UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-QSB/A1

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         For the Quarterly Period Ended

                               September 30, 1998


                         Commission File Number: 0-24005


                                UBARTER.COM INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Nevada                                           91-1739746
------------------------                          -----------------------------
(Place of Incorporation)                            (IRS Employer ID Number)



            21400 International Blvd. #207, Seattle, Washington 98198
           -----------------------------------------------------------
              (Address of registrant's principal executive office)

                                 (206) 870-9290
                         -------------------------------
                         (Registrant's telephone number)




Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ___


Number of Shares of Common Stock,  $0.001 Par Value  Outstanding at November 11,
1998 4,975,200




                                       1
<PAGE>


                           INTERNATIONAL BARTER CORP.
                              For the Quarter Ended
                               September 30, 1998
                             INDEX TO FORM 10-QSB/A1

<TABLE>

                                                                                                    Page
                                                                                                    ----
<S>                                                                                                  <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:

         Consolidated Balance Sheets:
         - September 30, 1998 and March 31, 1998.......................................................3

         Consolidated Statements of Operations:
         - For the Three Months and Six Months
           Ended September 30, 1998 and 1997...........................................................4

         Consolidated Statements of Cash Flow:
         - For the Six Months Ended
           September 30, 1998 and 1997.................................................................5

Notes to Consolidated Financial Statements ............................................................6

Item 2 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations...........................................................9

PART II - OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds.....................................................16

</TABLE>








                                       2

<PAGE>


                    INTERNATIONAL BARTER CORP. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                      September 30, 1998 and March 31, 1998


<TABLE>
                                                                                  September 30,        March 31,
                                                                                           1998             1998
                                                                                  -------------        ----------
                                     ASSETS
<S>                                                                                  <C>               <C>
CURRENT ASSETS
   Cash and cash equivalents                                                         $1,716,690        $ 382,564
   Accounts receivable, net of allowance for
     doubtful accounts of $3,102 and $1,956 for
     September 30, 1998 and March 31, 1998, respectively                                 52,498           63,259
   Notes receivable - current                                                             2,406            2,406
   Other current assets                                                                   1,163              571
                                                                                      ---------        ----------
       Total Current Assets                                                           1,772,757          448,800
                                                                                      ---------        ----------
PROPERTY AND EQUIPMENT, at cost, net of
   accumulated depreciation                                                              49,914           42,259
                                                                                      ---------        ----------
OTHER ASSETS
   Notes receivable - noncurrent                                                         26,898           32,791
   Prepaid advertising                                                                  147,900                -
   Other assets                                                                           8,700            1,200
                                                                                      ---------        ----------
       Total Other Assets                                                               183,498           33,991
                                                                                      ---------        ----------
                                                                                     $2,006,169        $ 525,050
                                                                                      =========        ==========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable                                                                  $   35,058        $   9,274
   Trade Dollars issued in excess of earned                                              98,765            5,439
   Current portion of long-term debt                                                     11,387           13,074
   Other current liabilities                                                             12,464            7,683
                                                                                      ---------        ----------
       Total Current Liabilities                                                        157,674           35,470
                                                                                      ---------        ----------
LONG-TERM DEBT                                                                           11,845           19,097
                                                                                      ---------        ----------
STOCKHOLDERS' EQUITY
   Common  stock,  $.001 par value;  authorized  25,000,000  shares;  issued and
     outstanding  4,883,200 shares and 3,832,900 shares as of September 30, 1998
     and March 31,
     1998, respectively                                                                   4,883            3,833
   Additional paid-in capital                                                         1,196,518          540,618
   Subscribed shares, 800,000 shares and 195,000 shares (giving effect to stock
     split) as of September 30, 1998 and March 31, 1998, respectively                 1,000,000           37,500

   Accumulated deficit                                                                 (364,751)        (111,468)
       Total Stockholders'  Equity                                                    1,836,650          470,483
                                                                                      ---------        ----------
                                                                                     $2,006,169        $ 525,050
                                                                                      =========        ==========

</TABLE>


        The accompanying notes are an integral part of these consolidated
                             financial statements.



                                       3
<PAGE>


                    INTERNATIONAL BARTER CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
           For the Three Months Ended September 30, 1998 and 1997 and
                the Six Months Ended September 30, 1998 and 1997

<TABLE>
                                                            Three            Three         Six              Six
                                                            Months          Months      Months            Months
                                                           9-30-98         9-30-97     9-30-98          9-30-97
                                                           -------         -------     -------          -------
<S>                                                      <C>             <C>          <C>              <C>
REVENUE                                                  $ 124,745       $ 166,799    $ 273,256        $ 327,485
COST OF SALES                                               17,002          19,947       34,168           66,836
                                                         ---------       ---------    ---------        ---------
       Gross Profit                                        107,743         146,852      239,088          260,649
                                                         ---------       ---------    ---------        ---------
OPERATING EXPENSES
   Selling, general and administrative                     380,156         128,589      503,472          268,239
   Depreciation                                              3,201           2,270        5,859            4,540
                                                         ---------       ---------    ---------        ---------
     Total Operating Expenses                              383,357         130,859      509,331          272,779
                                                         ---------       ---------    ---------        ---------
Income (Loss) from Operations                             (275,614)         15,993     (270,243)         (12,130)
                                                         ---------       ---------    ---------        ---------
OTHER INCOME (EXPENSE)
   Interest income                                          14,091           1,779       18,330            3,555
   Interest expense                                           (525)         (1,230)      (1,961)          (2,527)
                                                         ---------       ---------    ---------        ---------
     Total Other Income (Expense)-net                       13,566             549       16,369            1,028
                                                         ---------       ---------    ---------        ---------
Net Income (Loss) Before Income Taxes                     (262,048)         16,542     (253,874)         (11,102)
Income Tax Expense (Benefit)                                     -               -         (591)               -
                                                         ---------       ---------    ---------        ---------

Net Income (Loss)                                        $(262,048)      $  16,542    $(253,283)       $ (11,102)
                                                         =========       =========    =========        =========
Average Common and Equivalent Shares:
   Basic                                                 5,683,200       1,550,000    5,227,367        1,550,000
                                                         =========       =========    =========        =========
   Diluted                                               5,683,200       1,550,000    5,227,367        1,550,000
                                                         =========       =========    =========        =========
Net Income (Loss) Per Common Share:
   Basic                                                 $    (.05)      $     .01     $   (.05)       $    (.01)
                                                         =========       =========    =========        =========
   Diluted                                               $    (.05)      $     .01     $   (.05)       $    (.01)
                                                         =========       =========    =========        =========

Giving Effect to Stock Split:
Average Common and Equivalent Shares:
   Basic                                                                 3,100,000                     3,100,000
                                                                         =========                     =========
   Diluted                                                               3,100,000                     3,100,000
                                                                         =========                     =========
Net Income (Loss) Per Common Share:
   Basic                                                                 $     .00                     $    (.00)
                                                                         =========                     =========
   Diluted                                                               $     .00                     $    (.00)
                                                                         =========                     =========
</TABLE>


               The accompanying notes are an integral part of these consolidated
                             financial statements.


                                       4
<PAGE>


                    INTERNATIONAL BARTER CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Six Months Ended September 30, 1998 and 1997


<TABLE>
                                                                                  1998                1997
                                                                              ----------            ---------
<S>                                                                           <C>                  <C>
CASH USED IN OPERATING ACTIVITIES:
Net loss                                                                      $ (253,283)          $ (11,102)
Adjustments to reconcile net loss to cash
   provided by operating activities:
     Depreciation                                                                  5,859               4,540
     Non-cash charges related to stock option grants                             112,500
     Bad debts                                                                     1,146                   -
     Deferred income taxes                                                          (591)               (351)
     Net trade revenue earned over (under) trade costs                           (42,074)            (31,151)
Changes in operating assets and liabilities:
   Accounts receivable                                                             9,615              (1,802)
   Contracts receivable                                                            5,892                 240
   Prepaids and other assets                                                     (20,000)                  -
   Accounts payable and other liabilities                                         30,565               1,555
                                                                              ----------            ---------
       Net Cash Used by Operating Activities                                    (150,371)            (38,071)
                                                                              ----------            ---------
CASH USED IN INVESTING ACTIVITIES:

Acquisition of property and equipment                                            (13,514)            (20,358)
                                                                              ----------            ---------
       Net Cash Used by Investing Activities                                     (13,514)            (20,358)
                                                                              ----------            ---------
CASH PROVIDED BY FINANCING
   ACTIVITIES:
   Proceeds from sale of common stock                                          1,506,950                   -
   Repayment of notes payable                                                     (8,939)            (13,167)
                                                                              ----------            ---------
     Net Cash Provided by Financing Activities                                 1,498,011             (13,167)
                                                                              ----------            ---------
   Net Increase (Decrease) in Cash                                             1,334,126             (71,596)
   Cash at Beginning of Period                                                   382,564             162,327
                                                                              ----------            ---------
   Cash at End of Period                                                      $1,716,690           $  90,731
                                                                              ==========            =========
SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid for interest                                                     $    1,961           $   2,452
   Cash paid for income taxes                                                          -                   -

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Prepaid advertising and scrip acquired for IBC Trade Dollars                  $  135,400           $       -

</TABLE>



            The  accompanying  notes are an integral part of these  consolidated
                             financial statements.


                                       5
<PAGE>


                    INTERNATIONAL BARTER CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 - BASIS OF PRESENTATION

The  financial   information  included  herein  is  unaudited;   however,   such
information  reflects all  adjustments  (consisting  solely of normal  recurring
adjustments)  which are,  in the  opinion of  management,  necessary  for a fair
statement of results for the interim periods.

The results of  operations  for the  three-month  and  six-month  periods  ended
September 30, 1998 and 1997 are not necessarily  indicative of the results to be
expected  for the full  year.  The Notes to  Consolidated  Financial  Statements
included in the Company's  March 31, 1998  registration  statement on Form 10-SB
should be read in conjunction with these consolidated financial statements.

2 - TRADE DOLLARS

At September  30, 1998,  the Company had  expended  98,765 IBC Trade  Dollars in
excess of the amount of Trade Dollars earned by the Company.  At March 31, 1998,
the  Company  had  expended  5,439 IBC Trade  Dollars in excess of the amount of
Trade Dollars earned by the Company.  This situation is commonly  referred to in
the commercial  barter  industry as a "negative  trade  balance".  Trade Dollars
expended in excess of earned by the  Company is provided  for in the IBC Trading
Rules that  govern the  Exchange.  Such  provisions  allow the Company to expend
Trade Dollars in excess of earned within certain guideline amounts.  The Company
would be ultimately obligated to provide goods and services for sale to Exchange
members to offset any amounts of Trade Dollars expended in excess of earned.

3 - CAPITAL STOCK

In July of 1998, the Company received cash for common stock and warrants through
a private  placement  whereby,  800,000 units were sold at $1.25 per unit.  Each
unit consists of one share of common stock and one warrant  exercisable at $1.50
per share.  The warrants  expire June 20, 2000.  As of September  30, 1998,  the
shares were  unissued and thereby  classified as  subscribed  stock.  During the
quarter  ended  September  30,  1998,  195,000  shares  of  previously  unissued
(subscribed)  shares were issued.  Additionally,  warrants  were  exercised  for
649,200 common shares for which the Company received proceeds of $356,300.

On July 9, 1998, the Board of Directors  passed a resolution for a 2-for-1 stock
split (split) of the Company's common stock to be distributed to shareholders of
record  after the close of market on July 24,  1998.  As a result of the  split,
$2,020 was  reclassified  from the "additional  paid-in  capital" account to the
"common stock" account.

4 - INCOME (LOSS) PER SHARE

During the current  fiscal year,  the Company  adopted FASB  Statement  No. 128,
Earnings Per Share.  Statement 128 requires  presentation  of basic earnings per
share and  diluted  earnings  per  share.  Basic  earnings  per  share  excludes
potential  dilution  and is  computed  by dividing  income  available  to common
stockholders by the weighted-average number of common shares outstanding for the
period.  Diluted  earnings per share reflects the potential  dilution that could
occur if securities or other  contracts to issue common stock were  exercised or
converted  into common  stock or resulted in the  issuance of common  stock that
then  shared  in the  earnings  of the  entity.  Diluted  earnings  per share is
computed  similarly to fully diluted earnings per share under previous generally
accepted accounting principles in the United States. All prior year earnings per
share  data  are  restated  to  conform  with   Statement  128  for   consistent
presentation of all years.



                                       6
<PAGE>


                   INTERNATIONAL BARTER CORP. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4 - INCOME (LOSS) PER SHARE (Continued)

As explained  above, on July 9, 1998, the Board of Directors passed a resolution
for a 2-for-1 stock split of the  Company's  common stock to be  distributed  to
shareholders  of record after the close of market on July 24, 1998.  In order to
properly  reflect  earnings per share on a  prospective  basis,  the Company has
provided  earnings per share  disclosures  assuming the stock split had occurred
retroactively,  along with the earnings per share  disclosures based upon actual
shares  outstanding  as of  September  30, 1997 and for the three and six months
ended September 30, 1997.

Following, is a reconciliation of the numerators of the basic and diluted income
(loss) per share for the three months ended  September 30, 1998 and 1997 and the
six months ended September 30, 1998 and 1997:

<TABLE>
                                                             Three           Three          Six              Six
                                                            Months          Months       Months           Months
                                                           9-30-98         9-30-97      9-30-98          9-30-97
                                                         ---------       ---------    ---------        ---------
<S>                                                     <C>             <C>          <C>              <C>
Net income (loss) available to
common shareholders                                     $ (262,048)     $   16,542   $ (253,283)      $  (11,102)
                                                         =========       =========    =========       ==========

Weighted average shares                                  5,683,200       1,550,000    5,227,367        1,550,000
Effect of dilutive securities
  Warrants and options                                           -               -            -                -
                                                         ---------       ---------    ---------        ---------
                                                         5,683,200       1,550,000    5,227,367        1,550,000
                                                         =========       =========    =========       ==========
Basic income (loss) per share (based on
   weighted average shares)                             $    (.05)      $      .01   $     (.05)      $     (.01)
                                                         =========       =========    =========       ==========
Diluted income (loss) per share                         $    (.05)      $      .01   $     (.05)      $     (.01)
                                                         =========       =========    =========       ==========

Giving Effect to Stock Split:
Weighted average shares                                                  1,550,000                     1,550,000
Effect of dilutive securities
  Warrants and options                                                           -                             -
                                                                         ---------                     ---------
                                                                         1,550,000                     1,550,000
                                                                         =========                     =========
Basic income (loss) per share (based on
   weighted average shares and giving effect to stock split)            $      .00                    $     (.00)
                                                                        ==========                    ==========
Diluted income (loss) per share (giving effect to stock split)          $      .00                    $     (.00)
                                                                        ==========                    ==========
</TABLE>


5 -  REVENUE

The  following  table  summarizes  the cash and trade  (consisting  of IBC Trade
Dollars) components of revenue for the three months ended September 30, 1998 and
1997 and the six months ended September 30, 1998 and 1997:

<TABLE>
                                                             Three           Three          Six              Six
                                                            Months          Months       Months           Months
                                                           9-30-98         9-30-97      9-30-98          9-30-97
                                                         ---------       ---------    ---------        ---------
<S>                                                     <C>             <C>          <C>              <C>
Trade                                                     $ 62,149       $  79,208     $134,546         $148,597
Cash                                                        62,596          87,591      138,710          178,888
                                                         ---------       ---------    ---------        ---------
                                                          $124,745        $166,799     $273,256         $327,485
                                                         =========       =========    =========       ==========
</TABLE>




                                       7
<PAGE>



                    INTERNATIONAL BARTER CORP. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


6 - STOCK OPTION PLAN

The Company  adopted a Stock  Option Plan ("the  Plan")  effective  June 1, 1998
whereby,  non-qualified  and incentive stock options for up to 20% of the shares
of common stock outstanding may be granted to Directors, Officers, Employees and
Consultants.  Options granted under the Plan are not to have a life in excess of
five  years  from the date of grant and vest 50% after 12  months,  75% after 18
months,  100% after 24 months from the date of grant. The provisions of the Plan
allow the administrators to determine the vesting period of options granted.

In August of 1998,  the Company  granted  options to purchase  40,000  shares of
common stock at an exercise price of $.082 per share to an employee. The options
are fully vested and expire five years from the date of grant.
The options were valued at $112,500.

7 - SUBSEQUENT EVENTS

A brokerage  account was opened and funded for the sole purpose of  repurchasing
up to  250,000  shares of the  Company's  common  stock in the open  market.  In
October of 1998, 10,900 shares were repurchased for $13,011.

8 - RESTATEMENT

The  Company  has  restated  its  financial  statements  for the  periods  ended
September 30, 1998 due to the recognition of stock-based  compensation  costs in
the amount of $112,500.








                                       8
<PAGE>

           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

The following is  management's  discussion  and analysis of certain  significant
factors  which have  affected the  Company's  financial  position and  operating
results during the periods included in the accompanying  consolidated  financial
statements.

RESULTS OF OPERATIONS:

Three  Months  Ended  September  30,  1998  compared to the Three  Months  Ended
September 30, 1997:

Overall Operating Results

Revenues are generally  derived from  transaction  fees charged (cash and trade)
based upon a percentage  of the dollar  amount of client  trades.  Total revenue
decreased 25% to $124,745 in the second  quarter of fiscal 1998 from $166,799 in
the second quarter of fiscal 1997. The Company had a net loss from operations of
$275,614 in the second  quarter of fiscal 1998 and a net income from  operations
of $15,993 in the second quarter of 1997.

 The  Company's  gross  margin  decreased  to a gross  profit of $107,743 in the
second  quarter of 1998 from $146,852 in the second  quarter of fiscal  1997.The
gross margin in the second quarter of fiscal 1998 was  approximately the same as
the gross  margin in the  second  quarter  of fiscal  1997.  The  Company  sells
inventory on  consignment  from its  showroom.  In the second  quarter of fiscal
1997, the Company focused on selling all of its showroom inventories and did not
rebuild them in fiscal  1998.  There was  therefore,  a decrease in revenue from
sales of showroom inventory from fiscal 1997 to 1998.

The Company reported a net loss of $262,048,  or $(0.05) per share in the second
quarter of fiscal  1998 and a net income of $16,542,  or $0.01 per share  ($0.00
per share assuming stock-split) in the second quarter of fiscal 1997.

Revenue

Total Revenue.  Total revenue decreased 25% to $124,745 in the second quarter of
fiscal 1998 from $166,799 in the second quarter of fiscal 1997. Following,  is a
summary of the components of revenue for the second  quarters of fiscal 1998 and
1997:

                                                1998                 1997
                                              --------             -------
Trade                                        $  62,149            $ 79,208
Cash                                            62,596              87,591
                                              --------             -------
                                             $ 124,745            $166,799
                                               =======             =======

Trade  Exchange  Revenue.  In the second  quarter of fiscal 1998,  the Company's
revenue from its core retail trade exchange business was $124,745, down from the
revenue in the second quarter of fiscal 1997. The Company focused on selling all
of its showroom  inventories  in the second  quarter of 1997 and did not rebuild
its inventories in the second quarter of 1998.  Total revenues  decreased in the
second  quarter of fiscal  1998 from the second  quarter of fiscal 1997 due to a
planned decrease in showroom inventories.




                                       9
<PAGE>


           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (Continued)

Costs, Expenses and Gross Margins

Costs of Trade Exchange  Revenue.  Costs of trade exchange revenue  decreased to
$17,002 in the second  quarter of fiscal 1998 from $19,947 in the second quarter
of fiscal 1997. The gross margin from trade exchange  operations was $107,743 in
the second  quarter of fiscal 1998 as compared to $146,852 in the second quarter
of fiscal  1997.  Costs of trade  exchange  revenue  were 14% of trade  exchange
revenue in the second  quarter of fiscal  1998 and 12% in the second  quarter of
fiscal 1997.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative expenses (including  depreciation) increased from $130,859 in the
second  quarter of fiscal 1997 as compared to $383,357 in the second  quarter of
fiscal 1998. The increase was primarily attributable to the following factors:

(a)  Significant resources were devoted in the second quarter to the development
     of the  "Ubarter"  internet  site.  The Company plans to invest much of its
     available  resources  into the  future  development  of Ubarter in order to
     attract a significant share of the related internet commerce market.

(b)  Salaries  increased  due to the  addition  of several  key  personnel.  Two
     full-time  employees were hired to work primarily on the future development
     of Ubarter.  A chief financial  officer was hired to fill a new position in
     the Company and two new brokers and an Executive Assistant were also hired.

(c)  Additional  costs in the second  quarter of 1998 which were not incurred in
     the  second  quarter  of 1997,  included  such  items as  legal  and  other
     professional  fees for  assistance  with  filings,  regulatory  matters and
     strategic  development,  and increased telephone costs. Another significant
     non-cash  expense in the second quarter of 1998 related to the  recognition
     of stock-based compensation as a result of the issuance of stock options to
     an employee in the amount of $112,500  which was recognized as an operating
     expense.

One of the  advantages  available to barter  businesses  is the ability to pay a
significant  portion of its operating costs such as graphic design,  advertising
and printing using Trade Dollars.  The accumulated deficit at September 30, 1998
was $98,765, compared to $5,439 at March 31, 1998.

Six Months Ended  September 30, 1998 compared to the Six Months Ended  September
30, 1997:

Overall Operating Results

Revenue  decreased 17% to $273,256 in the first two quarters of fiscal 1998 from
$327,485 in the first two  quarters of fiscal  1997.  The Company had a net loss
from  operations  of $270,243 in the first two quarters of fiscal 1998 and a net
loss from operations of $12,130 in the first two quarters of 1997. The Company's
gross  margin  decreased to a gross profit of $239,088 in the first two quarters
of 1998 from $260,649 in the first two quarters of fiscal 1997.

The gross margin in the first two  quarters of fiscal 1998 was  slightly  higher
than the gross  margin in the first two  quarters  of fiscal  1997.  The Company
sells inventory on consignment  from its showroom.  In the first two quarters of
fiscal 1997, the Company focused on selling all of its showroom  inventories and
did not rebuild them in fiscal 1998. There was therefore,  a decrease in revenue
from sales of  showroom  inventory  from  fiscal  1997 to 1998.  Since the gross
profit on sales of  showroom  inventory  is much lower than from other  types of
revenues,  the gross margin was higher in the first two quarters of 1998 than it
was in the first two quarters of 1997.

The Company  reported a net loss of $253,283,  or $(0.05) per share in the first
two  quarters  of fiscal  1998 and a net loss of  $11,102,  or $(0.01) per share
($0.00 per share assuming stock-split) in the first two quarters of fiscal 1997.


                                       10
<PAGE>


           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (Continued)


Revenue

Total Revenue. Total revenue decreased 17% to $273,256 in the first two quarters
of  fiscal  1998  from  $327,485  in the first  two  quarters  of  fiscal  1997.
Following,  is a summary of the components of revenue for the first two quarters
of fiscal 1998 and 1997:

                                               1998                1997
                                              -------             -------
Trade                                        $134,546             $148,597
Cash                                          138,710             178,888
                                              -------             -------
                                             $273,256            $327,485
                                              =======             =======

Trade Exchange Revenue.  In the first two quarters of fiscal 1998, the Company's
revenue from its core retail trade exchange business was $273,256, down from the
revenue in the first two quarters of fiscal 1997. The Company focused on selling
all of its  showroom  inventories  in the first two quarters of 1997 and did not
rebuild  its  inventories  in the first two  quarters  of 1998.  Total  revenues
decreased  in the first two  quarters of fiscal 1998 from the first two quarters
of fiscal 1997 due to a planned  decrease in revenues  from the sale of showroom
inventories.

Costs, Expenses and Gross Margins

Costs of Trade Exchange  Revenue.  Costs of trade exchange revenue  decreased to
$34,168 in the first two  quarters of fiscal 1998 from  $66,836 in the first two
quarters of fiscal 1997.  The gross margin from trade  exchange  operations  was
$239,088 in the first two quarters of fiscal 1998 as compared to $260,649 in the
first two quarters of fiscal 1997.  Costs of trade exchange  revenue were 13% of
trade  exchange  revenue in the first two quarters of fiscal 1998 and 20% in the
first two quarters of fiscal 1997. The reduced 1998 gross margin is attributable
to the  sale of  inventory  on  consignment  from  the  Company's  showroom,  as
discussed above.  Since the gross profit on sales of showroom  inventory is much
lower  than from other  types of  revenues,  the gross  margin was higher in the
first two quarters of 1998 than it was in the first two quarters of 1997.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative expenses (including  depreciation) increased from $272,779 in the
first two  quarters  of fiscal  1997 as  compared  to  $509,331 in the first two
quarters  of  fiscal  1998.  The  increase  was  primarily  attributable  to the
following factors:

(a)  Significant resources were devoted in the second quarter to the development
     of the  "Ubarter"  internet  site.  The Company plans to invest much of its
     available  resources  into the  future  development  of Ubarter in order to
     attract a significant share of the related internet commerce market.

(b)  Salaries  increased  due  to the  addition  of  several  key  personnel.  A
     full-time employee was hired to work primarily on the future development of
     Ubarter.  A chief financial officer was hired to fill a new position in the
     Company and two new brokers and an Executive Assistant were also hired.

(c)  Additional costs in the first two quarters of 1998, which were not incurred
     in the first two quarters of 1997,  included  such items as legal and other
     professional  fees for  assistance  with  filings,  regulatory  matters and
     strategic  development,  and increased telephone costs. Another significant
     non-cash  expense  in  the  first  two  quarters  of  1998  related  to the
     recognition  of  stock-based  compensation  as a result of the  issuance of
     stock options to an employee in the amount of $112,500 which was recognized
     as an operating expense.

One of the  advantages  available to barter  businesses  is the ability to pay a
significant  portion of its operating costs such as graphic design,  advertising
and printing using Trade Dollars.  The accumulated deficit at September 30, 1998
was $98,765, compared to $5,439 at March 31, 1998.



                                       11
<PAGE>


           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (Continued)


LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1998, the Company's  working capital was  $1,615,083,  based on
current assets of $1,772,757 and current liabilities of $157,674.  The Company's
working  capital ratio at March 31, 1998, was $413,330,  based on current assets
of $448,800  and current  liabilities  of $35,470.  The  improvement  in working
capital resulted primarily from the following factor:

(a)  An increase in the Company's cash to $1,716,690 at September 30, 1998, from
     $382,564 at March 31, 1998.  This was  primarily  attributable  to proceeds
     from a private  placement  of its  common  stock  from  which  the  Company
     received net proceeds of $1,000,000  and the exercise of warrants for which
     the Company received net proceeds of $356,300.

Total  stockholders'  equity increased to $1,836,650 at September 30, 1998, from
$470,483 at March 31, 1998.  This  increase was  primarily  attributable  to the
following factor:

(a)  Cash of $1,498,011 provided by the financing activities of the Company.

During the first two  quarters of 1998,  the Company  reported  net cash used in
operations of $150,371 in the statement of cash flows,  as compared to cash used
in operations of $38,071 in the first two quarters of 1997. The decrease in cash
used  in  operations  was  primarily  attributable  to  increased  salaries  and
development  costs in the first two quarters of 1998 over the first two quarters
of 1997.









                                       12

<PAGE>


           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (Continued)


Development Activities

 Ubarter.  "Ubarter.com"  (Ubarter) is an internet website for electronic barter
trading that was launched by the Company on July 20, 1998. The software,  was at
that time,  largely  in the  development  stage and had  design  flaws that made
transacting trades somewhat  cumbersome for the user. As a result,  registration
was moderate and the project got off to a slow start.  On September 9, 1998,  an
updated version was released with major  improvements and gave the website a new
"look and feel".  The Company intends to invest much of its available  resources
into the future  development of Ubarter in order to attract a significant  share
of the related internet commerce market.

The Company expects to experience  negative cash flow and operating  losses from
its investment of working  capital during the  development  period,  after which
positive cash flow and  profitability is expected.  Two full time personnel have
been hired by the Company to work almost  exclusively on the future  development
of  Ubarter.  The market  focus of Ubarter is to draw  customers  who  presently
engage in traditional  barter  transactions and to attract new customers who may
be  unfamiliar  with the  barter  concept  but  routinely  engage in  electronic
commerce.  The  ultimate  goal of Ubarter  is to  provide a  central,  worldwide
clearinghouse  for  electronic  barter  transactions.  However,  there can be no
assurance that adequate funds from  operations or investors will be available to
successfully complete the project as planned.

Trade  Exchange  Acquisitions.  The Company also  intends to devote  significant
financial  and  human  resources  to a  strategic  plan  of  acquiring  existing
profitable  barter trade  exchanges in the United  States and in other  selected
countries  throughout the world. Such acquisitions could result in negative cash
flows and operating  losses  initially but are expected to provide positive cash
flows and increase the overall profitability of the Company.  However, there can
be no assurance  that adequate funds will be available to  successfully  acquire
additional barter trade exchanges as planned.

Discussion of the Year 2000 Issue

Background.  Many  computer  programs  have been written using two digits rather
than four to identify the year. Any computer  programs that have  date-sensitive
software  may  recognize a date using "00" as the year 1900 rather than the year
2000.  This  could  result  in  a  system  failure  or  miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to process  transactions,  send invoices,  or engage in similar normal  business
activities. This situation is commonly referred as "Y2K".

Scope and Impact of Y2K on the Company.

The Company utilizes both proprietary  software and software provided by outside
vendors  which may be  impacted by the Y2K  problem.  The  operation  of the IBC
Retail Trade Exchange is dependent  upon the proper  functioning of its computer
software.  Management has assessed the potential  impact of the Y2K issue on the
Company  and does  not  believe  that  the  Company's  business,  operations  or
financial  condition will be materially  impacted by the Y2K issue as it relates
to  the  Company's  proprietary  software.  Furthermore,  it  is  expected  that
potential  impact of third parties'  failure would not have a material impact on
the Company's business, operations or financial condition.









                                       13
<PAGE>


           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (Continued)


Remediation plans. The Company's software vendor has begun  reprogramming of its
proprietary software which is approximately 40% completed. The remaining portion
is mainly  related to a small  segment of data fields.  The Company  anticipates
that the project will be completed  sometime in the first  quarter of 1999.  The
cost  of  such  reprogramming  is not  material  and is not  expected  to have a
material  effect on the Company's  results of  operations  when  incurred.  With
respect to software  supplied by third parties,  the Company has determined that
such software is already Y2K compliant or will be compliant well before the year
2000 or, alternatively,  that any such software will be replaced at a cost which
is not material to the Company's results of operations.

Uncertainties  and  Contingencies.  The  Company  presently  believes  that with
modifications  to existing  software and  conversions  to new software,  the Y2K
issue can be mitigated.  However,  even if such modifications or conversions are
not made,  or are not  completed  timely,  the Company would be able to continue
operations  manually.  This would result in more  cumbersome  and less efficient
operations  but is not  expected  to have a  material  effect  on the  Company's
business, operations or financial condition.

However, there is no guarantee that the software of other companies on which the
Company's software relies will be timely converted, or that a failure to convert
by another  company,  or a conversion  that is  incompatible  with the Company's
systems,  would  not have a  material  adverse  effect  on the  Company  and its
operations.

The  materiality  of the costs of becoming Y2K compliant and the date upon which
the  Company  plans  to  complete  the  Year  2000  modifications  are  based on
management's best estimates,  which were derived utilizing numerous  assumptions
of future  events  including the continued  availability  of certain  resources,
third  party  modification  plans and other  factors.  However,  there can be no
guarantee that these  estimates will be achieved and actual results could differ
from those plans.  Specific factors that might cause such  differences  include,
but are not limited to, the availability  and cost of personnel  trained in this
area, the ability to locate and correct all relevant computer codes, and similar
uncertainties.


Forward Looking Information

Except  for  disclosures  that  report the  Company's  historical  results,  the
statements set forth in this section contain forward-looking  statements.  Words
or phrases  "will likely  result",  "are  expected  to",  "will  continue",  "is
anticipated",  "estimate",  "project or projected",  or similar  expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private Securities Litigation Reform Act of 1995 (the Reform Act).

Actual results could differ  materially form those projected in  forward-looking
statements.  Additional  information and factors that could cause actual results
to differ materially from those in the forward-looking  statements are set forth
in this Form 10-QSB, and in the section entitled "Risk Factors" in the Company's
Form 10-SB on file with the  Securities  and  Exchange  Commission.  The Company
desires  to take  advantage  of certain  provisions  in the  Private  Securities
Litigation  Reform Act of 1995, that provided a safe harbor for  forward-looking
statements  made by or on behalf of the  Company.  The Company  hereby  cautions
stockholders,  prospective  investors in the Company,  and other  readers to not
place undue reliance on these forward-looking statements, which can only address
known events as of the date of this report.




                                       14

<PAGE>


           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (Continued)


Investors  should also be aware of factors that could have a negative  impact on
the Company's  prospects and the consistency of progress in the areas of revenue
generation,  liquidity,  and generation of capital resources.  These include: 1)
variations  in the mix of  revenues,  2)  possible  inability  of the Company to
attract investors for its investor  securities or otherwise raise adequate funds
from any source,  3) increased  governmental  regulation of the barter industry,
and 4) a decrease in the cash fees and commissions realized by the Company based
upon a substantial decrease in retail trade exchange transactions.


Inflation

The  Company's  results of  operations  have not been  affected by inflation and
management  does  not  expect  inflation  to have a  significant  effect  on its
operations in the future.

















                                       15


<PAGE>


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereto duly authorized.

UBARTER.COM INC.
----------------
(Registrant)



Date: September 20, 1999

/s/ Steven White
------------------------------------
Steven White, Chairman of the Board of Directors,
President and Chief Executive Officer
(principal executive officer and director)


Date: September 20, 1999

/s/ Kevin R. Andersen
------------------------------------
Kevin R. Andersen, Chief Financial Officer
(principal accounting officer)