revised agreement resulted in a change of
majority control.  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 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.

                                       8
<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


                                       9
<PAGE>

Note 1. OVERVIEW OF OPERATIONS AND ACCOUNTING POLICIES - continued

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.


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.

                                       10
<PAGE>

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
$6,572,039  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.

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


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.


                                       11
<PAGE>

Note 3. TRADE NAME AND DISTRIBUTION RIGHTS - continued

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
                                                    ==========   =============




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.


                                       12
<PAGE>

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 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 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.



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 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


                                       13
<PAGE>

Note 8. STOCKHOLDERS' EQUITY - continued

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,  for a total
value of $10,650,000. As a result, 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 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;
2,500,000  common shares to settle  $50,000 debt;  200,000 for payment of $6,050
interest; 12,372,651 common shares for services valued at $321,899 and 4,486,940
common shares valued at $150,000 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


                                       14
<PAGE>

Note 8. STOCKHOLDERS' EQUITY - continued

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.

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 ("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


                                       15
<PAGE>

Note 8. STOCKHOLDERS' EQUITY - continued

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, for a total value of $10,650,000. As a result, the revised agreement
resulted in a change of majority control.


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.



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
                                  =============    ===========

                                       16
<PAGE>

Note 9. INCOME TAXES - continued

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. 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

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.

                                       17
<PAGE>

Note 10. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS - continued

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.


                                       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") 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, for a total value of $10,650,000. As a result, the revised agreement
resulted in a change of majority control.

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
purchase of MPI. The purchase of MPI was an elaborate  brokered  transaction  by


                                       19
<PAGE>

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

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 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 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 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  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


                                       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 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 63%, whereas
the  mastering  division  had a smaller  gross margin of 24%, as the total gross
profit of $545,241 was comprised of $117,724 from mastering and $427,517 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 $624,191 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,  $25,968 in  production  costs,
$30,000 in amortized  business  development costs and the remaining  $233,102 in
other general and administrative and marketing expenses.  The resulting net loss
from the operations of the distribution business was $230,719.

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
$352,017 for the three months ended December 31, 2004 compared to $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.

                                       21
<PAGE>

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

Selling,  general and  administrative  expenses  were  $1,291,899.  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

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  three  months  ended  December  31,  2004,  the  Company  generated
$1,629,982  n 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 64%,  whereas the
mastering  division had a smaller gross margin of 32%, as the total gross profit
of $750,425 was comprised of $339,407 from mastering and $411,018 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 $957,482,  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,  $25,968 in production  costs,  $40,000 in amortized
business  development  costs and the  remaining  $118,683  in other  general and


                                       22
<PAGE>

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

administrative  and  marketing  expenses.   The  resulting  net  loss  from  the
operations of the distribution business was $719,584.

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
$921,404 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.

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  $559,519  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 $786,519 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.

                                       23
<PAGE>

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

The Company  financed the majority of its $921,404 loss from operations with the
issuance of  12,372,651  shares for services  valued at  $321,899.  The services
provided  were  comprised  of  $120,000  in  software  development,  $100,000 in
employee bonuses,  $80,000 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.

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  $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.

                                       24
<PAGE>

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

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.  On October 22, 2004,
Pop3 Media Corp.  (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.

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.

                                       25
<PAGE>

Item 3. Controls and Procedures - continued

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.


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

None.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.


Item 2. 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 $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.

                                       26
<PAGE>

Item 2. Changes in Securities - continued

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.

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.


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.


                                       27
<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              9/13/2005
 ---------------------------------   Executive Officer
      John D. Aquilino              (principal executive officer)



 /s/ SAM MESSINA                   Chief Financial Officer           9/13/2005
 --------------------------------- (principal financial and
     Sam Messina                   accounting officer)

                                       28
<PAGE>