<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q



  X      Quarterly report pursuant to section 13 or 15(d) of the Securities
-----                                                            ----------
         Exchange Act of 1934 for the quarterly period ended 31 July 1999 ("Q2",
         --------------------
         "Second Quarter" or "Quarter 2 of Fiscal 2000"), or

_____    Transition report pursuant to section 13 or 15(d) of the Securities
                                                                  ----------
         Exchange Act of 1934 for the Transition period from __________ to
         --------------------
         __________.

        -----------------------------------------------------------------------
          Commission file number   0-18163     CUSIP number       693501 10 8
        -----------------------------------------------------------------------


                             Power Plus Corporation

             (Exact Name of Registrant as Specified in its Charter)

  (the "Registrant", or the "Company", or the "Corporation", or "Power Plus")


        ------------------------------------------------------------------------
          Province of Alberta, Canada
          (State or other jurisdiction of incorporation)

          7850 Woodbine Avenue, Suite 201,
          Markham, Ontario, Canada                                     L3R 0B9
          (Address of principal executive offices)                 (Postal Code)

          905-479-5683
          800-769-3733                                             905-479-8911
          (Telephone numbers)                                       (Fax number)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by ss.13 or ss.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 __  No X
                                              -

As of 31 August 1999, there were 16,913,389 common shares of the Registrant's
common stock (the "Common Shares" or "Common Stock") outstanding. (See ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of
--------------------------------------------------------------------------
Operations.)
----------
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                         Page 2


                                   FORM 10-Q

                                     INDEX

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Interim Financial Statements                             3

          Consolidated Statement of Operations
             for the periods ended 31 July 1999 and 1998

          Consolidated Balance Sheet as at 31 July 1999 and 31 January 1999

          Consolidated Statement of Changes in Financial Position
             for the periods ended 31 July 1999 and 1998

          Notes to Consolidated Financial Statements

Item 2. Management's Discussion and Analysis of                               8

          Financial Condition and Results of Operations



PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                    16

Item 2. Changes in Securities                                                16

Item 3. Defaults Upon Senior Securities                                      16

Item 4. Submission of Matters to a Vote of Security Holders                  16

Item 5. Other Information                                                    16

Item 6. Exhibits and Reports on Form 8-K                                     16

Signature                                                                    17
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                         Page 3


                         Part I - Financial Information

The Company prepares its consolidated financial statements in Canadian Dollars.
In this report all references to "$" are to Canadian dollars, unless otherwise
noted.

                                 Exchange Rates

Based on the noon buying rates for cable transfers in New York City, certified
for customs purposes by the Federal Reserve Bank of New York, the exchange rate
on 31 August 1999 was Canadian$1.00 : US$0.67.


Item 1.  Interim Financial Statements

                                 Second Quarter
                           (period ended 31 July 1999)
                                   Fiscal 2000

CONSOLIDATED STATEMENT OF OPERATIONS  (unaudited)

(Amounts are expressed in Canadian Dollars)
<TABLE>
<CAPTION>
                                                                      Three-month and year-to-date      Six-month and year-to-date
                                                                         period ended 31 July             period ended 31 July
                                                                -------------------------------------------------------------------
                                                                    1999                 1998             1999               1998
                                                                -------------------------------------------------------------------
<S>                                                             <C>               <C>                <C>               <C>
Interest revenue and sales - see Notes 1 & 5                     $    2,460       $    98,046           $    8,405      $   567,793
   Cost of sales                                                          0           115,358                    0          444,745
                                                                 ----------       -----------           ----------      -----------
   Gross profit                                                       2,460           (17,312)               8,405          123,048
Expenses
   Operating and administration                                     213,589          (427,582)             385,698        1,623,752
   Asset write-down - see Note 2                                          0           490,485                    0          490,485
   Financing charges payable in stock - see Note 5                   79,774           164,700              280,780          415,878
   Amortization                                                           0            63,915                    0          127,753
                                                                 ----------       -----------           -----------     -----------
(Loss) from operations                                             (290,903)         (308,831)            (658,073)      (2,534,821)
Non-cash gain on abandonment of subsidiary -- see Note 2                  0         2,899,033                    0        2,899,033
                                                                 ----------       -----------           ----------      -----------
Profit (Loss) for period                                           (290,903)        2,590,202             (658,073)         364,212
Deficit, beginning of period - see Note 3                         4,512,268        26,461,987            4,145,098       24,235,997
                                                                 ----------       -----------           ----------      -----------
Deficit, end of period                                           $4,803,171       $23,871,785           $4,803,171      $23,871,785
                                                                 ==========       ============          ==========      ===========

Earnings per share                                                   ($0.02)            $0.19               $(0.04)           $0.03
Weighted average common shares outstanding                       16,913,389        13,518,719           16,913,389       10,917,315
</TABLE>
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                         Page 4


     CONSOLIDATED BALANCE SHEETS  (unaudited)
        (Amounts are expressed in Canadian Dollars)
<TABLE>
<CAPTION>
                                                                               31 July 1999        31 January 1999
                                                                               ------------        ---------------
                                    Assets
     Current assets:
     <S>                                                                       <C>                 <C>
          Cash and cash equivalents                                             $    310,011         $    567,614
          Accounts and note receivable - see Note 4                                   34,955              488,270
          Prepaid expenses                                                                 0               14,400
                                                                                ------------         ------------
                                                                                $    344,966         $  1,070,284
                                                                                ============         ============
                                 Liabilities
     Current accounts payable and accrued liabilities                           $     59,192         $    210,206
                                                                                ------------         ------------
     Long-term liabilities
          Non-cash accrued liabilities and interest payable - see Note 5             779,489              619,939
          10% Convertible debentures payable - see Note 5                          3,191,000            3,191,000
                                                                                ------------         ------------
                                                                                   3,970,489            3,810,939
                                                                                ------------         ------------
                                                                                   4,029,681            4,021,145
                                                                                ------------         ------------
                          Shareholders' (deficiency)
     Share capital - see Note 6 Authorized at no par value:
              An unlimited number of common shares
              An unlimited number of preferred shares
          Issued: 16,913,389 common shares (1998 - 16,913,389)                     1,118,456            1,118,456
     Deficit - see Note 3                                                         (4,803,171)          (4,069,317)
                                                                                ------------         ------------
                                                                                  (3,684,715)          (2,950,861)
                                                                                ------------         ------------
                                                                                $    344,966         $  1,070,284
                                                                                ============         ============
</TABLE>
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                          FORM 10-Q
                                                   Second Quarter of Fiscal 2000
                                                                          Page 5


CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION  (unaudited)

(Amounts are expressed in Canadian Dollars)
<TABLE>
<CAPTION>
                                                                                            Six-month and year-to-date
                                                                                               Period ended 31 July
                                                                              ---------------------------------------------------
                                                                                           1999                        1998
                                                                              ---------------------------------------------------
Cash provided by (used in) operating activities
<S>                                                                           <C>                               <C>
 (Loss) for period                                                                   $ (658,073)                $(2,534,821)
 Items not affecting cash
   Asset write-down - see Note 2                                                              0                     490,485
   Financing charges payable in stock - see Note 5                                      280,780                     415,878
   Amortization                                                                               0                     127,753
                                                                                     ----------                 -----------
                                                                                       (377,293)                 (1,500,705)
 Changes in non cash operating items                                                    (39,858)                   (190,538)
                                                                                     ----------                 -----------
                                                                                       (417,151)                 (1,691,243)
                                                                                     ----------                 -----------
Cash provided by (used in) financing activities
  Non-cash accrued liabilities & interest payable - see Note 5                          159,548                           0
  10% Convertible debenture - see Note 5                                                      0                   1,000,000
                                                                                     ----------                 -----------
                                                                                        159,548                   1,000,000
                                                                                     ----------                 -----------
Cash provided by (used in) investing activities
 Sale of capital assets                                                                       0                     753,000
                                                                                     ----------                 -----------
Increase (decrease) in cash during period                                              (257,603)                     61,757
Cash, beginning of period                                                               567,614                     147,590
                                                                                     ----------                 -----------
Cash, end of period                                                                  $  310,011                 $   209,347
                                                                                     ==========                 ===========
</TABLE>

<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                          FORM 10-Q
                                                   Second Quarter of Fiscal 2000
                                                                          Page 6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1: The Consolidated Financial Statements are for the three-month and six
        months year-to-date periods ended 31 July 1999, pertaining to the
        current fiscal year ending 31 January 2000 ("Fiscal 2000"), and the
        corresponding period ended 31 July 1998, pertaining to the fiscal year
        ended 31 January 1999 ("Fiscal 1999"). Q2 -- Fiscal 2000 interim
        quarterly financial statements include the results of operations of the
        Company whereas Fiscal 1999 statements include the results of operations
        of Power Plus Corporation and its wholly owned subsidiaries Power Plus
        USA, Inc. ("PPUSA") and Power Plus Canada, Inc. ("PPCan") only for the
        period during Fiscal 1999 when they were operating under the Company's
        control. Accordingly, there are no assets or liabilities of these
        subsidiaries included in the balance sheets. (See Item 2 - Management
        Discussion and Analysis.)

        In the opinion of management, the Consolidated Balance Sheet as at 31
        July 1999 and the Consolidated Statements of Operations and Changes in
        Financial Position for the three-month and six months year-to-date
        periods ended 31 July 1999 and 1998, include all adjustments necessary
        for a fair presentation of such financial statements. Such adjustments
        consisted only of normal recurring items. The preparation of financial
        statements in conformity with generally accepted accounting principles
        requires management to make estimates and assumptions that affect the
        reported amounts of assets and liabilities at the date of the financial
        statements and the reported amounts of revenues and expenses during the
        reporting period. Actual results could differ from those estimated.
        Interim results are not necessarily indicative of results for a full
        year.

        The Consolidated Balance Sheet as at 31 July 1999 and the Consolidated
        Statements of Operations and Changes in Financial Position for the
        three-month and six months year-to-date periods ended 31 July 1999 and
        1998 are unaudited. The Consolidated Balance Sheet for Fiscal 1999 was
        audited and reported to shareholders (see the SEC FORM 10-K Registration
        Statement for Fiscal 1999, as previously filed). These interim quarterly
        Consolidated Financial Statements and Notes do not contain certain
        information included in the Company's Audited Annual Consolidated
        Financial Statements and the Notes thereto.

Note 2: On 31 January 1998, PPUSA made a voluntary assignment under Chapter 11
        of the US Bankruptcy code and, on 29 June 1998 certain assets of PPUSA
        were sold. On 8 May 1998, PPCan filed a Notice of Intention to Make a
                                                -----------------------------
        Proposal pursuant to (S)50.4(1) of the Bankruptcy and Insolvency Act
        --------                               -----------------------------
        Canada ("Proposal"). Effective 30 October 1998, the shares of PPCan were
        sold to Battery Plus Inc. ("BPI"), an arms'-length party, pursuant to
        the Proposal and with the approval of both creditors and the court. At
        the date of sale PPCan operated six stores and, accordingly, the Company
        operated no stores after the sale. The insolvency of PPUSA and sale of
        PPCan resulted from the Company's inability to continue funding start-up
        operations pending attaining critical mass and profitability.
        Accordingly, the comparative Fiscal 1999 interim financial statements
        reflected the write-down of assets in the amount of $490,485, the wind-
        up of PPUSA's operations, the reduction in PPCan's operations and a non-
        cash gain on the abandonment of PPUSA of $2,899,033, representing the
        effect of reversing its obligations to arm's length creditors, and
        reported such other accounting adjustments that are required to conform
        to generally accepted accounting principles applicable in the
        circumstances. The implementation of the Proposal, including the payment
        of the dividend from the fund to the creditors of PPCan, will have no
        future effect on the balance sheet of the Company. (See Item 2 -
        Management Discussion and Analysis.)

Note 3: The Company's shareholders approved at the annual general and special
        shareholder meeting held on 21 January 1999 a special resolution
        effective 31 January 1999 authorizing the reduction in the Company's
        stated capital pursuant to (S)36 of the Business Corporations Act
                                                -------------------------
        Alberta, by an amount up to but not to exceed $20,700,000. This
        reduction of stated capital was offset by a corresponding reduction of
        the shareholders' deficiency. It is management's opinion, after making
        the adjustment, that the balance sheet will more accurately represent
        the financial repositioning of the Company resulting from the
        reorganization and restructuring, and the appropriate current financial
        condition of the Company.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                          FORM 10-Q
                                                   Second Quarter of Fiscal 2000
                                                                          Page 7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited), continued

        The Company agreed to and was approved to pay a $121,230 finder's fee in
        respect of funds raised. This obligation is payable in 1,212,300 new
        post-conversion common shares on the basis of $0.10 per new common share
        and will be paid after the share consolidation has occurred. (See note
        6, below) Accrual of this non-cash cost of issue occurred in Q1 - Fiscal
        2000.

Note 4: Accounts and notes receivable of $74,955 represent the BPI secured
        promissory note that arose on the sale of PPCan. It is due in equal
        weekly installments through July 1999 and bears interest at 10% per
        annum.

Note 5: The private placement of a series of first secured and fixed and
        floating charge 10% convertible debentures ("1998 Debentures") in the
        maximum principal amount of up to $5,000,000, maturing on 31 January
        2000, bearing interest at a rate of 10% per annum, payable semi-annually
        in common shares having a deemed price of $0.85 each, and secured by way
        of a first fixed and floating charge against all the assets of the
        Company, was proposed and conditionally approved by shareholders,
        subject to regulatory approval. The 1998 Debentures were proposed to be
        convertible, in whole or in part, at the option of the holder, into
        units of the Company at a conversion price of $0.85 per unit, each unit
        to consist of one common share and one share purchase warrant. Pending
        proceeding with the 1998 Debentures, the Company, in the interim,
        executed promissory notes evidencing indebtedness in the aggregate
        principal amount of $3,191,000 of unsecured loans advanced to the
        Company and bearing interest on maturity at an annual rate of 10% (the
        "Unsecured Loan Notes"). As a result of market conditions, during Fiscal
        1999 the Company abandoned the 1998 Debentures. In its place, the
        Company created a debenture trust indenture (the "Debenture Trust
        Indenture") dated 30 September 1998, providing for the issuance of a
        series of 10% fixed and floating charge secured debentures in the
        principal sum not to exceed $5,000,000, due 31 January 2000 (the
        "Debentures"), and pledged all present and future debts, liabilities and
        obligations of the Company under the Debenture Trust Indenture. The
        Unsecured Loan Notes, by agreement with their holders, were replaced by
        the Debentures during Q4 -- Fiscal 1999. The Debentures are convertible,
        in whole or in part, on or before maturity, at the option of the holders
        into common shares of the Company at a conversion price equal to $0.10
        per new post-consolidation common share (see Note 6, below).

        Accrued non-cash interest payable for Q2 - Fiscal 2000 in the amount
        of $79,774 (to 31 January 1999 was $319,939) is payable in-kind at the
        time of repayment or by the issuance of common shares if converted at
        the option of the holders.

Note 6: The Company has received both regulator and shareholder approvals to
        consolidate the Company's issued and outstanding common shares. It is
        the intention of the Company to complete this 1 for 5 consolidation,
        from 16,913,389 Common Shares to 3,382,677 new post-consolidation common
        shares, during Q3 -- Fiscal 2000.

Note 7: Uncertainty due to the Year 2000 issue arises because many computerized
        systems use two digits rather than four to identify a year. Date-
        sensitive systems may recognize the Year 2000 as 1900 or some other
        date, resulting in errors when information using Year 2000 dates is
        processed. In addition, similar problems may arise in some systems which
        use certain dates in 1999 to represent something other than a date. The
        effects of the Year 2000 issue may be experienced before, on or after 1
        January 2000.

        The Company's operations are investment banking and administration, and
        it does not conduct business with customers nor is it particularly
        dependent on suppliers except utilities. The Company utilizes standard
        off-the-shelf widely used software provided by recognized companies that
        has been updated for Y2K issues. If the Year 2000 issue is not addressed
        by the Company's major suppliers and other third party business
        associates, the impact on the Company's operations and financial
        reporting may range from minor errors to significant systems failure
        which could affect the Company's ability to conduct normal business
        operations. It is not possible to be certain that all aspects of the
        Year 2000 issue affecting the Company, including those related to the
        efforts of suppliers or other third parties, will be fully resolved.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                          FORM 10-Q
                                                   Second Quarter of Fiscal 2000
                                                                          Page 8


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

A)  Corporate Overview

    Investing is the priority for Power Plus Corporation, a public company dual
    listed on The Alberta Stock Exchange in Canada and the Over-The-Counter
    ("OTC") Electronic Bulletin Board in the United States. The primary
    activities of the Company fall into two categories: investing in operating
    companies; and, carrying on business through subsidiary operating companies.
    Accordingly, Power Plus Corporation has been the parent of subsidiaries that
    hire employees, procure merchandise for resale, purchase or build capital
    assets and carry on specialty retail businesses operating in Canada and the
    US, primarily selling batteries and battery-related products, wireless
    telecommunications products and portable fashion electronics.

    The Company's earlier 1996 Reorganization Plan, PLAN 2000, was management's
    5-year business plan that prescribed how the Company proposed to roll out
    its Powerful Stuff specialty niche retail business throughout North America.
    PLAN 2000 incorporated a detailed financing plan setting out the framework
    for providing a total of $49.1 million over its initial 3 years. The
    timeliness and availability of this capital, which was being raised through
    the junior public capital markets in Canada, was critical to the success of
    PLAN 2000. This capital was vital to the Company's growth, but its
    availability was dependent upon macroeconomic factors outside the Company's
    control. The goal was critical mass, that point when adequate retail outlets
    were open, operational and achieving at least annualized breakeven cash
    flow-at which time the business could be financially self-sustaining.
    Beyond this, the projected cash flow from store profit could ultimately make
    the Company's growth internally funded.

    With the Company's biggest challenge being the availability of capital,
    management could not have foreseen the adversity represented by the
    devastation to the junior capital markets in Canada during 1997, afflicted
    with the BREX Resources mining scandal and infected by the decline of the
    Asian markets. These debilitating circumstances were exacerbated by the
    substantial devaluation of the Canadian against the US Dollar, especially
    critical in light of PLAN 2000's emphasis on US expansion and the burdensome
    appetite for US currency but whose capital was being raised in Canadian
    dollars.

    Despite management's best efforts to act responsibly during this period of
    uncertainty, these times ultimately called for strong preservation measures.
    Consequently, on 31 January 1998 PPUSA sought protection under Chapter 11 of
    the US Bankruptcy Code. PPUSA remained in possession of its assets. With no
           ---------------
    expectation of any short-term improvement in this crisis, the Company
    subsequently announced on 8 May 1998, that PPCan/1/ had also sought
    protection from creditors by filing a Proposal under the Bankruptcy and
                                                             --------------
    Insolvency Act Canada. PPCan remained in possession of its assets pending a
    --------------
    determination as to whether the operations could be refinanced or sold as a
    going concern.

    Despite the Company's efforts, the Canadian junior capital markets only
    continued to deteriorate, so the prospects of refinancing became
    unrealistic. As a result, on 29 June 1998, the Company realized its security
    pertaining to the indebtedness of PPUSA and foreclosed on its remaining
    assets and sold them, including its list of pager customers, and ceased
    carrying on business in the US. On 26 November 1998, the Company sold the
    shares of PPCan and certain related intellectual properties to an arm's-
    length third party that conducts a similar business in Canada. The sale was
    made pursuant to a share purchase agreement dated 30 October 1998, between
    the Company, as vendor, and BPI as purchaser.

    All of the Company's retail operations in Canada and the US had been
    conducted through PPCan and PPUSA and all of the capital assets employed in
    carrying on the retail business were owned by them. Accordingly, and as
    reported in the previously filed FORM 10-K Registration Statement for Fiscal
    1999, the

________________________

/1/ Since its acquisition in December 1988, PPCan, formerly 385729 Alberta Inc.,
    had been inactive and did not commence to carry on business until September
    1996.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                          FORM 10-Q
                                                   Second Quarter of Fiscal 2000
                                                                          Page 9

  Company no longer has any retail operations nor operating assets. The Company
  is currently undergoing reorganization, implementing its 1999 Reorganization
  Plan. In summary, the shareholders resolved as to the following matters:

  1.  To change the name of the Company to PPC Capital Corp;

  2.  To authorize the consolidation of the common shares of the Company on the
      basis of one (1) common share for each five (5) common shares heretofore
      outstanding;

  3.  To authorize a reduction of the stated capital of the Company by up to
      $20,700.000;

  4.  To authorize the conversion of secured debt of the Company in an amount of
      up to $5,000,000 into post-consolidation common shares of the Company at a
      conversion price of $0.10 per post-consolidation common share;

  5.  To authorize the conversion of certain other debts of the Company in an
      amount of up to $340,000 into post-consolidation common shares at a
      conversion price of $0.10 per post-consolidation share; and,

  6.  To approve the payment of a finder's fee in the amount of $121,230 by
      issuing up to 1,212,300 post-consolidation common shares at a conversion
      price of $0.10 per post-consolidation common share.

  While management cannot give any assurances as to the future outlook for the
  Company, conditional regulatory approval to the 1999 Reorganization Plan was
  granted on 29 April 1999 and over the next three months, the Company will be
  proceeding to implement its plan and seek a professional opinion as to the
  extent and applicability of the Company's substantial tax loss carry forwards.
  Upon implementation of the 1999 Reorganization Plan and finalization of the
  Company's tax opinion, management intends to aggressively pursue diversified
  investment opportunities targeting to maximize shareholder value. In
  management's opinion, the Company's tax loss carry forwards are expected to
  represent a significant asset/2/ for the Company which will be material in
  attracting a suitable candidate for purposes of restructuring its business
  affairs.

  In the circumstances of these reorganizational proceedings and as previously
  reported, The Alberta Stock Exchange conducted a review of the financial
  affairs of the Company to ascertain whether the Company was maintaining
  continued listing requirements. The Exchange determined that the Company,
  having divested what the Exchange considered to be substantially all of its
  operating assets, did not meet the continued listing requirements and,
  therefore, trading of the Company's shares was suspended at the close of
  business on 30 April 1999. The Company, however, is in no way impaired from
  continuing with its day-to-day operations, implementing the 1999
  Reorganization Plan and seeking out new investment opportunities. The trading
  in shares of Alberta issuers is typically halted for extended periods pending
  closure of transactions by way of reverse take-over. The Company has been
  allowed until 31 December 1999 to satisfy The Exchange that upon
  implementation of its 1999 Reorganization Plan it has resumed compliance with
  minimum listing requirements. Failure to comply within this reactivation
  period would result in the Company's shares being delisted from The Alberta
  Stock Exchange.

B)  Results of Operations
  1) Q2 - Fiscal 2000

     In accordance with foregoing, the Company continued in its role as an
     investment banker and, as previously reported, is currently seeking new
     investment opportunities. During Fiscal 2000 the Company did not own any
     active subsidiary companies. Conformably, the Company's interim financial
     statements for the quarterly and year-to-date periods in Fiscal 2000 report
     the revenue and expenses of the parent company's activities only and, that
     while the Company has positive working capital it has no long-term assets.
     Accordingly, comparison to prior years and in-depth discussion and analy

________________________
/2/ See Note 10 in the Notes to the audited Annual Consolidated Financial
    Statements, in the FORM 10-K - Fiscal 1999.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                          FORM 10-Q
                                                   Second Quarter of Fiscal 2000
                                                                         Page 10


     sis are meaningless and unwarranted. In the circumstances, therefore, these
     financial statements are not comparable to financial statements from
     previous periods. Notwithstanding, the following limited discussion and
     analysis should be read in conjunction with the previously filed audited
     Annual Consolidated Financial Statements and the Notes thereto contained in
     the SEC FORM 10K - Fiscal 1999 filing, representing the year ended 31
     January 1999.

     Consideration of Q2 business results for Fiscal 2000 and Fiscal 1999

     The following table highlights items reflected in the Company's unaudited
     consolidated statement of operations expressed as percentages of sales:
<TABLE>
<CAPTION>
                                                                         Expressed as a Percentage of Sales
                                                                               (period ended 31 July)
                                                         ---------------------------------------------------------------
                                                                    Three months              Six months year to date
                                                                1999            1998            1999            1998
                                                         ---------------------------------------------------------------
<S>                                                      <C>                    <C>            <C>              <C>
Cost of sales                                                   n/a                117.7%       n/a                 78.3%
Operating, occupancy & administrative expenses                    7053.6%          297.3%         4113.0%          468.1%
Net loss before non cash gain on windup                          10195.1%          315.0%         7353.6%          446.4%
</TABLE>

     The materiality of the operating results of the Company's subsidiaries that
     operated retail businesses compared to the business results of the parent
     company that operates as an investment banker, meant that measurement,
     reporting and comparison of business results historically focused on the
     retail operations that were materially more significant than the Company's
     investing activities. The significant change between periods reflects the
     significant transition of the Company's focus, as discussed above, effected
     by abandoning the US subsidiary and selling the Canadian subsidiary. The
     changes reported for Q1 & Q2 -- Fiscal 1999 reflected an unfavorable
     increase in cost of sales and decrease in gross profit, which resulted
     principally for these reasons:

     .  PPUSA was operated as a discontinued business since the beginning of
        Fiscal 1999 and until it ceased carrying on business in June 1998;

     .  during Fiscal 1999, PPCan retrenched and was operated on a pared-down
        basis, pending and until its sale in November 1998;

     .  the negative impact of establishing accounting reserves and adjustments
        to fair market values for inventory and capital assets carrying values
        were included in the Fiscal 1999 accounts in anticipation of the closure
        of PPUSA and sale of PPCan; and,

     .  the deteriorating gross profit and increasing diseconomy reflected the
        Company's inability to purchase merchandise inventory to sustain
        reasonable sales levels at the stores, in accordance with normal
        industry practice.

     Declining sales reported for Q1 & Q2 -- Fiscal 1999 meant store operating
     overhead was uneconomic because both the cost of direct labor and store
     rent, which were fixed costs incurred as long as a location was open, were
     too onerous, especially in light of the decreasing gross profit.

     The magnitude of reduction reported for Q1 & Q2 -- Fiscal 1999 in Operating
     and Administration Expenses was partially nullified by accounting
     adjustments for reserves made primarily to PPUSA's balance sheet in concert
     with its Chapter 11 filing and PPCan's balance sheet to reflect the fair
     market value of its assets. In addition, the professional fees for winding
     up PPUSA and the sale of PPCan, and termination/severance payments to
     employees were incurred therewith.

     Accordingly, Q2 -- Fiscal 1999 Consolidated Financial Statements include
     the accounts of the Company, PPUSA and PPCan, and report the results of the
     discontinued and sold operations. All significant intercompany accounts and
     transactions between the Company and the subsidiaries were eliminated.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                          FORM 10-Q
                                                   Second Quarter of Fiscal 2000
                                                                         Page 11

     No corporate income taxes were payable in Q2 -- Fiscal 2000. Management
     expects the amount of accrued income tax losses, being carried forward and
     available for sheltering future business income accruing from Fiscal 1999,
     approximates $22 million, and is not reported in the Consolidated Balance
     Sheet./3/

2)   Q2 -- Fiscal 1999

     The Company began Fiscal 1999 in a precarious posture. PPUSA was operating
     under Chapter 11 and PPCan was seriously underfunded. As the Canadian
     junior capital markets continued to deteriorate, the prospects of
     refinancing the Company's subsidiaries became unrealistic. As a result, on
     29 June 1998, the Company realized its security pertaining to the
     indebtedness of PPUSA and foreclosed on the remaining assets of PPUSA and
     sold them, including its list of pager customers. The remaining capital
     assets of PPUSA, consisting primarily of store fixtures and leasehold
     improvements, were abandoned where situated in various locations to offset
     existing liabilities to landlords. PPUSA, discharged from its Chapter 11
     Petition, ceased carrying on business.

     On 26 November 1998, the Company sold its shares of PPCan and certain
     related intellectual properties to BPI pursuant to a share purchase
     agreement dated 30 October 1998. On 11 September 1998, the creditors of
     PPCan accepted the offer made to them under the Proposal and the required
     court approval was subsequently obtained by order dated 7 October 1998,
     satisfying certain pre-conditions to the sale to BPI. As a result of the
     Proposal and the completion of the sale to BPI, all claims of the creditors
     of PPCan as compromised were fully satisfied.

     All of the Company's retail operations in Canada and the US were conducted
     through PPCan and PPUSA and all of the capital assets employed in carrying
     on the retail business were owned by them. Accordingly, the Company as of
     30 October 1998 no longer had any retail operations or operating assets.

C)  Liquidity and Capital Resources

  The FORM 10-K Registration Statement for Fiscal 1999 includes more detailed
  discussion concerning changes to and arising from both the 1999 Reorganization
  Plan and the 1996 Reorganization Plan. All financing in accordance with the
  1996 Reorganization Plan concluded on 30 September 1998, commensurate with the
  expiring of the entitlements formerly attached to Warrants (see below). During
  Fiscal 1999, the Company converted both the Bridge Loan Notes and Special
  Notes into Common Shares. As well, the Notes to the Consolidated Financial
                                         -----------------------------------
  Statements (unaudited) included with these materials include particular
  ----------
  details pertaining to current activity. Please also see (S)5 -- Summary of
                                                                  ----------
  changes to shares and share capital, below.
  -----------------------------------

1)   1996 Special Warrant Private Placement Financing

     During Fiscal 1997, according to the 1996 Reorganization Plan, the Company
     completed the 1996 Special Warrant Private Placement Financing (the "1996
     Special Warrants") of $4.5 million representing an aggregate of 2.25
     million 1996 Special Warrants. Each 1996 Special Warrant was converted at
     no additional consideration into one Common Share on 31 January 1997, plus
     one Class B Warrant. This warrant consisted of two entitlements: firstly,
     entitling holders to acquire up to an aggregate of 2.25 million Common
     Shares; and, secondly, and subject to the exercise of the Class B Warrant,
     a collateral Class BB Warrant, entitling holders to acquire up to an
     aggregate of a further 2.25 million Common Shares. The 1996 Special Warrant
     financing terms provided that the Company would incur a 10% penalty payable
     by the issuance of 225,000 additional 1996 Special Warrants to the holders
     of the 1996 Special Warrants. The penalty was incurred. (See (S)3 and (S)5
     below for details about exercise, dilution and funds raised.)

_________________________
/3/  See Footnote 2, IBID.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                        Page 12

2)   Fiscal 1997 Share Capital Reorganization & Consolidation and Exchange
     Rights Entitlements

     The reorganization and consolidation of the Company's outstanding share
     capital, according to the 1996 Reorganization Plan. In general terms, the
     Company reorganized and consolidated all of its issued old shares (of which
     44,765,613 pre-consolidation shares/4/ had been issued and outstanding as
     of 1 November 1996) on the basis of every 20 old shares before
     consolidation being reorganized and consolidated into one consolidated
     Common Share (that is 2,238,281 post-consolidated Common Shares) and one
     Exchange Right. Under the terms of this consolidation, each consolidated
     Common Share had attached to it one exchange entitlement (the "Exchange
     Rights") to purchase one unit of the Company's equity (the "Exchange Rights
     Units") at an exercise price of $2.00 per unit on or before 31 January
     1997. Effective 31 January 1997, all the Exchange Rights were converted and
     the Company received $4,476,562 in new capital. Each Exchange Rights Unit
     consisted of one Common Share plus one purchase warrant, hereinafter
     referred to as the Class A Warrants. The Class A Warrants consisted of two
     entitlements: firstly, entitling holders to purchase 2,238,281 Common
     Shares; and, secondly, conditional upon the exercise of the Class A
     Warrant, a collateral warrant, the Class AA Warrant, that entitled holders
     to purchase up to an aggregate of a further 2,238,281 Common Shares of the
     Company. (See (S)3 & (S)5 below for more details concerning exercise,
     dilution and funds raised.)

3)   Approval of Amendment to Certain Terms of the Class A, AA, B and BB
     Warrants

     The Company obtained shareholder approval on 30 January 1998 to amend the
     conversion price of all outstanding warrants to $1.25 per common share and
     to extend the period of time for exercise of such outstanding warrants. All
     other terms and conditions remained the same. However, despite the best
     efforts of management, because of the ongoing degeneration of the junior
     capital markets no additional warrants were exercised and no additional
     capital was raised. Accordingly, all entitlements attributed to these
     warrants expired 30 September 1998.

4)   Special Notes convertible debt financing

     In March 1996, in accordance with the 1996 Reorganization Plan, the Company
     received approval for a $6 million 5-year 10% Special Note private
     placement offering which was subsequently increased by $5 million in June
     1997 to become $11 million 10% Special Notes. During Fiscal 1997, the
     Company completed a $6 million placement in two closings. Each $1,000
     principal amount of Special Notes was converted into an equivalent
     principal amount of 5-year 10% convertible fixed and floating secured
     debentures that were fully secured by all the assets of the Company.

     On 24 April 1998, the Company converted the $6 million Special Notes, plus
     accrued and unpaid interest thereon, into 5,080,767 Common Shares at $1.25
     per Common Share. (See (S)5 -- Summary of changes to shares and share
                                    --------------------------------------
     capital, below.)
     -------

______________________
/4/  All references in this FORM 10K are to Common Shares outstanding post-
     consolidation that occurred during Fiscal 1997.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                        Page 13


5)   Summary of changes to shares and share capital

     The table depicts the changes to share capital  following from the 1996
     Reorganization Plan and to the date hereof.

<TABLE>
<CAPTION>
                                                                                                    Shares       Capital      Timing
                                                                                                    ------       -------      ------
                                                                                                                    Completed
                                                                                                                    ---------
   ($ amounts are expressed in Canadian Dollars in millions; assumes maximum dilution)
<S>                                                                                                  <C>          <C>          <C>
   i    Consolidated, beginning share capitalization (from 44,765,613 shares on 20:1 basis):

        a.) Post-consolidation number of Common Shares                                                2,238,281     $0.0     FY 1997

        b.) Capital raised from Exchange Right Units that included Class A & AA Warrants:

            i) Exchange Rights Unit converted into 1 Common Share at $2.00 & 1 Class A Warrant        2,238,281     $4.5     FY 1997

           ii) Class A Warrants exercised to purchase 1 Common Share @ $2.00 and receive 1 Class AA
               Warrant (Balance of Class A Warrants expired unexercised.)                               197,456     $0.4     FY 1998

          iii) Class AA Warrants exercised to purchase 1 Common Share @ $2.50 (Balance of Class AA
               Warrants expired unexercised.)                                                             4,246     $0.0    FY 1998

           iv) Agent's Option to purchase 225,000 Common Shares at $2.00 and receive equal number
               of Agent's Option Class A Warrants                                                       225,000     $0.5    FY 1997

   ii 1996  Special Warrant Private Placement Financing

        a.)  Special Warrants for $2.00 that were exchanged during first quarter of Fiscal 1998 for
             Common Shares and an equivalent number of Class B Warrants                               2,250,000     $4.5    FY 1997

        b.)  Class B Warrants exercised to purchase one Common Share at $2.00 and receive one Class
             BB Warrant. (Balance of Class B Warrants and all Class BB Warrants issued expired
             unexercised.)                                                                              687,500     $1.3    FY 1998

        c.)  Penalty Special Warrants to receive 225,000 Common Shares at no cost  and  255,000
             Class B Penalty Warrants. (Exercised Class B Warrants included above.)                     225,000     $0.0    FY 1997

   iii Conversions of Debts into Common Shares at $1.25 per share

        a.)  $6 million - Special Notes (see (S).3(b)(v) - Special Notes convertible debt financing,
             above)                                                                                   5,080,767     $6.0    FY 1999

        b.)  $4.1 million - Bridge Loan Notes (see (S).3(a)(ii) - Financing actions and changes
             during Fiscal 1999, above)                                                               3,771,858     $4.1    FY 1999
                                                                                                     ----------
   v    Number of Shares, fully diluted (1) / Cash Capital Raised                                    16,913,389    $22.0
                                                                                                     ==========    =====
   vi   Convertible indebtedness - future potential dilution

        a.) $3  million - Secured  Debt (see (S).3(b)(I) - Conversion of Secured Debt, below)                              FY 2000
</TABLE>


   (1)  At the meeting of shareholders of the Company held on 30 January 1998,
        the shareholders of the Company approved the consolidation of the
        Company's issued and outstanding Common Shares on a ratio of 1 new
        common share for up to each 5 common shares outstanding. Subject to the
        approval of The Alberta Stock Exchange, it is the intention of the
        Company to complete this consolidation as soon as possible during Fiscal
        2000, with the result that the 16,913,389 Common Shares outstanding as
        at the record date would become 3,382,677 common shares.

6) Stated Capital Reduction

   As proposed in the 1999 Reorganization Plan, the Company's shareholders
   approved at the annual general and special shareholder meeting held on 21
   January 1999 a special resolution effective 31 January 1999 authorizing the
   reduction in the stated capital of the Company pursuant to (ss).36 of the
   Business Corporations Act Alberta, by reducing the stated capital of the
   -------------------------
   Common Shares by an amount up to but not to exceed $20,700,000. This
   reduction of stated capital of the Common Shares also reduced shareholders'
   deficiency by the same amount. It is management's opinion, after making the
   adjustment, that the balance sheet will more accurately represent the
   financial repositioning of the Company resulting from the reorganization and
   restructuring, and the appropriate current financial condition of the
   Company.
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                        Page 14

     A reduction of the stated capital will have no immediate tax consequences
     to a holder of Common Shares. The reduction of stated capital might have an
     effect, in certain circumstances, if the Company is wound up or makes a
     distribution to its shareholders, or when the Company redeems, cancels or
     acquires its Common Shares. As a general rule, upon such transactions, the
     holder of Common Shares will be deemed to have received a dividend to the
     extent that the amount paid or distributed exceeds these stated capital of
     its Common Shares.

7)   Consolidation of Share Capital

     At the special meeting of shareholders of the Company held on 30 January
     1998, the shareholders of the Company approved a resolution approving the
     consolidation of the Company's issued and outstanding common shares on a
     ratio of one new common share for up to each five common shares
     outstanding. In accordance with the 1999 Reorganization Plan, as approved
     at the 21 January 1999 meeting of the shareholders, and as approved by The
     Alberta Stock Exchange, it is the intention of the Company to complete this
     consolidation from the 16,913,389 common shares outstanding to 3,382,677
     post-consolidation common shares during Q3 -- Fiscal 2000.

8)   Conversion of Secured Debt

     i)  At the special meeting of shareholders held on 30 January 1998, the
         Company's shareholders approved, subject to regulatory approval, the
         private placement of a series of first secured and fixed and floating
         charge 10% convertible debentures ("1998 Debentures") in the maximum
         principal amount of up to $5,000,000. The 1998 Debentures were proposed
         to mature on 31 January 2000, bearing interest at a rate of 10% per
         annum, payable semi-annually in common shares having a deemed price of
         $0.85 each, and secured by way of a first fixed and floating charge
         against all the assets of the Company. The 1998 Debentures were
         proposed to be convertible, in whole or in part, at the option of the
         holder, into units of the Company at a conversion price of $0.85 per
         unit, each unit to consist of one common share and one share purchase
         warrant. Pending proceeding with the 1998 Debentures, the Company, in
         the interim, executed promissory notes evidencing indebtedness in the
         aggregate principal amount of $3,191,000 of unsecured loans advanced to
         the Company and bearing interest on maturity at an annual rate of 10%
         (the "Unsecured Loan Notes"). As a result of market conditions, the
         Company abandoned the 1998 Debentures. Subsequently, the Company
         created a debenture trust indenture (the "Debenture Trust Indenture")
         dated 30 September 1998, providing for the issuance of a series of 10%
         fixed and floating charge secured debentures in the principal sum not
         to exceed $5,000,000, due 31 January 2000 (the "Debentures"), and
         pledged all present and future debts, liabilities and obligations of
         the Company under the Debenture Trust Indenture. The Unsecured Loan
         Notes, by agreement with their holders, were replaced by the Debentures
         during Q4 -- Fiscal 1999. Management considered it desirable to provide
         for the convertibility of the Debentures, including all principal
         amounts advanced thereunder and interest accruing thereon, into Common
         Shares of the Company on the basis that the Debentures will be
         convertible, in whole or in part, on or before maturity, at the option
         of the holders, into common shares of the Company at a conversion price
         equal to $0.10 per post-consolidation common share (see (S)7 --
         Consolidation of Share Capital, above). In view of the fact that the
         ------------------------------
         possible aggregate issuance of Common Shares issuable upon conversion
         of the Debentures represents over 25% of the Company's Common Shares
         currently issued and outstanding, shareholder approval was obtained at
         the 21 January 1999 meeting of the shareholders. The required approval
         of The Alberta Stock Exchange was granted on 29 April 1999.

    ii)  At the special meeting of shareholders held on 30 January 1998, the
         Company's shareholders approved the implementation of a four-tiered
         revised corporate finance plan, including reasonable fiscal advisory
         and finder's fees and commissions. The Company and Roxborough Holdings
         Limited (the "Finder") agreed to a finder's fee arrangement (the
         "Finder's Fee Agreement") in respect of funds raised through the
         efforts of the Finder, pursuant to which the Company has accrued
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                        Page 15

         that will pay the Finder a fee equal to 10% of the first $300,000 of
         funds raised, and thereafter 7.5% of funds raised between $300,000 and
         $1,000,000, and 5% of funds raised over $1,000,000. To date the Finder
         arranged funds of $3,191,000, pursuant to which the Company is
         obligated to pay the Finder a fee of $121,230 (the "Finder's Fee").
         Management obtained the approval of the shareholders at the meeting of
         shareholders held on 21 January 1999, and subsequent regulatory
         approval, to pay the Finder's Fee in full by converting it into post-
         consolidation common shares of the Company on the basis of a conversion
         price of $0.10 per post-consolidation share, or 1,212,300 post-
         consolidation common (see (S)7 -- Consolidation of Share Capital,
                                           ------------------------------
         above). The accrual of the non-cash cost of issue was made in Q1 -
         Fiscal 2000.


  The Company has neither any share purchase warrants, nor options to purchase
  shares granted to any officers, directors, employees, advisors or consultants
  to the Company, which remain or are outstanding as of the date hereof.

  Commencing in Fiscal 1996, all securities, including the Special Notes that
  were converted into Common Shares, were sold by private placement to
  accredited investors in Canada. These securities were issued pursuant to the
  governing securities laws in the applicable governing jurisdictions in Canada
  but were not registered or sold principally in the US. Sales of the securities
  in the US were made in reliance upon the exemption from registration contained
  in (S)4(2) of the Securities Act of 1933, as amended.
                    ----------------------
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                        Page 16


                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

         The following summarizes, to the best of management's knowledge,
         potential, pending or known legal proceedings and litigation, arising
         primarily from transactions between third parties and one or both of
         PPUSA and PPCan, in all considered ordinary routine litigation
         incidental to the business.

         a)  CDA Industries Inc., a Canadian company and manufacturer and
             supplier of store fixtures, commenced an action in the Ontario
             Court against the Company for the payment of alleged unpaid amounts
             due from either or both PPCan and PPUSA. The Company has disputed
             this claim considering it without merit and will vigorously defend
             it as required and advised.

         b)  PageMart Canada Limited, a Canadian company and former supplier of
             airtime to PPCan was sued by PPCan in the Ontario Court for non-
             performance. PageMart countersued the Company in response, alleging
             it was owed certain amounts for services rendered by it to PPCan
             and for breach of contract. The Company has disputed PageMart's
             claim considering it without merit, and will vigorously defend it
             as required and advised.

         c)  Management is informed of claims that may have been made against
             PPUSA in the United States, after PPUSA ceased carrying on
             business, by landlords pertaining to store premises leased by
             PPUSA. The details of these claims are undetermined as of the date
             hereof, and there is the possibility that collateral claims may
             have been made against the Company. The Company has retained US
             counsel to advise management and will take all steps necessary and
             required.

         In management's opinion, and to the best of its knowledge, none of
         these potential, pending or known routine legal proceedings are
         expected to have any material impact on future operating results or the
         financial condition of the Company.

Item 2.  Changes in Securities.
            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.
            None

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

         a.)  Exhibits

                 Exhibit 27  -- Financial data schedule

         b.)  Reports on Form 8-K

                 None
<PAGE>

[LOGO OF POWER PLUS CORPORATION APPEARS HERE]                         FORM 10-Q
                                                  Second Quarter of Fiscal 2000
                                                                        Page 17


                                   SIGNATURE


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.


                                    Power Plus Corporation


Date:  1 September 1999             /s/ R. Bruce Freeman
                                    --------------------------------
                                    R. Bruce Freeman
                                    Vice Chairman and Chief Financial Officer

                                    (Duly authorized officer of the Registrant
                                       and its chief financial officer)