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

                                   FORM 10-QSB

[X] Quarterly  Report under Section 13 or 15(d) of the Securities  Exchange
    Act of 1934 for the quarter ended June 30, 1999.

[ ] Transaction  Report under  Section 13 or 15(d) of  the Exchange Act for the
    transaction period from ___________ to ____________.

                       -----------------------------------
                         Commission file number 0-24005
                       -----------------------------------

                                UBARTER.COM INC.
        (Exact name of small business issuer as specified in its charter)


         NEVADA                                              91-1739746
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)


                         21400 International Blvd. #207
                                Seattle, WA 98198
                    (Address of principal executive offices)
                       -----------------------------------
                                 (206) 870-9290
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 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   [ ]


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date:  5,946,400 shares of Common Stock as
of August 6, 1999.



<PAGE>


                                UBARTER.COM INC.
                              For the Quarter Ended
                                  June 30, 1999

                              INDEX TO FORM 10-QSB

<TABLE>

                                                                                                    Page
<S>                                                                                                 <C>
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements:

         Balance Sheets:
         June 30, 1999 and March 31, 1999..............................................................3

         Statements of Operations:
         For the Three Months Ended
         June 30, 1999 and 1998........................................................................4

         Statements of Cash Flow:
         For the Three Months Ended
         June 30, 1999 and 1998........................................................................5

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

Item 2 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations...........................................................8

PART II - OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds.....................................................23

Item 6.  Exhibits and Reports on Form 8-K.............................................................23

SIGNATURES ...........................................................................................24

</TABLE>















<PAGE>


Part I   -  FINANCIAL INFORMATION

Item 1.  Financial Statements


                                UBARTER.COM INC.
                           CONSOLIDATED BALANCE SHEET
                        JUNE 30, 1999 AND MARCH 31, 1999

                                     ASSETS

<TABLE>
                                                                 1999             1998
                                                            -------------   --------------
CURRENT ASSETS                                               (Unaudited)
<S>                                                           <C>              <C>
    Cash and cash equivalents                                 $  115,900       $  442,700
    Accounts receivable, net                                     289,400          305,700
    Inventory                                                    320,400          310,400
    Other current assets                                          40,800            9,200
                                                            -------------   --------------
          Total current assets                                   766,500        1,068,000
                                                            -------------   --------------

EQUIPMENT AND LEASEHOLDS, net                                    409,800          383,600
                                                            -------------   --------------
OTHER ASSETS
    Goodwill                                                   2,587,900        2,750,900
    Prepaid advertising and scrip inventory                      135,000          135,000
    Notes receivable                                              22,900           23,500
    Other assets                                                   1,000           28,700
                                                            -------------   --------------
                                                               2,746,800        2,938,100
                                                            -------------   --------------
         Total Assets                                         $3,923,100       $4,389,700
                                                            =============   ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Accounts payable                                          $  285,700       $  111,400
    Accrued liabilities                                          289,100           28,200
    Unearned revenue                                                  --          186,300
    Trade dollars issued in excess of earned                   2,391,900        2,147,900
    Note payable to shareholder                                       --           66,200
    Current portion of long-term obligations                     225,400           35,400
                                                            -------------   --------------
          Total current liabilities                            3,192,100        2,575,400
                                                            -------------   --------------
LONG-TERM OBLIGATIONS, net of current portion                     29,600           81,600
                                                            -------------   --------------
COMMITMENTS                                                           --               --

STOCKHOLDERS' EQUITY
    Common stock                                                   5,900            5,900
    Additional paid-in capital                                 2,748,000        2,649,300
    Subscribed shares                                             52,500               --
    Accumulated deficit                                       (2,109,500)        (909,500)
    Treasury stock                                               (13,000)         (13,000)
    Accumulated other comprehensive income, net of tax            17,500               --
                                                            -------------   --------------
                                                                 701,400        1,732,700
                                                            -------------   --------------
         Total Liabilities and Stockholders' Equity           $3,923,100       $4,389,700
                                                            =============   ==============

</TABLE>


                            See accompanying notes.


                                       3
<PAGE>

                                UBARTER.COM INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                    THREE MONTH ENDED JUNE 30, 1999 AND 1998


<TABLE>

                                                                      1999                         1998
                                                              -------------------             ------------
<S>                                                              <C>                             <C>
REVENUE                                                          $       909,300               $  148,500
COST OF REVENUE                                                          385,100                   17,200
                                                              -------------------             ------------
    Gross  profit                                                        524,200                  131,300
                                                              -------------------             ------------
OPERATING EXPENSES
    Cost of corporate trading revenue                                     32,000                   17,200
    Sales and marketing                                                   83,500                       --
    Product development                                                  256,900                       --
    General and Administrative                                         1,354,700                  108,700
                                                              -------------------             ------------
                                                                       1,727,100                  125,900
                                                              -------------------             ------------
INCOME (LOSS) FROM OPERATIONS                                         (1,202,900)                   5,400
                                                              -------------------             ------------
OTHER INCOME (EXPENSE)
    Interest expense                                                        (400)                  (1,400)
    Interest income                                                        3,300                    4,200
                                                              -------------------             ------------
                                                                           2,900                    2,800
                                                              -------------------             ------------

LOSS BEFORE INCOME TAXES                                              (1,200,000)                   8,200

INCOME TAX BENEFIT (PROVISION)                                                --                      600
                                                              -------------------             ------------
NET INCOME (LOSS)                                                $    (1,200,000)              $    8,800
                                                              ===================             ============
NET INCOME (LOSS) PER COMMON SHARE
              Basic                                              $         (0.20)              $     0.00
                                                              ===================             ============
              Diluted                                            $         (0.20)              $     0.00
                                                              ===================             ============

AVERAGE COMMON AND EQUIVALENT SHARES
              Basic                                                    5,956,667                4,099,566
                                                              ===================             ============
              Diluted                                                  5,956,667                4,413,232
                                                              ===================             ============

</TABLE>


                            See accompanying notes.


                                       4
<PAGE>


                                UBARTER.COM INC.
                             STATEMENT OF CASH FLOW
                    THREE MONTH ENDED JUNE 30, 1999 AND 1998



<TABLE>
                                                                      June 30,           June 30,
                                                                        1999               1998
                                                                  ----------------   ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                 <C>                 <C>
    Net income (loss)                                               $ (1,200,000)       $  (27,600)
    Adjustments to reconcile net income (loss) to net
          cash provided by operating activities
       Depreciation and amortization                                     383,500             2,300
       Non-cash charges related to stock option grants                    18,700                --
       Foreign currency loss                                              17,500                --
       Deferred income taxes                                                  --              (300)
       Bad debts                                                          94,000                --
       Net trade dollars expended                                        140,000             2,200
    Change in operating assets and liablilites
       Accounts receivable                                               (77,700)           (1,800)
       Prepaid advertising and other assets                               (3,900)               --
       Accounts payable and other liabilities                            248,900            (2,100)
                                                                  ----------------   ---------------
                                                                        (379,000)          (27,300)
                                                                  ----------------   ---------------
CASH FROM INVESTING ACTIVITIES
    Acquisition of equipment and leaseholds                              (72,700)          (19,700)
    Note receivable collections                                              600               200
                                                                  ----------------   ---------------
                                                                         (72,100)          (19,500)
                                                                  ----------------   ---------------
CASH FROM FINANCING ACTIVITIES
    Proceeds from issuance of common stock                                52,500                --
    Proceeds from notes payable                                          233,600            12,900
    Repayment of notes payable                                          (161,800)           (4,600)
                                                                  ----------------   ---------------
                                                                         124,300             8,300
                                                                  ----------------   ---------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                 (326,800)          (38,500)

CASH AND CASH EQUIVALENTS
    Beginning of period                                                  442,700           162,300
                                                                  ----------------   ---------------
    End of period                                                   $    115,900        $  123,800
                                                                  ================   ===============

SUPPLEMENTAL CASH FLOW INFORMATION
    Cash paid during the period for:
       Interest                                                     $        708        $    1,297
                                                                  ================   ===============
       Income taxes                                                 $         --        $       --
                                                                  ================   ===============

NON-CASH INVESTING AND FINANCING
    ACTIVITIES
    Purchase of BBE (Windsor) stock  for Trade Dollars
       and Ubarter.com stock                                        $    134,900        $       --
                                                                  ================   ===============


</TABLE>



                                       5
<PAGE>

                                UBARTER.COM INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                    THREE MONTHS ENDED JUNE 30, 1999 AND 1998

1 - BASIS OF PRESENTATION

The  accompanying  unaudited  financial  statements  of  Ubarter.com  Inc.  (the
"Company" or  "Ubarter.com")  have been  prepared in accordance  with  generally
accepted accounting principles for interim financial  information.  Accordingly,
they  do not  include  all of  the  footnotes  required  by  generally  accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management,  all  adjustments  (consisting  of  normal,  recurring  adjustments)
considered  necessary for fair presentation  have been included.  The results of
operations  for the  three-month  periods  ended June 30,  1999 and 1998 are not
necessarily  indicative  of the  results to be expected  for the full year.  The
consolidated financial statement combines the Company's balance sheet as of June
30, 1999 with the balance sheet of Barter Business  Exchange Inc.  ("BBE") as of
May 31, 1999. The consolidated  statement of operations  presents the results of
operations of the Company for the three months ended June 30, 1999, however, due
to the differing year-ends,  the results of operations of BBE from March 1, 1999
(the date of purchase)  through May 31, 1999 are consolidated with the Company's
results of operations for the first quarter of 1999.  Certain prior year amounts
have been  reclassified to conform with current year  presentation.  For further
information,  refer to the financial  statements  and footnotes  included in the
Company's report on Form 10-KSB, as amended, for the year ended March 31, 1999.

2 - TRADE DOLLARS

In accordance with the guidelines  established by the  International  Reciprocal
Trade  Association,  the Company has the right to borrow from the  exchange  and
spend within the exchange systems.  Such a practice is used by barter exchanges,
worldwide, to cover inventory purchases,  capital purchases,  operating expenses
and to control the supply of trade dollars in the exchange economy.  The Company
is obligated  to provide  goods and services to clients to offset any amounts of
Ubarter Trade Dollars issued in excess of earned. At June 30, 1999 and March 31,
1999, the Company had expended  $2,391,900 and $2,147,900  Ubarter Trade Dollars
respectively,  in excess of the amount of Ubarter  Trade  Dollars  earned by the
Company.

3 - ACQUISITION

The  Company  previously  owned 50% of the  outstanding  common  stock of Barter
Business Exchange (Windsor) Inc. ("BBE Windsor").  On June 23, 1999, Ubarter.com
acquired the remaining 50% ownership for approximately  $11,100 in cash, $43,800
in Ubarter Trade Dollars,  and 20,000 shares of Ubarter.com  common stock valued
at $4.00 on the date of purchase.  The purchase has been accounted for under the
purchase  method of accounting.  Under the purchase  method of  accounting,  the
purchase price is allocated to the assets acquired and liabilities assumed based
on their estimated fair values at the date of  acquisition.  The excess purchase
price  over the  estimated  fair value of the assets  acquired  and  liabilities
assumed has been allocated to goodwill. The Company recognized total goodwill of
$134,900 in the three  months  ended June 30, 1999.  The Company  estimated  the
economic useful life to be two years.


                                       6

<PAGE>

4 - CAPITAL STOCK

In May 1999, the Company received  approximately  $52,500 from the exercise of E
warrants to purchase 35,000 shares of common stock.  As of June 30, 1999,  these
shares  had not  been  issued  by the  Company  and  were  thus,  classified  as
subscribed  stock.  On June 23, 1999, the Company issued 20,000 shares of common
stock valued at $4.00 per share as partial  payment for equity  ownership in BBE
Windsor. (See Note 3.)

In October 1998,  10,980 shares were repurchased for  approximately  $13,000 and
classified as treasury stock. At June 30, 1999, the Company had 5,946,400 shares
of common stock issued and  outstanding at a par value of $.001 per share,  with
total authorized shares of 25,000,000.

On July 9, 1998, the Board of Directors authorized a 2-for-1 split of its common
stock to be  distributed to  stockholders  of record at the close of business on
July 24, 1998.  All per-share and shares  outstanding  data in the  accompanying
consolidated financial statements have been restated to reflect the stock split.

5 - INCOME (LOSS) PER SHARE

Following, is a reconciliation of the numerators of the basic and diluted income
(loss) per share for the three months ended June 30, 1999 and 1998:

                                                        1999            1998
                                                 ----------------    -----------
     Net income (loss) available to common
       shareholders                              $    (1,200,000)    $    8,800
                                                 ================    ===========
     Weighted average shares                           5,956,667      4,099,566

     Effect of dilutive securities

       Options                                                 -              -
       Warrants                                                -        313,666
                                                 ----------------    -----------
                                                       5,956,667      4,413,232
                                                 ================    ===========
     Basic income (loss) per share on
       weighted average shares)                  $         (0.20)    $     0.00
                                                 ================    ===========
     Diluted income (loss) per share             $         (0.20)    $     0.00
                                                 ================    ===========

Options and warrants to purchase  shares of common stock were  excluded from the
computation in 1999 because their effect would be antidilutive.


6 - REVENUE

The  following  table  summarizes  the cash and  trade  (consisting  of  Ubarter
Dollars)  components  of revenue  for the three  months  ended June 30, 1999 and
1998:

                                        1999                1998
                                   -------------       -------------
     Trade                         $    523,300        $    70,200
     Cash                               386,000             78,300
                                   -------------       -------------
                                   $    909,300        $   148,500



                                       7
<PAGE>


7 - STOCK OPTIONS

The Company  adopted a Stock  Option Plan (the  "Plan")  effective  June 1, 1998
whereby,  nonqualified and incentive stock options for up to 1,189,280 shares of
common stock 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,  and
100% after 24 months from the date grant.  The  provisions of the Plan allow the
administrators to determine the vesting period of options granted.

In June 1999,  the Company  granted  options under the Plan to purchase  135,000
shares of common stock all at an exercise price of $4.88 per share to certain of
the Company's officers and employees.

8 - COMPREHENSIVE INCOME

As of April 1, 1998, the Company adopted SFAS No. 130,  Reporting  Comprehensive
Income,   which   establishes   standards  for  the  reporting  and  display  of
comprehensive loss and its components in the financial statements. Comprehensive
loss was  $1,217,500  for the  three-month  period  ended June 30,  1999,  which
consisted of net loss and foreign currency translation adjustments. There was no
difference between  comprehensive income (loss) and net income (loss) in periods
prior to the quarter ended June 30, 1999.

9 - SUBSEQUENT EVENT

In July and August of 1999, funds totaling approximately $166,000 were loaned to
the Company by three shareholders and officers.  The loans are payable on demand
with  interest  accruing  at the rate of 12% per annum on the  unpaid  principal
amount.


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

Forward Looking Statements

The discussion in this report contains  forward-looking  statements,  including,
without  limitation,  statements,  which are made  pursuant  to the safe  harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although the
Company  believes  that  the  expectations   reflected  in  the  forward-looking
statements are  reasonable,  it gives no assurance that such  expectations  will
prove  to  be  correct.   The  forward-looking   statements  involve  risks  and
uncertainties that affect Ubarter.com's  operations,  financial  performance and
other  factors  as  discussed  herein  and in the  Company's  filings  with  the
Securities and Exchange Commission.



                                       8
<PAGE>


Overview

Ubarter.com   provides   business  to  business   barter  services  for  retail,
professional, media and other corporate clients through the Company's offices in
Seattle, Washington,  Toronto, Ontario, Vancouver, British Columbia and Windsor,
Ontario.  The Company manages a private barter currency,  Ubarter Trade Dollars,
to enable its clients to sell their products or services to the Company's  other
clients for Ubarter Trade Dollars.  In the near future,  the Company  expects to
offer an e-commerce solution to barter over the Internet.

Ubarter.com  was  incorporated  in  Nevada  in  September  1996  under  the name
International  Barter  Corp.  for the  purpose of  merging  with  Cascade  Trade
Association,  a Seattle based trade exchange.  Cascade Trade, founded in 1983 by
Steven  White,   Ubarter.com's   President  and  Chief  Executive  Officer,  had
approximately  500  clients  in the  Seattle  area at the  time  of the  merger.
Ubarter.com  began a direct public offering of common stock after the merger and
became publicly traded in February 1998. In March 1999, the Company acquired all
of the outstanding  stock of BBE, the largest trade exchange in Canada. In April
1999,  International  Barter  Corp.'s  name was changed to  Ubarter.com  Inc. to
reflect the Company's change to an Internet-based business model.

Substantially  all of the Company's  revenues are derived from  transaction fees
paid in cash  by  buyers  and  sellers  in a  barter  transaction.  The  Company
currently  charges a 5% cash fee on both  sides  (i.e.,  to both the  seller and
buyer) of most barter transactions.  Historically,  the Company has also derived
revenues  from  monthly  and set-up  fees  charged to  clients.  As the  Company
launches its e-commerce site, it does not anticipate  charging set-up or monthly
fees for clients doing business over the Internet. Revenue from transaction fees
are billed on a monthly basis. The Company  recognizes revenue equal to the cash
to  be  received  from  its  commission  earned  when  the  buyer  has  made  an
unconditional  commitment to pay and the earnings  process has been completed by
the finalization of a trade  commission.  Revenue is recognized for monthly fees
after the fees have been earned and collected.

A trade dollar is an accounting unit used to record the value of transactions as
determined  by the buying and selling  parties in barter  transactions.  Ubarter
Trade Dollars denote the right to receive goods or services available from other
clients or the obligation to provide goods or services to other clients. Ubarter
Trade Dollars may not be redeemed for cash.  When BBE was  acquired,  all of the
BBE Trade Dollars were converted to Ubarter Trade Dollars.

Ubarter.com  uses the ratio of one Ubarter Dollar to one local  currency  dollar
(currently, United States or Canadian) in measuring and accounting for purchases
and  sales.  This  one-to-one  ratio  is  consistent  with  industry  standards.
Ubarter.com  does not recognize any accounting  implications  if differences are
noted between  Ubarter  Dollars and the applicable  local currency dollar prices
that are within  reasonable  ranges that might exist  between  prices of similar
U.S. dollar or Canadian dollar transactions.



                                       9

<PAGE>


Three  Months  Ended June 30, 1999  Compared to the Three  Months Ended June 30,
1998

The  Company's  total  revenue in the first  quarter of fiscal 2000 was $909,300
compared  with total  revenue of $148,500 in the first  quarter of fiscal  1999.
This was a 634%  increase  in fiscal 2000 from fiscal  1999.  Revenue  increased
primarily  as  a  result  of  the  inclusion  of  revenues  from  the  Company's
acquisition of Barter Business  Exchange Inc.  ("BBE")  effective March 1, 1999.
Excluding  revenues  from BBE,  the  Company's  revenues  decreased in the three
months  ended June 30, 1999  compared  with the  comparable  period in 1998 as a
result of the Company's continued concentration a large portion of its financial
and labor  resources on the development of its  business-to-business  e-commerce
site for barter. Much of the effort,  which in prior years focused on increasing
transaction  fees  from  barter   transactions,   was  shifted  to  its  website
development  and to  e-commerce  strategic  development  activities in the first
quarter of fiscal 2000.

Corporate  trade revenue is included as a separate  component of total  revenue.
Corporate  trade  revenue  consists  primarily  of sales  generated  by  selling
consigned  inventories on behalf of trade exchange  members.  There is typically
little or no profit mark-up on such items. The revenue and corresponding expense
for the  first  quarters  of  fiscal  2000 and 1999 were  $32,000  and  $17,200,
respectively.

Costs and Operating Expenses

Cost of revenue consists of the cost of inventories acquired for resale and sold
during the period.  The cost of revenue for the first quarter of fiscal 2000 was
$385,100.  These costs were all  incurred by BBE. No costs were  incurred by the
Company because inventory sales were made on consignment, as described above. In
the first quarter of fiscal 1999,  there were no revenue costs because all sales
of inventories were made on a consignment basis.

Costs and operating expenses (including depreciation) increased to $1,759,100 in
the first  quarter of fiscal 2000 from  $125,900 in the first  quarter of fiscal
1999.  The  increase  in  operating  expenses  related  primarily  to  recurring
operating expenses incurred by BBE, significant increases in product development
and general  administrative  expenses  and an  increase  in sales and  marketing
expense in the first quarter of fiscal 2000.

Product development expense increased to $256,900 in the first quarter of fiscal
2000 compared with minimal expenses in the first quarter of fiscal 1999. Product
development  expenses  consist  primarily  of  payments  to outside  contractors
related  to the  Company's  website  development  and,  to a lessor  extent,  of
depreciation on equipment used for development and overhead costs. Ubarter.com's
policy  is to  expense  product  development  costs  as they are  incurred.  The
increase in the first quarter of fiscal 2000 was primarily  attributable  to the
Company's  development efforts,  including retaining outside consultants related
to  technologies  necessary to support an  e-commerce  barter site.  The Company
expects to incur approximately $2 million in product development costs in fiscal
2000 as the  Company's  website is  launched  and  e-commerce  functionality  is
enhanced.



                                       10
<PAGE>


General and administrative expenses increased to $1,386,700 in the first quarter
of fiscal 2000 from $125,000 in the first quarter of fiscal 1999.  This increase
was primarily due to recurring  operating expenses incurred by BBE, the addition
of several key personnel and several new staff members in the Company's  trading
department  and additional  employees  hired to work on developing the Company's
website. In addition, the Company incurred substantially greater legal and other
professional fees, such as accounting and investor/public relations, as a result
of the Company's  public company status and to assist in executing the Company's
business strategy.  Another  significant noncash expense in the first quarter of
fiscal 2000 related to the  amortization of the cost of goodwill  resulting from
the acquisition of BBE.  Amortization  expense of $337,000 was recognized during
the first three months of fiscal 2000.  Goodwill  resulting from the acquisition
of BBE was estimated by management to be primarily  associated with the acquired
workforce,  infrastructure and technological expertise. As a result of the rapid
technological  changes  occurring  in the  Internet  industry  and  the  intense
competition   for   qualified   professionals,   goodwill  is   amortized  on  a
straight-line basis over the estimated life of the benefit of 24 months

Sales  and  marketing  expense  primarily  consists  of  advertising  and  other
promotional costs.  Ubarter.com  expects sales and marketing expense to increase
significantly in fiscal 2000 primarily related to the launch of its website. The
Company  currently  has  $135,000  of  prepaid  advertising  which it expects to
utilize in the future promotion and marketing of its website.

Liquidity and Capital Resources

Since its inception in 1996,  Ubarter.com has financed its operations  primarily
from the sale of common stock and  warrants  and  proceeds  from the exercise of
those  warrants.  The operations of Cascade Trade  Association  which was merged
into Ubarter.com in November 1996 were financed  primarily through internal cash
flow.

At June 30, 1999,  Ubarter.com had a working capital deficit of $2,425,600.  The
Company's  working capital deficit was $1,507,400 at June 30, 1998. The decrease
in working capital  resulted  primarily from a $2,327,200  (deficit)  balance of
Ubarter  Trade  Dollars  issued in excess of earned that existed on the books of
BBE as of May 31, 1999.

In accordance with the guidelines  established by the  International  Reciprocal
Trade  Association,  Ubarter.com  has the right to borrow from its  exchange and
spend within its  exchange  system.  Such a practice is commonly  used by barter
exchanges, worldwide, to cover inventory purchases, capital purchases, operating
expenses and to control the supply of Ubarter Trade Dollars. Ubarter.com engages
in barter to pay for some of its  operating  costs.  Ubarter.com  is  ultimately
obligated  to provide  products  and services to clients to offset any amount of
Ubarter Trade Dollars issued in excess of earned.  BBE also engaged in barter to
pay for some of its operating costs. At June 30, 1999,  Ubarter.com had expended
$2,391,900 of Ubarter  Dollars in excess of the amount of Ubarter Dollars earned
by it compared  with  $2,147,900  at June 30, 1998.  The Company  considers  the
current  level  manageable.  These  amounts  are  shown  as a  liability  on the
Company's balance sheet as of June 30, 1999 and 1998.




                                       11

<PAGE>


The cash provided by financing  activities  was $124,300 in the first quarter of
fiscal 2000 compared  with $8,300 in the first quarter of fiscal 1999.  Net cash
provided  by  financing  activities  in first  quarter of fiscal  2000  resulted
primarily from the exercise of warrants and proceeds from notes payable. The net
cash  provided  by  financing  activities  in the first  quarter of fiscal  1999
resulted  from the proceeds  from notes  payable.  The Company  currently  has a
$67,000  revolving  note  payable  with a bank.  The note  payable is subject to
annual  renewal.  There was a balance of $67,000  at June 30,  1999.  Borrowings
under the note require  security  deposits of cash and cash equivalents with the
bank.  The  Company  did not have any credit  facility  in the first  quarter of
fiscal 1999.

The net cash used by operating  activities  was $379,000 in the first quarter of
fiscal  2000 and  $27,300  in the first  quarter of fiscal  1999.  For the three
months  ended  June 30,  1999,  Ubarter.com  had a net loss of  $1,200,000.  The
primary  adjusting  items were  $383,500 in  depreciation  and  amortization  of
goodwill,  $94,000 of bad debts,  and $140,000 net expenditure in trade dollars.
During  the first  quarter of fiscal  1999,  there were  increases  in  accounts
receivable of $77,700 and increases in accounts payable and other liabilities of
$248,900.  The cash used in operating activities of $27,300 for the three months
ended June 30, 1998,  reflected a net loss of $27,600. The increase in cash used
in operations was primarily  attributable to increased personnel and development
costs in the first  quarter of fiscal 2000  compared  with the first  quarter of
fiscal 1999. In the first three months of fiscal 2000, Ubarter.com used net cash
of $72,700 for the acquisition of property,  equipment and leaseholds,  compared
to $19,700 in the first three months of fiscal 1999.

Ubarter.com  maintains its major U.S. cash balances at one financial institution
located in Las Vegas,  Nevada and maintains its major  Canadian cash balances at
one financial institution located in Toronto, Canada. Funds not required for the
Company's immediate needs may be invested in certificates of deposit, short-term
government obligations, or money market funds.

As of June 30,  1999,  the  Company  had no  material  commitments  for  capital
expenditures.   Ubarter.com  leases  its  U.S.  office  facilities  in  Seattle,
Washington and leases its Canadian office  facilities in Toronto,  Vancouver and
Windsor. Future minimum rental commitments as of June 30, 1999 pursuant to these
leases are approximately $350,000.

The Company  believes  its  existing  working  capital  and cash from  financing
activities will be sufficient to fund its operating  activities  through the end
of  fiscal  year  2000,  however,  the  Company  is  currently   experiencing  a
significant shortage in cash resources necessary to fund planned expenditures in
product   development,   salaries  for  existing  and  future   personnel,   and
professional  fees and  marketing.  Unless the Company is  successful in raising
additional capital, it may not be able to achieve its expansion goals, including
further  development  of the Company's  website.  There is no assurance that the
Company will have or be able to access  sufficient  capital or other  resources.
Ubarter.com  believes that a portion of its short-term capital resources,  up to
$1.2 million may be provided through the exercise of outstanding E Warrants. The
E Warrants  are  exercisable  at a price of $1.50 and  expire in June 2000.  The
perceived  value of these  warrants  at any given  time is related to the market
price of the Company's  common  stock,  which trades over the counter on the OTC
Bulletin  Board.  If the  Company  is  unable to obtain  financing  through  the
exercise  of  warrants  or other  means,  it may be unable  to meet its  working
capital requirements or implement its short-term plans for expansion.


                                       12

<PAGE>


The Company  anticipates  having to raise additional  capital by equity issuance
during the next several years,  as it expects to grow at rates that will require
more funds than will be generated by its operations.  Ubarter.com  does not have
any commitments for additional  financing at this time. The Company's ability to
obtain additional  capital may be dependent on market  conditions,  the national
and international  economies and other factors outside its control.  If adequate
funds are not available or are not available at acceptable  terms, the Company's
long-term  ability to finance  its  expansion,  develop or enhance  services  or
respond to competitive pressures would be significantly limited.

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.  Systems that do not properly  recognize  this  information  could fail or
generate  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 the year 2000 or "Y2K" problem.

Scope and Impact of Y2K on Ubarter.com.  Ubarter.com  utilizes both  proprietary
software and software  provided by outside  vendors which may be impacted by the
Y2K problem. The operation of the Company's trade exchange is dependent upon the
proper  functioning  of its  computer  software.  Management  has  assessed  the
potential  impact of the Y2K issue on Ubarter.com  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  Ubarter.com's  business,  operations  or
financial condition.

Remediation  plans.  The  Company's  principal  software  vendor  has  completed
reprogramming of its proprietary software.  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.  Ubarter.com  presently  believes  that  with
modifications  to existing  software and  conversions  to new software,  the Y2K
issue can be mitigated.  Management does not believe that Ubarter.com will incur
significant  operating  expenses or be  required  to invest  heavily in computer
system improvements to be Y2K compliant.  However, even if such modifications or
conversions are not made, or are not completed timely, Ubarter.com would be able
to continue operations  manually.  This would result in more cumbersome and less
efficient  operations but is not currently  expected to have a material  adverse
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  Ubarter.com  and its
operations.  Significant  uncertainty  exists concerning the potential costs and
effects associated with any year 2000 compliance.



                                       13
<PAGE>


Risk Factors

You should  carefully  consider the  following  factors,  among  others,  as you
evaluate the Company and the  forward-looking  statements  the Company  makes in
this document.  Any of these risk factors could  materially and adversely affect
the   Company's   business,    financial   condition   or   operating   results.
Forward-looking  statements are subject to a number of risks and  uncertainties.
The  Company  urges you to note the  description  of its plans,  objectives  and
strategies for future operations, assumptions underlying these plans, objectives
and strategies and other  forward-looking  statements included in the "Business"
section in this  document.  These  descriptions  and statements are based on the
Company's  current  expectations.   The  Company's  actual  results  may  differ
significantly from the results discussed in these forward-looking  statements as
a result of certain  factors,  including  those set forth in this "Risk Factors"
section and elsewhere in this document.  The Company undertakes no obligation to
update  publicly  any  forward-looking  statements  for any reason,  even if new
information becomes available or other events occur in the future.

The  Company  has  had  relatively   small  operations  to  date  and  may  face
difficulties in achieving its growth strategy in its markets.

You should consider the risks and  difficulties the Company expects to encounter
as it attempt to execute its business  strategy,  including the rapidly evolving
nature of the  commercial  barter  market and the Internet  market.  These risks
include uncertainties about the Company's ability to:

     -    attract a larger number of clients to execute barter  transactions  on
          its offline  trade  exchange  and on its  soon-to-be  launched  barter
          e-commerce website;

     -    increase  awareness  of the  benefits of  bartering in general and the
          specific services it can provide;

     -    strengthen the loyalty of its existing clients;

     -    effectively   execute  its  plan  to  acquire  other  barter  exchange
          companies in North America;

     -    successfully  implement its plan to introduce online e-commerce barter
          website;

     -    respond effectively to competitive pressures;

     -    continue to develop and upgrade its technology;

     -    attract, integrate, retain and motivate qualified personnel; and

     -    respond effectively to increased business operation demands.

The Company may be unable to accomplish one or more of these things, which could
cause its business to suffer.  In addition,  accomplishing  one or more of these
things could be very costly,  which could harm the Company's  financial results.


                                       14
<PAGE>


Funds may be insufficient to finance the Company's plans for growth.

The Company's  existing working capital and cash from financing  activities will
not be  sufficient  to allow it to execute  its  business  plan,  including  the
development  of its e-commerce  barter  website and  acquisition of other barter
exchanges,  and meet the demands for its services  during  fiscal year 2000.  In
addition,  the Company is currently  experiencing a significant shortage in cash
resources  necessary  to  fund  planned  expenditures  in  product  development,
salaries for existing and future personnel, and professional fees and marketing.
The Company will need to raise additional capital to finance its expansion goals
and operations.  The Company believes a portion of its capital resources,  up to
$1.2  million,  will come  from the  exercise  of  outstanding  warrants.  These
warrants have an exercise  price of $1.50 and expire in June 2000. The perceived
value of these  warrants at any given time is related to the market price of its
common stock,  which trades over the counter  through the OTC Bulletin Board. If
the Company is unable to obtain the expected  portion of its  financing  through
the exercise of warrants or other financings, it may not be able to successfully
implement its short-term or long-term plans for expansion or to meet its working
capital requirements.

The full development and implementation of the Ubarter.com  website will require
additional resources.  The Company may not be able to obtain the working capital
necessary to develop fully its website.  Furthermore,  the Company's website may
not produce material revenue even if successfully developed.

Additionally,  the Company may not be successful in its efforts to acquire other
regional  trade  exchanges  and  expand  as  intended.   One  of  the  Company's
assumptions  in making  acquisitions  is that it will be able to use its  common
stock, rather than cash, as consideration for any purchase.  This assumption may
prove to be  incorrect.  If the Company  does use shares of its common  stock to
make acquisitions,  the issuance of additional shares could be dilutive. Even if
the Company succeeds in its expansion plans, it may experience rapid growth that
requires  additional  funds to  expand  its  operations  and  organization.  The
Company's working capital  requirements in the foreseeable future will depend on
a variety of factors including capital  requirements to implement and adjust its
business plan.

The Company does not have current  commitments  for  additional  financing.  The
Company intends to explore a number of options to secure  alternative  financing
including  the issuance of  additional  equity.  The Company  might not succeed,
however,  in raising  additional  equity capital or in negotiating and obtaining
additional and acceptable  financing when it needs it. The Company's  ability to
obtain additional capital may depend on market conditions  (including the market
for Internet  stocks),  national and global  economies and others factors beyond
its control.  If adequate  capital were not  available or were not  available on
acceptable  terms at a time when the  Company  needed it, its ability to execute
its expansion  plans,  develop or enhance its services or respond to competitive
pressures would be significantly impaired.

The  Company  faces   competition  from  numerous  barter  exchanges  and  other
companies.

There are hundreds of  independent  barter  exchanges  in the United  States and
Canada, some of which may have similar plans for international  expansion in the
barter  industry.  For  example,  ITEX  Corporation,  a publicly  traded  barter
company, is attempting internet expansion.  Some of the established  entities in
the barter industry may have more operating  experience,  larger client bases or
greater financial, marketing, technical and other resources. It is possible that
a group of  independent  barter  exchanges  could join forces to create  another
international   barter  company.   Consequently,   the  Company  will  encounter
competition  in its  efforts to expand  its  business  and to acquire  desirable
independent trade exchanges.



                                       15
<PAGE>


There are no substantial  barriers to initial entry into the Company's business,
and therefore it expects  competition from trade exchanges,  and other companies
to increase in the future.  The Company believes the more market  penetration it
achieves, the higher the barrier to entry will become for anyone contemplating a
similar  system.  The  Company  faces the risk,  however,  that  existing or new
competitors  may develop  technologies  or services or strategic  alliances  and
affiliations that make its services less marketable or less useful or desirable.
Furthermore,  the Company may not be able to successfully  enhance its services,
develop new services or lower costs when and, as it needs them.

Similarly,  the Company  expects to face  competition  in its efforts to develop
Ubarter.com  into  a  premier   e-commerce   barter  website.   The  market  for
Internet-based  services and products is relatively new, intensely  competitive,
rapidly  evolving  and  subject  to rapid  technological  change.  A  number  of
companies that have expertise in developing  online commerce and in facilitating
person-to-person  or  business-to-business   interaction,   could  be  potential
competitors if they elected to enter the barter business. Certain Internet-based
companies with unique  purchasing or sales models such as eBay and Priceline.com
have  significant  technical,  financial  and  marketing  resources and could be
potential   competition  for  Ubarter.com.   These  companies  would  be  strong
competitors if they decided to enter the barter business.

A key component of the Company's future revenue growth depends on its ability to
develop and successfully implement a quality e-commerce barter website.

The Company  intends to develop  Ubarter.com  into a premier  e-commerce  barter
website where businesses can trade products and services. The Company may not be
successful in its plans to implement, maintain and develop usage of the website.
The Company's website may encounter  technical  difficulties in  implementation.
Technical problems may cause delays or require additional expenditures.  For the
Company's website to be perceived as a viable  marketplace and a replacement for
or supplement to current trade exchanges,  the website must provide accurate and
timely  information  on a  consistent,  easy-to-use  and reliable  basis.  Other
measures of quality of the Company's website include:

     -    the level of representative client participation;

     -    a sufficient  range and  availability of products and services offered
          over the Company's website;

     -    the Company's ability to service high response rates from clients; and

     -    timely  posting of  changes  and  modifications  to the  inventory  of
          clients and products and services offered over the Company's website.

The Company  expects to derive  revenues  in the near term from the  Ubarter.com
website.  The  success  of  the  Company's  business  will  depend  on  end-user
acceptance of its online services. The Company's success will also depend on its
ability to design,  develop, test and support new services and enhancements on a
timely basis that meet  changing  customer  needs and the  Company's  ability to
respond to  technological  developments  and emerging  industry  standards.  The
Company may be unable to maintain adequate quality control  procedures,  develop
and market new services and enhancements  that meet changing  customer needs, or
respond to technological  developments and emerging industry  standards.



                                       16
<PAGE>


In the  Company's  effort to develop new and enhanced  services and features for
its website,  the Company may alienate  current  users or  experience  technical
difficulties.

The Company  believe its new website when  launched  will be more  attractive to
clients if the Company develops  features that will,  among other things,  allow
clients to access  products  and  services  online 24 hours a day,  seven days a
week, check trade dollar balances and execute trades in real time.  Accordingly,
the Company  intends to introduce  additional or enhanced  services and features
designed to attract new clients to the Company's website while retaining current
clients.  If the Company  introduces  services or features  that do not function
properly or that its current  clients do not  perceive  favorably,  they may not
continue to visit the Company's website.  Clients may also choose a competitor's
site over the Company's. The Company may also experience difficulties that could
delay or  prevent  the  Company  from  introducing  new  services  or  features.
Furthermore,  these services or features may contain errors or problems that the
Company discovers after it has already  introduced them. The Company may need to
modify  significantly the design of these services or features on its website to
correct  these  errors.  Errors  could lead to  significant  dissatisfaction  of
clients and result in adverse publicity.

The Company's growth and success depend on continued growth in barter industry.

Industry  sources,  as well as the Company's  experience,  indicate that for the
last several  years the  commercial  barter  industry has  experienced  a steady
growth.  These sources have attributed the growing appeal of the barter industry
among  business  owners to increasing  competitive  pressures,  the existence of
surplus  inventory,  unproductive  assets,  excess capacity,  and the ability to
generate new sales and reach new customers while conserving cash.  Nevertheless,
the Company  believes there has been low penetration by the barter industry into
the market of  potential  business  customers.  Although the Company is aware of
nothing that would lead it to conclude that the retail barter  industry will not
continue to grow at a steady rate, it is possible this growth will not continue.
If the growth of the barter industry were to decline, however, the Company would
expect to face heightened  competition with weakened profitability and a reduced
share  of the  barter  market,  which  could  materially  adversely  affect  its
business, results of operations and financial conditions.

The Company may be unable to effectively manage its growth.

As the  Company  continues  to expand its level of  operations,  it will need an
effective  planning  and  management  process to  implement  its  business  plan
successfully. After introduction of the Company's new website, it may experience
a period of significant  expansion of its business.  Depending on the amount and
timing of any increase in business,  this expansion  could place a strain on its
management,  operational and financial  resources.  Some areas that could be put
under strain by growth include  customer  support,  customer billing and website
support and  maintenance.  The Company has  management,  operating and financial
systems in place, and it intend to continue or efforts to improve these systems.
There is a risk,  however,  that such systems may be  inadequate  to support its
existing  and future  operations  or that  hiring,  training  and  managing  new
employees will be more difficult then the Company anticipates.



                                       17
<PAGE>


The Company has historical  losses and anticipates  future losses in the initial
stage of implementing  its business  strategy.

The Company is incurring losses from its operating  activities.  As of March 31,
1999, the Company had an accumulated deficit of $909,500. The Company expects to
increase its operating expenses in an effort to expand its marketing operations,
and it expects to increase its level of  expenditures  to further develop online
barter capability.  These anticipated  increases in operating expense levels and
developmental costs will adversely affect operating results. The Company expects
that it will continue to incur losses during  fiscal year 2000.  Further,  if it
successfully  accomplishes its plan of acquiring  existing trade exchanges,  the
Company believes these acquisitions could result in additional  operating losses
and negative cash flows until the acquisitions are successfully  integrated into
its operations. If the Company acquires other trade exchanges,  period-to-period
comparisons of the Company's  financial  results may not be meaningful,  and you
should not rely on them as an indication of future performance.  The Company may
not be able to integrate the  operations  from its recent  acquisition of Barter
Business Exchange or from any future acquisitions.

The  Company may not be  successful  in  integrating  the  operations  of Barter
Business Exchange or from any future  acquisitions.  The BBE acquisition was the
Company's  first  significant  acquisition.  The Company  therefore  has limited
experience with completing and integrating acquisitions.  There is risk that the
Company  will be unable  to  integrate  successfully  the  operations  of Barter
Business Exchange with its existing business or that the anticipated benefits of
the acquisition,  or any future acquisitions,  may not be realized.  Part of its
business  strategy  includes  growth by  acquisition,  so the Company expects to
pursue other  acquisitions in the future. The Company may be unable to identify,
negotiate  or  finance  future   acquisitions.   The  Barter  Business  Exchange
acquisition  and any future  acquisitions  present many risks and  uncertainties
generally associated with acquisitions including:

     -    adverse effects on the Company's  reported  results of operations from
          acquisition-related charges and amortization of goodwill and purchased
          technology;

     -    increased fixed costs, which could impact profitability;

     -    increased debt;

     -    inability  to  maintain  the  key  business   relationships   and  the
          reputation of the acquired businesses;

     -    potential  dilution  to  current  shareholders  from the  issuance  of
          additional equity securities;

     -    difficulties integrating operations, personnel, technologies, products
          and information systems of the acquired businesses;

     -    maintenance  of the  Company's  standards,  controls,  procedures  and
          policies;

     -    becoming   responsible   for   significant   liabilities  of  acquired
          companies;

     -    diversion of management's attention from other business concerns; and

     -    potential loss of key employees of acquired businesses.

The Company is currently  facing all of these challenges in some degree relating
to the BBE acquisition, and the Company has have not yet established its ability
to meet them.

The  Company  currently  does  not  have  any  understandings,   commitments  or
agreements  with  respect  to any other  material  acquisition  and no  material
acquisition is currently being pursued.



                                       18
<PAGE>


The Company is dependent on key personnel.

The  successful  implementation  of the Company's  business plan and the overall
success of its business will depend on the skills and efforts of its  management
personnel and, to a large extent, the active  participation of Steven White, its
Chief  Executive  Officer  and  President  and Bob  Bagga,  its Chief  Operating
Officer, as well as its other executive officers and key employees.  The Company
has  employment  agreements in place with certain key employees and  management.
The Company also has key-man  insurance  covering the lives of Mr. White and Mr.
Bagga in the amount of $1.0 million and  approximately  $670,000,  respectively.
The  Company  does  not have key man life  insurance  on other  executives.  The
Company's future success will depend on its ability to attract,  train,  retain,
and motivate  technical,  managerial,  marketing and customer support personnel.
Competition  for these  personnel may be intense,  particularly  for individuals
with e-commerce  experience.  The Company provides stock options,  which further
serve to retain and motivate key employees.  The Company  nevertheless faces the
risk that it will be unable to attract, integrate, retain and motivate qualified
employees.

An  established  public  trading  market for the Company's  securities  does not
exist.

The Company's  common stock trades on the OTC Bulletin  Board.  The OTC Bulletin
Board is an electronic  quotation  medium used by subscribing  broker dealers to
reflect dealer  quotations on a real-time  basis.  The  over-the-counter  market
provides  significantly less liquidity than the Nasdaq Stock Market.  Quotes for
stocks  included  on the OTC  Bulletin  Board are not  listed  in the  financial
sections  of  newspapers  as are those for the  Nasdaq  Stock  Market.  Further,
quotation entries on the OTC Bulletin Board may reflect an unpriced indicator of
interest  (such as "bid wanted" or "offer  wanted"  indicators)  on  unsolicited
non-dealer interest.  Therefore,  prices for securities traded solely on the OTC
Bulletin  Board may be difficult  to obtain,  and holders of common stock may be
unable to resell their securities at or near their original offering price or at
any price.

Furthermore,  the National  Association of Securities Dealers has enacted recent
changes that limit quotations on the OTC Bulletin Board to securities of issuers
that are  current  in their  reports  filed  with the  Securities  and  Exchange
Commission.  The intent of this change is to make reliable and current financial
and other information about issuers available to the investing public.  The NASD
has proposed additional changes to the OTC Bulletin Board. The proposed changes,
if and when implemented, will require broker-dealers and market makers to review
current information about an issuer before making  recommendations to a customer
in the  security  and to provide  certain  disclosure  information  on the trade
confirmation for all customer transactions.  At this time, the impact these rule
changes  may have on the  Company's  securities  or the  trading  of  securities
generally on the OTC Bulletin  Board  cannot be  determined.  If at any time its
securities  are not  included on the OTC  Bulletin  Board and do not qualify for
Nasdaq,  quotes for the  securities may be included in the "pink sheets" for the
over-the-counter  market.  This trading  market is even less liquid than the OTC
Bulletin  Board  and  holders  of common  stock  may be  unable  to  obtain  any
quotations for securities.

"Penny stock"  regulations  impose  certain  restrictions  on  marketability  of
securities.

The SEC has adopted  regulations that generally define a "penny stock" to be any
equity security that is not traded on a national  securities  exchange or Nasdaq
and that has a market price of less than $5.00 per share or an exercise price of
less than $5.00 per share,  subject to certain exceptions.  The definition would
exclude  a  security  of  an  issuer  that  meets  certain   minimum   financial
requirements. Generally, these minimum thresholds would be met by an issuer with
net tangible assets in excess of $2 million or $5 million, (depending on whether
the issuer has been operating continuously for less or more than three years) or
by an issuer  with  "average  revenue" of at least $6 million for the last three
years.



                                       19
<PAGE>


As long as the Company does not meet the relevant financial requirements and its
common stock is trading at less than $5.00 per share on the OTC Bulletin  Board,
the  Company's  securities  are  subject to the penny stock  rules.  These rules
impose  additional sales practice  requirements on  broker-dealers  who sell its
securities to persons other than established  customers and accredited investors
(generally,  investors with a net worth in excess of $1,000,000 or an individual
annual income  exceeding  $200,000,  or, together with the investor's  spouse, a
joint income of $300,000).  For  transactions  covered by the penny stock rules,
the broker-dealer must make a special suitability determination for the purchase
of such  securities  and have received the  purchaser's  written  consent to the
transaction prior to the purchase.  Additionally, for any non-exempt transaction
involving  a penny  stock,  the rules  require,  among  other  things,  that the
broker-dealer  deliver an SEC mandated risk disclosure  document relating to the
penny stock market and the risks associated  therewith prior to the transaction.
The  broker-dealer  must  also  disclose  the  commission  payable  to both  the
broker-dealer and the registered  representative  as well as current  quotations
for  the  securities.  If  the  broker-dealer  is  the  sole  market-maker,  the
broker-dealer must disclose this fact and the  broker-dealer's  presumed control
over the  market.  Finally,  the  broker-dealer  must  send  monthly  statements
disclosing  recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the penny stock
rules  may  restrict  the  ability  of  broker-dealers  to  sell  the  Company's
securities  and may affect the  ability of the  Company's  shareholders  to sell
their securities in the secondary market.

Volume of shares eligible for sale may depress the market price.

Of the 5,915,420  shares of common stock  outstanding  as of March 31, 1999, the
Company issued 1,439,400 under an exemption from the registration  provisions of
the Securities Act of 1933 under Rule 504 of Regulation D. These Rule 504 shares
are eligible for resale,  without  limitation,  in the open market.  The Company
issued the remaining 4,476,020 shares in private  transactions.  These 4,476,020
shares  are  restricted  securities  within  the  meaning  of Rule 144 under the
Securities  Act of 1933.  Of these shares,  the Company  expects to register for
resale by certain shareholders  2,753,000 shares of its common stock,  including
800,000 shares issuable upon exercise of outstanding warrants and 150,000 shares
of common stock issued in the BBE acquisition.  Assuming  exercise of all of the
warrants and effectiveness of the registration  statement relating to the resale
of the  shares,  shareholders  may  sell  up to  2,753,000  shares,  which  will
represent  approximately  40% of the Company's issued and outstanding  shares of
common stock. All of the remaining  restricted shares,  including shares held by
affiliates,  became  eligible  in March  1999,  for  resale in the open  market,
subject to the volume and other conditions of Rule 144. There are no contractual
restrictions  on the resale of the  outstanding  common  stock,  except for some
volume  limitations  on the 150,000  shares  issued in  connection  with the BBE
acquisition.  The sale in the public market of the shares to be  registered  for
resale as well as the restricted  shares, or the perception that these sales may
occur, may depress  prevailing market prices of the common stock.  These factors
may also make it more  difficult for the Company to raise funds  through  future
offerings of common stock.

The Company will depend on the continued  utility of the Internet and technology
for its e-commerce barter site.

The performance of the  Ubarter.com  website will be dependent on the successful
operation  of the Internet and on certain  third  parties and services  (such as
Internet service providers, Internet backbone providers and Web browsers). Users
may  experience  difficulties  resulting from system  failures  unrelated to the
Company's  internal  systems  and  services.  If the  Internet  were  to  become
regularly  unavailable  for many  hours at a time,  or if its  ability to handle
traffic loads were to  deteriorate  enough to cause frequent  unavailability  or
slow  response  times,  there would be less  traffic to the  Company's  website.
Furthermore,  the  perception  of the quality of the  Company's  services  could
suffer.  To date,  the Internet has proven highly  resilient  and  responsive to
rapid  growth in its use, and many of the world's  telecommunications,  software
and hardware companies are continually investing in capacity and improvements.



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<PAGE>


The Company's  Internet  services  will be designed  around  certain  standards,
including, for example, Internet security standards.  Current and future success
of the Company's services may become subject to additional industry standards as
Internet commerce rapidly evolves.  As a result the Company's business may incur
additional  costs of unknown  proportions as the Company is confronted  with new
technology  standards.  In addition,  the Company may not be  successful  in its
efforts to enhance  existing  services and to develop,  introduce and market new
services.  Furthermore,  the  Company's  enhancements  and new  services may not
adequately  meet  the   requirements  of  the  marketplace  and  achieve  market
acceptance.  As the Internet  develops,  it is possible that  incompatibility or
lack of appropriate  features could impact the Company's  business.  The Company
expects sales of its services will depend in large part on a robust industry and
infrastructure for providing Internet access and carrying the rapidly increasing
Internet  traffic.  Certain critical issues concerning the commercial use of the
Internet (including capacity to handle projected increases in traffic, security,
reliability, cost, ease of use, access and quality of service) remain unresolved
and may impact the growth of Internet  use.  The  Internet may not prove to be a
viable commercial marketplace because of inadequate development of the necessary
infrastructure,  such as a reliable  network  backbone or timely  development of
complementary  products,  such as high speed modems. Because global commerce and
on-line exchange of information on the Internet and other similar open wide area
networks are new and  evolving,  the Company  cannot  predict with any assurance
whether the  infrastructure  or  complementary  products  necessary  to make the
Internet a viable commercial marketplace will continue to be developed.  Even if
the necessary  infrastructure  and  complementary  products are  developed,  the
Company  cannot  predict  whether the Internet  will remain a viable  commercial
marketplace.   In  addition,   the  widespread   adoption  of  new  Internet  or
telecommuting  technologies  or  standards  could  require  the  Company to make
substantial  expenditures to modify or adapt its services. In this case, the new
Internet or telecommuting services or enhancements that the Company offers could
contain  design  flaws or other  defects.  Although  the  Company  expects to be
responsive to changes in the Internet and  technology,  it may not be successful
in achieving  widespread  acceptance of its services  before  competitors  offer
services with speed and performance equal to or greater than the Company's.

Security  and  privacy  concerns  could  subject  the  Company to  liability  or
otherwise deter consumers from using its Web site.

Once the  Company is able to conduct  online  barter  transactions,  it could be
subject to litigation  and liability if third parties were able to penetrate the
Company's  network  security or  otherwise  misappropriate  its users'  personal
information.  This  liability  could  include  claims  for  unauthorized  barter
transactions, impersonation or other similar fraud claims. It could also include
claims  for other  misuses of  personal  information,  such as for  unauthorized
marketing purposes. In addition, the Federal Trade Commission and certain states
have  been  investigating  certain  Internet  companies  regarding  their use of
personal  information.  The  Company  could  incur  additional  expenses  and be
required to change its current practices if new regulations regarding the use of
personal  information  are  adopted  or  should  government  agencies  choose to
investigate the Company's privacy practices.

The need to securely  transmit  confidential  information  over the Internet has
been a significant  barrier to electronic  commerce and communications  over the
Internet.  Any  well-publicized  compromise of security  could deter more people
from using the  Internet or from using it to conduct  transactions  that involve
transmitting confidential  information,  such as barter transaction and personal
information. Internet security concerns could frustrate the Company's efforts to
grow its client base.  The Company may also incur  significant  costs to protect
against the threat of security breaches or to alleviate  problems caused by such
breaches.



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<PAGE>


The  Company  faces risks from  potential  government  regulation  of the barter
industry and of the Internet.

The  barter  industry  is not  currently  subject  to direct  regulation  by any
government agency, other than regulations applicable to businesses.  Certain tax
regulations  require U.S.  barter  exchanges  to file with the Internal  Revenue
Service,  on an annual basis,  the totals of the barter sales of their  clients.
Similarly,  there are currently few laws or regulations  governing  usage of the
Internet.  It is possible that a number of laws and  regulations  may be adopted
with  respect to the  Internet,  covering  issues  such as user  privacy and the
pricing,  quality and other  characteristics of products and services and taxes.
The adoption of laws or regulations  applicable to the Company's  business could
hinder the growth of the barter  industry or the  Internet.  As a result,  these
regulations could cause a decrease in the demand for the Company's  services and
an increase in its cost of doing business or otherwise  have a material  adverse
effect on the Company's business, prospects,  financial condition and results of
operations.  Furthermore,  the applicability to the Internet of existing laws in
various  jurisdictions  governing issues such as property  ownership,  sales and
other  taxes,  libel and  personal  privacy is  uncertain  and may take years to
resolve.

The Company's systems may be subject to Year 2000 problems.

The Company has reviewed its own  information  technology  and other  technology
systems to assess and remediate any Year 2000 problems. The Company believes all
of its systems and software are Year 2000 compliant. The Company cannot, though,
be sure that its internal  systems will function  properly in the Year 2000. See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Discussion of the Year 2000 Issue."

The  Company's  quarterly  operating  results  are subject to  fluctuations  and
seasonality.

The Company's revenue and operating results may vary  significantly from quarter
to quarter as a result of a number of factors,  some of which are outside of its
control. These factors include:

     -    the  commitment of clients to the general  concept of bartering and to
          the concept of bartering online through the Company's website;

     -    the budget cycles of the Company's clients;

     -    the attractiveness to clients of the Company's bartering services;

     -    changes  in costs  that the  Company  incurs  to  attract  and  retain
          clients;

     -    changes  in the  Company's  fees or the  fees of its  competitors  for
          bartering services;

     -    the introduction of new services by the Company or by its competitors;

     -    unexpected costs and delays relating to the expansion of the Company's
          operations;

     -    the occurrence of technical difficulties and system downtime; and

     -    general economic and market conditions.



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<PAGE>


The  Company   does  not  believe  its  revenue  will  be  subject  to  seasonal
fluctuations  as a result of general  patterns of retail  advertising and direct
marketing,  which are  typically  higher  during  the fourth  calendar  quarter.
Expenditures by the Company's clients may though tend to be cyclical, reflecting
overall  economic  conditions,  client  buying  patterns and changing  marketing
strategies.

As a result of the above factors,  revenues and operating  results are difficult
to forecast, and you should not rely on period-to-period  comparisons of results
of operations as an indication of the Company's future performance.  The Company
may incur a significant  shortfall in revenues in relation to its  expectations.
In addition,  in future periods the Company's  operating  results may fall below
the expectations of public market analysts and investors. Should this occur, the
market price of the Company's common stock would likely decline.

PART II -OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

(1) During the quarter ended June 30, 1999,  "E" warrants were  exercised at the
exercise price of $1.50 per share.  These  issuances of common stock  underlying
the warrants were exempt from registration  under the provisions of Section 4(2)
of the Securities Act and or Rule 506  promulgated  under the Securities Act. As
shareholders   and  warrant   holders,   these   individuals  and  entities  had
pre-existing relationships with the Company, had knowledge and information about
the  business  of the Company  and had access to  publicly  available  and other
information  about the Company.  These exercises of warrants did not involve the
use of general solicitation or advertising.

(2) In May 1999,  the  Company  issued  20,000  shares  of  common  stock to two
individuals as consideration,  in part, for the acquisition of BBE Windsor, Inc.
The issuance of the shares was exempt from registration  under the provisions of
Section  4(2) of the  Securities  Act.  The  shares  were  issued  in a  private
placement not involving a public offering.

(3)Pursuant to the Company's  1988 Stock Option Plan, the Company  granted stock
options to certain  employees  to purchase  an  aggregate  of 135,000  shares of
common  stock at an  exercise  price of $4.88 per share.  The  granting of stock
options did not require registration under the Securities Act.

Item  6.  Exhibits and Reports on Form 8-K

Exhibit 27.  Financial Data Schedule

No reports on Form 8-K were filed during the three months ended June 30, 1999.



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<PAGE>


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                   UBARTER.COM INC.

August 16, 1999                    /s/ Steven M. White
                                   --------------------------------------------
                                   President and CEO

                                   /s/ Kevin R. Andersen
                                   --------------------------------------------
                                   Kevin R. Andersen
                                   Chief Financial Officer












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