SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D.C. 20549

                        Amendment 1 to
                          FORM 10-QSB

[x]     Quarterly Report Pursuant to Section 13 or 15(d)
Securities Exchange Act of 1934
for Quarterly Period Ended December 31, 2000

-OR-

[ ]     Transition Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from _________  to________

    Commission File Number                         000-22965


                 Pinnacle Resources, Inc.
--------------------------------------------------------------------
         (Exact name of registrant as specified in its charter)


        Wyoming                                   84-1414869
- --------------------------------------------------------------------
(State or other jurisdiction    (I.R.S. Employer Identification Number)
of incorporation or organization)

9600 E. Arapahoe Road, Suite 260, Englewood, Colorado       80112
- -------------------------------------------------------------------
       (Address of principal executive offices, Zip Code)


                       303-705-8600
--------------------------------------------------------------------
         (Registrant's telephone number, including area code)


Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 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 [   ]

The number of outstanding shares of the registrant's common stock,
        December 31, 2000:  Common Stock  -  14,241,500










<PAGE>2


PART I -- FINANCIAL INFORMATION                                   Page

Item 1. Financial Statements

Condensed consolidated balance sheet, December 31, 2000 (unaudited)  3
Condensed consolidated statements of operations
  for the six months ended December 31, 2000
  and 1999, and from January 6, 1995 (inception)
  through December 31, 2000 (unaudited) ....                         4
Condensed consolidated statements of cash flows
  for the six months ended December 31, 2000
  and 1999, and from January 6, 1995 (inception)
  through December 31, 2000 (unaudited).....                         5
Notes to condensed consolidated financial statements.................6



<PAGE>3

PINNACLE RESOURCES, INC.
(A Development Stage Company)
Condensed Consolidated Balance Sheet
(Unaudited)

December 31, 2000
<TABLE>
<CAPTION>
Assets
Current assets:
   <S>                                                                              <C>
   Cash                                                                        $     15,557
   Receivables, other                                                                27,370
                                                                               ------------
               Total current assets                                                  42,927

Equipment, net                                                                       69,993
Goodwill, net.(Note E)................................................                    -
                                                                               ------------
                                                                               $    112,920
                                                                               ============
Liabilities and Shareholders' Equity

   Current liabilities:
Accounts payable, trade.................................................    .. $     72,101
Line of credit..........................................................             49,984
Convertible debt (Note D)................................................            10,000
Notes payable.........................................................              100,000
Accrued interest payable.....................                                        14,730
Advances payable to shareholder and officer...........................            1,606,038
                                                                               ------------
               Total current liabilities                                          1,852,853
                                                                               ------------
Minority interest..................................................                     352

Shareholders' deficit (Note E):
Preferred stock                                                                           -
Common stock ....................................................................       102
   Outstanding stock options...................................................      47,165
   Additional paid in capital...............................................      2,080,752
   Deficit accumulated during development stage                                  (3,959,496)
   Cumulative translation adjustment.....                                            91,192
                                                                                 ----------
                Total shareholders' deficit                                      (1,740,285)
                                                                                -----------
                                                                                $   112,920
                                                                                ===========

</TABLE>

See accompanying notes to condensed consolidated financial statements


<PAGE>4


PINNACLE RESOURCES, INC.
(A Development Stage Company)

Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
                                                                                      January 6, 1995
                                                                                        (inception)
                                            Three Months Ended      Six Months Ended      through
                                               December 31,            December 31,       December 31,
                                          2000              1999    2000         1999        2000
                                          ----              -----   -----        ----      ---------
<S>                                       <C>                 <C>    <C>          <C>           <C>
Operating expenses:
Prospecting costs..............     . $   50,935           $ 3,992   $   61,830   $ 3,992     $1,080,625

Stock-based compensation (Note E)      1,471,540                 -    1,471,540         -      1,471,540

General and administrative                66,333            81,926      141,063    89,862        429,708
Legal and accounting fees                  1,657            24,993        4,502    28,615        181,453
Travel                                     4,142             8,836        4,727    11,584        172,179
Depreciation and amortization             21,767            25,926       60,822    34,568        157,166

Asset impairment charge (Note E)         337,535                 -      337,535         -        337,535

Foreign currency transaction loss              -                 -            -     1,489         42,770
                                      ----------        ----------   ----------   -------     ----------

Total operating expenses               1,953,909           145,673    2,082,019   170,110      3,872,976
                                      ----------        ----------   ----------   -------     ----------
Operating loss                        (1,953,909)         (145,673)  (2,082,019) (170,110)    (3,872,976)

Non-operating income (expense):
Write-down of notes receivable                 -                 -            -         -        (86,293)

Interest income                            1,465            47,500        2,968     3,040         55,939

Other income                                   -                 -        3,860         -          3,860
Interest expense                          (2,973)           (1,250)      (4,891)   (2,500)       (60,026)
                                    ------------       -----------  -----------  --------    -----------

Net loss before income taxes          (1,955,417)          (99,423)  (2,080,082) (169,570)    (3,959,496)

Income taxes (Note C)                          -                 -            -         -              -
                                    ------------       -----------  -----------  --------    -----------

Net loss                            $ (1,955,417)      $  (99,423) $(2,080,082) $(169,570)  $(3,959,496)
                                    ============       ===========  ===========  =========   ===========
Basic and diluted loss
   per common share                 $      (0.19)      $     (0.02) $     (0.25) $  (0.03)
                                    ============       ===========  ===========  ========
Basic and diluted weighted average
common shares outstanding             10,091,000         5,845,000    8,297,875  5,311,666
                                      ==========        ==========   ==========  =========

</TABLE>

See accompanying notes to condensed consolidated financial statements




<PAGE>5

PINNACLE RESOURCES, INC.
(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
                                                                                                    January 6, 1995
                                                                                                      (inception)
                                                               Six Months Ended                         through
                                                         December 31,     December 31,
                                                             2000           1999                         2000
                                                        -----------       ------------               --------------
<S>                                                       <C>                <C>                           <C>
Net cash used in operating activities                   $ (176,691)       $ (92,952)                $ (1,841,421)

Cash flows from investing activities:
  Cash received for sale of options to purchase
     interest in subsidiary                                      -                 -                       42,708
  Purchase of equipment                                     (3,034)                -                      (87,484)
  Advances made to related parties as notes receivable           -                 -                     (145,000)
  Proceeds from related parties from notes receivable            -           100,000                            -
  Purchase of subsidiary,  cash received                         -             1,151                        1,151
                                                        -----------        ---------                 -----------
Net cash provided by (used in) investing activities         (3,034)          101,151                     (188,625)

Cash flows from financing activities:

  Advances from officer/shareholder                         57,432                 -                    1,473,927
  Proceeds from loans and line of credit                    59,984                 -                      159,984
  Proceeds from sale of common stock                        33,000            47,500                      320,500
                                                        ----------         ---------                  -----------
  Net cash provided by financing activities                150,416            47,500                    1,954,411
                                                        ----------         ---------                  -----------
Cumulative translation adjustment                                -                 -                       91,192
                                                        ----------         ---------                  -----------
Net change in cash                                         (29,309)           55,697                       15,557

Cash, beginning                                             44,866               145                            -
                                                        ----------        ----------                  -----------
Cash, ending                                            $   15,557        $   55,842                  $    15,557
                                                        ==========        ==========                  ===========
Supplemental disclosure of cash flow information:
Cash paid for interest                                  $        -        $        -                   $        -
                                                        ----------        ----------                    ---------
Cash paid for income taxes                              $        -        $        -                   $        -
                                                        ----------        ----------                   ----------
Non-cash investing and financing transactions:
   Acquisition of subsidiary in exchange for 1,500,000
      shares of common stock                            $        -        $  375,000                   $  375,000
                                                        ----------        ----------                   ----------
   Acquisition of subsidiary in exchange for 4,000,000
      shares of common stock                            $2,000,000        $        -                   $2,000,000
                                                        ----------        ----------                   ----------
</TABLE>

See accompanying notes to condensed consolidated financial statements




<PAGE>6

PINNACLE RESOURCES, INC.
(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Note A:  Basis of presentation

The financial statements presented herein have been prepared by the
Company in accordance with the accounting policies in its Form 10-KSB
dated June 30, 2000 and filed October 13, 2000, and should be read in
conjunction with the notes thereto.

In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation
of operating results for the interim period presented have been made. The
results of operations for the periods presented are not necessarily
indicative of the results to be expected for the year.

Interim financial data presented herein are unaudited.

Note B:  Related party transactions

At June 30, 2000, the Company owed a Plateau shareholder $1,548,606 for
advances and related accrued interest. During the six months ended
December 31, 2000, advances and accrued interest increased the liability
to $1,552,360.  The shareholder has subordinated the loan in favor of the
creditors of Plateau until such time as the assets of Plateau, fairly
valued, exceed its liabilities.

Note C:  Income taxes

The Company records its income taxes in accordance with Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes".
The Company incurred net operating losses during the six months ended
December 31, 2000 resulting in a deferred tax asset, which was fully
allowed for; therefore, the net benefit and expense resulted in $-0-
income taxes.

Note D:  Convertible debt

During the three months ended December 31, 2000, the Company received
$10,000 in exchange for a convertible promissory note.  The note is
convertible to 5,000 shares of the Company's common stock at the option
of the lender.  The note carries an interest rate of ten percent and
matures on February 15, 2001.

Note E:   Changes in shareholders' equity for the six months ended
December 31, 2000
<TABLE>
<CAPTION>
                                      Common Stock         Outstanding     Additional                       Cumulative
                                 -----------------------     Stock          Paid-in      Accumulated       Translation
                                 Shares           Amount     Options       Capital        Deficit          Adjustment    Total
                                --------         --------   ------------   ---------    -------------       ---------    ------
<S>                               <C>              <C>           <C>            <C>         <C>             <C>
Balance, July 1, 2000            5,890,000       $    59     $      -     $  683,941     $(1,879,414)   $   91,192    $(1,104,222)

September 2000, issuance
   Of common stock at $.50
   Per share in exchange
     for Vanadium shares         4,000,000            40            -       (60,561)               -             -       (60,521)
October 2000, sale of
   Common stock at $2.00 per
   Share                            10,000             -            -         20,000               -             -         20,000
November 2000, sale of
   Common stock at $2.00 per
   Share                             6,500             -            -         13,000               -             -         13,000

November 2000, issuance of
   Common stock in exchange for
   Services, $5.00/share           250,000             3            -      1,249,997               -             -      1,250,000
November 200, issuance of
   Common stock in exchange for
   Services, $5.00/share            15,000             -            -         75,000               -             -         75,000
November 2000, stock options
   Granted to non-employee in
   Exchange for services                 -             -     47,165                -               -             -         47,165

<PAGE>7

PINNACLE RESOURCES, INC.
(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Note E:  continued

December 2000, issuance of
   Common stock in exchange for
   Services, $3.3125/share          30,000             -            -         99,375               -             -         99,375

Net loss for the six months
   Ended December 31, 2000               -              -           -              -      (2,080,082)            -     (2,080,082)
                                 ---------        -------   ---------      ---------       ---------     ---------      ---------
Balance, December 31, 2000      10,201,500        $   102   $  47,165     $2,080,752    $(3,959,496)     $ 91,192     $(1,740,285)
</TABLE>

Vanadium acquisition

On September 25, 2000, the Company purchased all of the outstanding
common stock of Vanadium and Magnetite Exploration & Development
Co.(S.A.) Proprietary Limited. (Vanadium), a South African corporation,
in exchange for 4,000,000 shares of the Company's common stock.

The Company has recorded the transaction as a purchase in accordance with
the Accounting Principles Board Opinion No. 16.  The accompanying
condensed, consolidated financial statements include the results of
operations of Vanadium from the date of acquisition through September 30,
2000.  The transaction was valued at $(60,521), or $(.015) per share
based on the book value of Vanadium's net liabilities, in accordance with
paragraph 26 of Accounting Principles Board Opinion No. 26.   Vanadium
was acquired from an independent and unaffiliated third party.   No
goodwill was recorded in the transaction

The following pro forma condensed, consolidated statements of operations
gives effect to the acquisition of Vanadium as if it occurred at the
beginning of the periods presented.  The pro forma condensed,
consolidated statements of operations are not necessarily indicative of
results of operations had the acquisition occurred at the beginning of
the periods presented, not the results to be expected in the future.

<TABLE>
<CAPTION>
Six months ended December 31, 2000
<S>                                <C>            <C>           <C>              <C>                <C>
                                Pinnacle        Plateau       Vanadium       Adjustments     Pro Forma Consolidated
Revenues                       $       -        $     -        $       -       $       -       $           -

Operating expenses             $  1,611,415     $  114,053     $    3,090      $       -       $  1,728,558
Operating loss                 $ (1,611,415)    $ (114,053)    $   (3,090)     $       -       $ (1,728,558)
Non-operating income
   And expenses                $     (2,306)    $      380     $        3      $       -       $      (1,923)
Net income                     $ (1,613,721)    $ (113,673)    $   (3,087)     $       -       $  (1,730,481)
                               ===========      ==========     ==========       ===========    =============

Basic and diluted loss per
   Common share                $      (0.20)     $  (18.47)     $   (0.77)                       $     (0.17)
                               ============     ==========      =========                        ===========

Basic and diluted weighted
  Average common shares
  Outstanding                   7,990,500            6,154          4,000                          9,990,500
                               ==========        =========        =======                        ===========
</TABLE>

There were no pro forma adjustments for the six months ended December
31, 2000
<TABLE>
<CAPTION>
Six months ended December 31, 1999
<S>                                <C>            <C>           <C>              <C>                <C>
                                Pinnacle        Plateau       Vanadium       Adjustments     Pro Forma Consolidated
Revenues                       $       -        $     -        $     -       $       -         $            -

Operating expenses             $   149,254      $   45,293     $     -       $       -         $      194,547
Operating loss                 $  (149,254)     $  (45,293)    $     -       $       -         $     (194,547)
Non-operating income
   And expenses                $    (1,032)     $       83     $     -       $       -         $         (949)

<PAGE>8

Net income                     $  (150,286)     $  (45,210)    $     -       $       -         $     (195,496)
                               ===========      ==========     =======       ===========       ==============
Basic and diluted loss per
   Common share                $          -     $   (11.30)     $    -                         $     (0.02)
                               ============     ==========      ======                         ===========

Basic and diluted weighted
  Average common shares
  Outstanding                   5,311,666            4,000        4,000                          9,478,333
                               ==========        =========      =======                        ===========
</TABLE>
There were no pro forma adjustments for the six months ended December 31,
1999.

During the six months ended December 31, 2000, the Company sold 16,500
shares of its common stock for $33,000, $2.00 per share.

During the six months ended December 31, 2000, the Company issued 250,000
shares of its common stock in exchange for financial consulting and
brokerage services.  On the date of the issuance the market price of the
stock was $5.00 per share.  As a result, the Company recognized a stock-
based compensation expense for the market value of the stock, $1,250,000.

During the six months ended December 31, 2000, the Company issued 15,000
shares of its common stock in exchange for finders fees related to the
search for additional corporate acquisitions.  On the date of the
issuance the market price of the stock was $5.00 per share.  As a result,
the Company recognized a stock-based compensation expense for the market
value of the stock, $75,000.

During the six months ended December 31, 2000, the Company issued 30,000
shares of its common stock in exchange for finders fees related to the
search for additional corporate acquisitions.  On the date of the
issuance the market price of the stock was $3.3125 per share.  As a
result, the Company recognized a stock-based compensation expense for the
market value of the stock, $99,375.

Stock options

Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" requires the use of the fair value based method
of accounting for stock issued to non-employees in exchange for services.

During the three months ended December 31, 2000, the Company granted
options to purchase 19,000 shares of common stock to a vendor in exchange
for brokerage and investor relations services.  The options were granted
with exercise prices below the market price of the common stock on the
date of grant.  The weighted average exercise price and weighted average
fair value of these options as of December 31, 2000 were $4.00 and $2.48,
respectively.

All stock options were fully vested on the date of grant.  The following
schedule summarizes the changes in the Company's outstanding stock
options:
<TABLE>
<CAPTION>
                                                            Options Outstanding and Exercisable
                                                            -----------------------------------     Weighted Average
                                                            Number of            Exercise Price      Exercise Price
                                                             Shares                Per Share           Per Share
                                                            ----------           --------------     ----------------
<S>                                                             <C>                    <C>                <C>
Balance at June 30, 2000                                             -            $           -       $          -
   Options granted                                              19,000            $        4.00       $       4.00
   Options exercised                                                 -            $           -       $          -
   Options canceled                                                  -            $           -       $          -
                                                               -------            -------------       ------------
Balance at December 31, 2000                                    19,000            $        4.00       $       4.00
                                                               =======            =============       ============
</TABLE>

The fair value for these options was estimated at the date of grant using
the Black-Scholes option-pricing model with the following assumptions:

    Risk-free interest rate                     5.78%
    Dividend yield                              0.00%
    Volatility factor                          50.00%
    Weighted average expected life              1 year

<PAGE>9

The Black-Scholes options valuation model was developed for use in
estimating the fair value of traded options, which have no vesting
restrictions and are fully transferable.  In addition, option valuation
models require the input of highly subjective assumptions including the
expected stock price volatility.  Because the Company's stock options
have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of
the fair value of its stock options.  However, the Company has presented
the pro forma net loss and pro forma basic and diluted loss per common
share using the assumptions noted above.

Impairment of Plateau goodwill

Pursuant of SFAS 121, the Company evaluated the recoverability of the
goodwill associated with the acquisition of Plateau Resources
(Proprietary) Limited ("Plateau").   Due to the lack of cash flows
resulting from the Plateau subsidiary and the uncertainties
surrounding estimated future undiscounted cash flows, the recorded
value of the goodwill exceeded its estimated fair value at December
31, 2000.   Accordingly, during the quarter ended December 31, 2000,
the Company wrote-down the goodwill to its estimated fair value of $-
0-, resulting in a non-cash impairment loss of $337,535 ($.03 and $.04
per share for the three and six months ended December 31, 2000,
respectively).   The estimated fair value was based on estimated
future undiscounted cash flows at the time of the write-down.



<PAGE>10

Item 2. Management's Discussion and Analysis or Plan of Operations

Trends and Uncertainties.   The financial statements have been prepared
assuming that the Company will continue as a going concern.   The
Company is in the development stage and has no operations as of June
30, 2000.   The deficiency in working capital as of June 30, 2000
raises substantial doubt about its ability to continue as a going
concern. In the course of its development activities the Company has
sustained continuing losses and expects such losses to continue for the
foreseeable future.   The Company's management plans on advancing funds
on an as needed basis and in the longer term to revenues from the
operations of which there is no assurance.   The Company's ability to
continue as a going concern is dependent on these additional management
advances, and, ultimately, upon achieving profitable operations.

Until revenues commence, the Company shall raise funds through equity
financing, which may or not be successful.   The Company has tried to
limit its general and administrative expenses.    The Company has
little or no control as to the demand for its services and, as a
result, inflation and changing prices could have a material effect on
the future profitability of the Company.

The Company will focus its financing and capital arrangement activities
on emerging growth companies, which plan to raise capital in the public
markets within a reasonable short period of time, i.e., one to two
years.   Although the Company will initially target small mining
companies due to its contacts in that industry, management has not
identified any particular industry within which the Company will focus
its efforts.   Rather, management intends to identify any number of
candidates, which may be brought to its attention through present
associations or by word-of-mouth.   Initially the Company intends to
arrange sources of funding and finance for its prospective clients
through established sources for such funds by acting as a finder or
broker to the lender and as an arranger or financial consultant to the
borrowing party.

In the emerging markets of South Africa and South America,
opportunities exist where small mining companies seek funding from
outside sources for capitalization because it is not available locally.

Management has over 70 years of combined business experience involving
a variety of situations where financing and/or funding has been
required in order to effectuate a mining opportunity.   Individually,
management personnel has directly funded, underwritten or brokered
financing for a number of mining prospects over the years, both in the
domestic market as well as South Africa and South America.

Management believes that the Company will be able to successfully seek
out potential candidates who are interested in obtaining loans from the
Company in the immediate future.   This belief is based upon the
perceived difficulty of many development and growth stage companies who
require additional financing, but are unable to obtain the same from
established sources, such as banking institutions and venture
capitalists.   As interest rates begin to rise, management anticipates
that those types of entities earmarked by the Company as possible
clients will continue to seek out the Company as a lending source, as
management views a potential borrower's borrowing base in a different
light than banks.   For loans made by regulated commercial lenders,
there is normally a structured review and evaluation of a prospective
borrower's loan application by the lender, including an in-depth review
of such application by a loan committee.   The loan committee will then
approve or reject each application as it is submitted.   The evaluation
and approval of loans depends on subjective factors and judgments, as
well as objective criteria, such as loan to value ratios and
independent appraisals, when appropriate or available.   The Company's
loan committee consists of substantially fewer persons than a
commercial lender and uses a less formal procedure than more
traditional lenders.   It is possible that any such subjective factors
and judgments may prove to be incorrect with a resulting loss of part
or all of the Company's investment in any particular loan.   However,
as part of the consideration provided to the Company for issuance of
its loans, the Company receives its interest and attempts to also
obtain additional consideration in the form of equity or options or
warrants in the borrower.   In the event the borrower's business plan
proves successful, the Company may receive substantial returns as a
result of this equity enhancement.



<PAGE>11

Most venture capitalists take an aggressive equity position far in
excess of that of the Company and in many instances, takes an active
role in the management of their clients.   Management believes that
this makes venture capitalists unattractive to those types of entities
with whom the Company does business.

The Company's ability to become a significant lender is impaired
primarily by its own lack of capital with which to make loans.   While
management would welcome the opportunity to make more loans for larger
amounts, management finds itself in the same predicament as that of its
prospective clients.  That is, the lack of capital with which to fully
implement the Company's business plan.    Management hopes that as the
Company begins to make successful loans, its track record will allow
the Company to attract either private investors seeking to invest in
the business of the Company on a private basis, or that the Company
will be able to attract an investment banker willing to underwrite a
secondary offering of the Company's securities to generate additional
capital.    There are no assurances that the Company will be able to
attract either of the aforesaid entities to increase the Company's
working capital.   If the Company is unable to obtain additional
working capital, it is unlikely that the Company will generate any
substantial growth in the near future.

Capital Resources and Source of Liquidity.    The Company currently has
no material commitments for capital expenditures.   The Company pays
$1,500 rent per month for its current office space.    An increase in
lease payments could have negative effect on the cash flow and
liquidity of the Company.

During October of 1999 the Company issued 1,500,000 common shares from
its treasury for the acquisition of 4,000 shares of Plateau Resources
(Pty) Ltd. which made Plateau a 100% wholly owned subsidiary of the
Company.

On October 1, 1999 the Company issued 195,000 shares of common
stock for cash of $97,500, or $.50 per share, resulting in net cash
flows from financing activities of $97,500.

The Company received a loan of $100,000 in March of 1998 and the
Company has renewed that loan until March 2001.  A loan of $75,000 was
made to Plateau Resources (Pty) Ltd in May of 1999 was repaid when the
Company closed on a Loan Facility Agreement with Anooraq Resources,
Inc. Another loan made September of 1998 to Asset Partners, Ltd in the
amount of $40,000 was written off even though the Company expects to
receive back the principal plus accrued interest in the up coming
physical year.  There is a narrow probability that third party funding
of Vanadium and Magnetite Exploration and Development (Pty) Ltd [VMED}
will be finalized in the short term and it is highly unlikely that the
Company will find a joint venture partner at any time in the near
future. This acquisition has caused a financial burden of
approximately US$7,500 per year for the Company and if the Company is
unsuccessful in meeting those financial obligations then an asset sale
of VMED would become a necessity.

At December 31, 2000, the Company had a negative working capital of
$(1,809,926) consisting $42,927 in current assets and $1,852,853 in
liabilities.  The Company has no long-term liabilities.



<PAGE>12

Results of Operations.   The Company expects to earn consulting fees,
commissions, brokerage points and equity participation for having acted
as an arranger and go-between from having effectuated a financing
package on behalf of a client and a funding source.

To date, the Company has not yet commenced operations or received any
revenues.   The Company had a net loss for the six months ended
December 31, 2000 of $2,082,019.   The Company had prospecting costs
of $61,830, stock-based compensation of $1,471,540, general and
administrative expenses of $141,063, legal and accounting fees of
$4,502, travel of $4,727, depreciation and amortization of $60,822 and
asset impairment charge of $377,535 for the six months ended December
31, 2000.

General and administrative expenses included professional fees of
$52,094, officer salaries of $16,500, telephone of $10,132,
administration fees of $10,000, office salaries of $8,474, operational
fees of $7,135, PR accommodation of $5,410, rent of 4,329, automobile
expense of $4,305, payroll taxes of $3,449, stock transfer of $2,401,
advertising of $2,270, payroll fees of $1,679, office supplies of
$1,660, printing and reproduction of $1,619, labor for e-mail access
of $1,518, postage and delivery of $1,459, financial and marketing
services of $1,283 and other miscellaneous expenses of $5,346.

The Company had a net loss for the six months ended December 31, 1999
of $169,570.   The Company had general and administrative expenses of
$89,862, legal and accounting fees of $28.615, travel of $11,584,
depreciation and amortization of $34.568 and foreign currency
transaction loss of $1.489 for the six months ended December 31, 2000.

Plan of Operation.    The Company is not delinquent on any of its
obligations even though the Company has not yet begun to generate
revenue.  The Company will identify and subsequently qualify
prospective clients.   Current operations require minimal cash
infusions.   The Company may borrow funds or obtain equity financing
from affiliated persons or entities to continue operations, if
necessary.   The Company intends to market its services utilizing cash
made available from the recent private sale of its Common Shares.   The
Company is of the opinion that revenues from its services along with
proceeds of the private sale of its securities will be sufficient to
pay its expenses until receipt of revenues at a level to sustain
operations.






<PAGE>13

PART II - OTHER INFORMATION

Item 1. Legal Proceedings. not applicable.
Item 2. Changes in Securities and Use of Proceeds. not applicable.
Item 3. Defaults Upon Senior Securities. not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
         not applicable.
Item 5. Other Information. not applicable.
Item 6. Exhibits and Reports on Form 8-K.

(a)   Reports on Form 8-K.
(b)   Exhibits. * Exhibit 27 - Financial Data Schedule

* A summary of any Exhibit is modified in its entirety by reference to
the actual Exhibit.






                  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 thereunto duly authorized.

Dated:   May 17, 2001

PINNACLE RESOURCES, INC
By: /s/ Glen R. Gamble
    -----------------------
    President and Director



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