<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 1997, 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      EDGAR Filing Number      000-18163
     CUSIP number             738908102      SEDAR Project Number      00004997
     --------------------------------------------------------------------------

                                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                                  52-1976897
     (STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER 
     INCORPORATION)                                    IDENTIFICATION NUMBER)
          
     7850 WOODBINE AVENUE, SUITE 201,                                L3R 0B9
     MARKHAM, ONTARIO, CANADA                                   (POSTAL CODE)
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)     

     905-479-5683                                               905-479-8911
     800-769-3733                                                (FAX NUMBER)
     (TELEPHONE NUMBERS) 
     --------------------------------------------------------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or Section 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    
                                                 ---            ---

As of 24 December 1997 there were 8,060,766 common shares of the Registrant's
Common Stock outstanding. (Please refer to Item 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS concerning the
reorganization and consolidation of the Company's stock on the basis of 20 
to 1.)

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         PAGE 2

                                 FORM 10-Q   INDEX
                                          
                                          
PART I - FINANCIAL INFORMATION


Item 1.   Consolidated Interim Financial Statements                         3

          Consolidated Statement of Changes in Financial Position  
               for the periods ended - 31 July 1997 and 31 July 1996

          Consolidated Balance Sheet - 31 July 1997 and 31 January 1997

          Consolidated Statement of Operations
               for the periods ended - 31 July 1997 and 31 July 1996

          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                                                18
Item 2.   Changes in Securities                                            18
Item 3.   Defaults Upon Senior Securities                                  18
Item 4.   Submission of Matters to a Vote of Security Holders              18
Item 5.   Other Information                                                19
Item 6.   Exhibits and Reports on Form 8-K                                 19

Signature                                                                  19

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         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 24 December 1997 was C$1.00 = US$0.70 


ITEM 1.   INTERIM FINANCIAL STATEMENTS.

                                   SECOND QUARTER
                            (period ended 31 July 1997)
                                    FISCAL 1998

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                               SIX-MONTH AND YEAR-TO-DATE
                                                                 THREE MONTHS ENDED 31 JULY       PERIOD ENDED 31 JULY
                                                                 --------------------------------------------------------
(AMOUNTS ARE EXPRESSED IN CANADIAN DOLLARS)                         1997          1996         1997              1996
                                                                 --------------------------------------------------------
<S>                                                              <C>            <C>            <C>            <C>       
SALES                                                            $2,078,459        $42,113     $4,817,977        $56,895
Cost of sales                                                     1,565,822         17,687      2,893,156         23,922
                                                                 ----------     ----------     ----------     ----------
Gross profit                                                        512,637         24,426      1,924,821         32,973
EXPENSES
   Operating and administration                                   4,078,778        834,199      7,794,044      1,304,175
   Amortization                                                     327,719         22,523        640,593         38,262
                                                                 ----------     ----------     ----------     ----------
(LOSS) FROM OPERATIONS                                           (3,893,860)      (832,296)    (6,509,816)    (1,309,464)

Deficit, beginning of period                                      7,826,215     26,670,824      5,210,259     26,193,656
                                                                 ----------     ----------     ----------     ----------
Deficit, BEFORE 31 JULY 1996 ADJUSTMENT BELOW                                   27,503,120                    27,503,120
      STATED CAPITAL REDUCTION, 31 JULY 1996 -  SEE NOTE 4                      26,670,824                    26,670,824
                                                                                ----------                    ----------
DEFICIT, END OF PERIOD                                          $11,720,075       $832,296    $11,720,075       $832,296
                                                                 ----------     ----------     ----------     ----------
                                                                 ----------     ----------     ----------     ----------

EARNINGS PER SHARE                                                $(0.51)        $(0.02)        $(1.10)        $(0.03)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - SEE NOTE 5          7,620,730     39,761,238      5,900,493     39,586,187
</TABLE>

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         PAGE 4

CONSOLIDATED BALANCE SHEET, AS AT

<TABLE>
<CAPTION>
(AMOUNTS ARE EXPRESSED IN CANADIAN DOLLARS)       31 JULY 1997   31 January 1997
                                                  ------------   ---------------
                                                   (unaudited)        (audited)
               ASSETS
<S>                                              <C>             <C>       
Current Assets
    Cash and cash equivalents                       $804,007     $4,341,243
    Accounts receivable                              297,172        202,319
    Inventory                                      2,314,022      1,809,529
    Prepaid expenses                                 739,142        395,849
                                                 -----------    -----------
                                                   4,154,343      6,748,940
Capital assets, net                                4,370,327      2,652,157
Deferred charges, net                                613,943        705,120
Other assets, net                                    928,047        937,637
                                                 -----------    -----------
                                                 $10,066,660    $11,043,854
                                                 -----------    -----------
                                                 -----------    -----------
            LIABILITIES

Current Liabilities
    Accounts payable and accrued liabilities      $3,704,057     $2,715,813
    Short-term notes payable  - SEE NOTE 6         2,500,000              0
                                                 -----------    -----------
                                                   6,204,057      2,715,813
Special Notes  - SEE NOTE 7                        4,880,000      4,740,000
                                                 -----------    -----------
                                                  11,084,057      7,455,813
                                                 -----------    -----------
        SHAREHOLDERS' EQUITY

Share capital and warrants                         9,302,678      7,398,300
Convertible component of Special Notes             1,400,000      1,400,000
Deficit                                          (11,720,075)    (5,210,259)
                                                 -----------    -----------
                                                  (1,017,397)     3,588,041
                                                 -----------    -----------
                                                 $10,066,660    $11,043,854
                                                 -----------    -----------
                                                 -----------    -----------
</TABLE>

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         PAGE 5

CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION (UNAUDITED)

<TABLE>
<CAPTION>
                                                     SIX MONTHS YEAR TO DATE
                                                      PERIOD ENDED 31 JULY
                                                 ----------------------------
(AMOUNTS ARE EXPRESSED IN CANADIAN DOLLARS)             1997           1996
                                                 ----------------------------
<S>                                              <C>            <C>        
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    (Loss) for period                            $(6,509,815)   $(1,309,464)
    Items not affecting cash
       Amortization                                  500,593         38,262
                                                 -----------    -----------
                                                  (6,009,222)    (1,271,202)
    CHANGES IN NON CASH OPERATING ITEMS
       Accounts receivable                           (94,853)      (143,889)
       Inventory                                    (504,493)      (112,321)
       Prepaid expenses                             (343,293)             0
       Accounts payable and accrued liabilities      988,244         89,089
                                                 -----------    -----------
                                                  (5,963,617)    (1,438,323)
                                                 -----------    -----------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
       Issue of common shares and warrants         1,904,378      2,506,000
       Notes payable                               2,500,000              0
       Issue of Special Notes                        140,000      3,050,000
                                                 -----------    -----------
                                                   4,544,378      5,556,000
                                                 -----------    -----------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                     
    Purchase of capital assets                    (2,117,997)      (178,000)
    Purchase of deferred assets                            0       (539,087)
    Purchase of other assets                               0        (82,500)
                                                 -----------    -----------
                                                  (2,117,997)      (799,587)
                                                 -----------    -----------

INCREASE (DECREASE) DURING PERIOD                 (3,537,236)     3,318,090
Cash and cash equivalents, beginning of period     4,341,243          1,288
                                                 -----------    -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD            $804,007     $3,319,378
                                                 -----------    -----------
                                                 -----------    -----------
</TABLE>

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         PAGE 6

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1:   The Consolidated Financial Statements are for the three-month and
          six-month year-to-date periods ended 31 July 1997 pertaining to the
          current fiscal year ending 31 January 1998 ("Fiscal 1998"), and the
          three-month and six-month year-to-date periods ended 31 July 1996
          pertaining to the fiscal year ended 31 January 1997 ("Fiscal 1997"),
          and include the results of operations of Power Plus Corporation and
          its wholly-owned subsidiaries Power Plus USA, Inc., Power Plus Canada,
          Inc. and First Olympia Holdings Inc. (collectively, the "Company").

NOTE 2:   During Fiscal 1997, management developed a reorganization plan with
          the intent of rebuilding operations, including a financing plan and
          statutory Plan of Arrangement (collectively, the "Reorganization
          Plan"), which received the requisite approvals from the shareholders,
          regulators and court and is now being implemented.  Accordingly, the
          comparative results of operations for last year were presented on the
          basis that the Company had recommenced operations although it only
          operated one store for the first half of Fiscal 1997.  (See Item 2. --
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS herein.) 

NOTE 3:   In the opinion of management, the Consolidated Balance Sheet as at 31
          July 1997 and the Consolidated Statements of Operations and Changes in
          Financial Position for the three-month and six-month year-to-date
          periods ended 31 July 1997 and 1996, 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 1997 and the Consolidated
          Statements of Operations and Changes in Financial Position for the
          three-month and six-month year-to-date periods ended 31 July 1997 and
          1996 are unaudited.  The Consolidated Balance Sheet for Fiscal 1997
          was audited and reported in the Company's Annual Report to
          Shareholders and the related annual SEC FORM 10-K report.

          The Consolidated Financial Statements and notes are presented in
          accordance with the SEC's FORM 10-Q quarterly report filing
          requirements, and do not contain certain information included in the
          Company's annual consolidated financial statements and the notes
          thereto.

NOTE 4:   In accordance with the Reorganization Plan, effective 31 July 1996 the
          Company reduced both the stated capital amount recorded for its common
          shares and the accumulated deficit in earnings, each by $26,670,824. 
          Management is of the opinion that, after making the adjustment, the
          balance sheet better represents the financial repositioning of the
          Company resulting from the reorganization and restructuring, and the
          appropriate current financial condition of the Company as it proceeds
          to implement its 5-year business plan.  (See Item 2. -- MANAGEMENT'S
          DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS, herein.) 

          The Opening Deficit of $7,826,215 reported for the period ended 31 
          July 1997 already reflects the effect of the stated capital 
          reduction, whereas the amount reported as at 30 April 1996 of 
          $26,670,824 does not.  This latter amount was the amount of the 
          stated capital reduction.


<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         PAGE 7

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) -- continued 

NOTE 5:   Loss per Share is based on the weighted average common shares
          outstanding for the period.  The comparative Loss per Share and
          weighted average shares outstanding for last year were restated to
          reflect the 20:1 reverse-split which was effective 1 November 1996.

NOTE 6:   Short-term notes payable are unsecured demand notes due 31 January
          1998, with interest accruing thereon at 10% per annum, payable in
          arrears on repayment. The short-term noteholders have agreed that,
          subject to shareholder and regulatory approval, the payment of any and
          all debts and sums of money due and owing under the short-term notes
          shall be paid in full and converted into common shares of the Company
          on the basis of a conversion price of $1.25 per common share. 

          A Special Meeting of common shareholders has been called for 30
          January 1998 for the purpose of, amongst other matters, approving this
          conversion of indebtedness into common shares with force and effect as
          of 31 January 1998. The result of such approval, representing some 3.5
          million shares in additional dilution, would eliminate this
          indebtedness prior to the end of the current annual fiscal period and
          the Company's obligations to pay future interest.

NOTE 7:   The Company completed a $6 million Special Notes 5-year, 10%
          convertible fixed and floating charge debentures private placement
          debt financing during Fiscal 1997, in accordance with the Company's
          Financing Plan incorporated in its Reorganization Plan.  The terms of
          the Special Notes provide that they are convertible, in whole or in
          part, into common shares of the Company at any time, at $2.50 per
          common share, representing potential future dilution of up to 2.4
          million common shares, and are secured by all the assets of Power Plus
          Corporation. 

          Notwithstanding the original terms of the Special Notes and underlying
          Debentures, the Special Note holders have agreed that, subject to
          shareholder and regulatory approval, the payment of any and all debts
          and sums of money due and owing under the Special Notes shall be paid
          in full and converted into common shares of the Company on the basis
          of a conversion price of $1.25 per common share. A Special Meeting of
          common shareholders has been called for 30 January 1998 for the
          purpose of, amongst other matters, approving this conversion of
          indebtedness into common shares with force and effect as of 31 January
          1998. The result of such approval, representing some 5.0 million
          shares in additional dilution, would eliminate this indebtedness prior
          to the end of the current annual fiscal period and the Company's
          obligations to pay future interest.

          In the opinion of management, the convertible feature of the Special
          Notes had an assignable fair value of $1.4 million at the date of
          issuance, which amount has been classified as a component of
          shareholders' equity.  Correspondingly, the liability component of the
          Special Notes, which had an assignable fair value of $4.6 million at
          the date of issuance and the difference between this amount and their
          face value is being amortized on a straight-line basis over their
          term, is currently $4,880,000.  Amortization for this Quarter amounted
          to $70,000.

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         PAGE 8

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

1.)  CORPORATE OVERVIEW

This interim financial report covers the three-month and six-month year-to-date
periods ended 31 July 1997, the Second Quarter of Fiscal 1998.  The Company's
business plan and operating strategy for the future positions POWERFUL STUFF to
be: The Retail Leader in Innovative Portable Lifestyle Communication and
Entertainment Technology.  In working to establish its distinctive retail
identity, POWERFUL STUFF seeks to be the first in the retail marketplace to
capture the lucrative and untapped ELECTRONICS LIFESTYLE youth market ... the 15
- 25 year olds who define the trends and want the neatest, coolest, hottest
stuff.  POWERFUL STUFF'S marketing strategy is to position stores primarily in
major regional malls, in sync with where the primary core customer, the 15 - 25
year old, and the secondary customer, the 25 - 30 year old, spend their time and
disposable income. The Company's core customer group, teenagers, is growing
nearly twice as fast as the general population and is expected to number some 30
million in the US by the Year 2005 -- teens hanging out in malls, each spending
$3,000 a year on average.  Teens make nearly 40% more trips to the malls than
other shoppers, spend more time in malls than other age groups, and spend an
average of $38.55 per trip to the mall.

The Company projects, subject to availability of financing, 1000+ compact
POWERFUL STUFF stores, of which approximately 75% are planned to be kiosks
averaging 150 sq. ft., and 25% inline stores averaging 500 sq. ft.  With the
average store of 300 sq. ft. initially projected at annualized sales of
$400,000, Power Plus anticipates its business can grow to  the 1000 store
threshold, representing only some 300,000 sq. ft. in the aggregate under
management, and produce $500+ million in annual sales, with the potential to
generate substantial after-tax profit.

The Company's rollout plan is founded in the clustering of POWERFUL STUFF stores
in geographic markets, developing District marketing clusters within Regions. 
At maturity, the Company expects to be throughout 7 North American Regions --
the Southeast, Mid-Atlantic, Northeast, North Central, Northwest, Southwest and
South Central Regions.  The typical Region is planned to be 160 stores comprised
of an average of 8 District clusters at some 20 or so stores per District.  A
typical District will open with a minimum of 5 stores and grow to 20. A District
Manager -- a retailing expert responsible for a PROFIT CENTER that may produce
more than $7 million in annual sales -- can then be responsible for the growing
operations and performance of between 5 and 20 stores.

The biggest challenge facing the Company, however, in its drive to achieve its
goals and objectives, is in the timing and availability of financing.  With 44
stores now open, the Company had a revised target earlier this year, modified
from original plan, to be 125+ stores by the end of the fiscal year, but further
prejudicial delays in completing planned financings finally resulted in no
further expansion being possible this year.  Future expansion remains contingent
upon the availability and timing of funds, the receipt of which cannot be
assured.  Without future expansion, the Company cannot expect to attain critical
mass and thus break even on an annualized basis.  Until then, the Company
remains dependent upon the raising of external capital -- and when the timing
and availability of financing deviates materially from the assumptions in the
Company's business plan, the overall business and sales are impacted and
adjustments must be made.  


<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                         PAGE 9

Accordingly, management must be flexible and act responsibly during this period,
and be responsive to those matters which it controls, including the pace and
timing of the rollout of new stores and the commitments made to merchandise
inventory.

The Company's original Financing Plan, forming part of its 1996 Reorganization
Plan and incorporated in its 5-year business plan, PLAN 2000, provided the
initial framework to raise up to $41.1 million in an orderly manner as needed
over the first three years of the Plan.  During the first year, 1996, $15.4
million was received as expected, but later than planned. This year, faced with
unforeseen adverse junior capital markets, the Company has encountered
difficulty raising all of the capital that it had forecasted on the time-lines
projected, resulting in management finally having to abort its expansion plans
for this year. 

Therefore, in an effort to satisfy the Corporation's ongoing financial needs for
general working capital and to continue the implementation of the proposed roll
out of new store and kiosk locations under the banner of the "POWERFUL STUFF"
chain of stores, the Corporation is proposing to implement, subject to
shareholder and final regulatory approval, a four-tiered revised corporate
finance plan conceived to potentially raise up to $31 million in the aggregate
over the next two years.

a.        Firstly, the Corporation expects to obtain regulatory approval to
          complete a private placement of up to and including 5,882,353 special
          warrants (the "Special Warrants") of the Corporation having a purchase
          price of $0.85 per Special Warrant, or an aggregate amount of
          $5,000,000, including reasonable fiscal advisory and finders' fees and
          commissions.

b.        Secondly, the Corporation is seeking regulatory approval to issue a
          series of $5,000,000 10% convertible first fixed and floating charge
          secured debentures (the "1998 Debentures").

          Pursuant to an extraordinary resolution of the holders of $6,000,000
          10% convertible fixed and floating charge secured special promissory
          notes (the "1996 Special Notes"), the holders of 1996 Special Notes
          agreed to subordinate their rights to the payment of the Corporation's
          obligations to the holders of 1998 Debentures.  See "Amendment to
          Terms of 1996 Special Notes".

          The 1998 Debentures shall bear interest at a rate of 10% per annum,
          which interest is payable semi-annually in common shares of the
          Corporation at a deemed price of $0.85 per common share.  The 1998
          Debentures will be convertible into units at the option of the holder
          at a price of $0.85 per unit.  Each unit shall consist of one common
          share and a share purchase warrant.  Each such warrant will entitle
          the holder to purchase one additional common share at a price of $0.90
          within two years from the date such warrant is issued.
                              
          The Corporation shall also have a right to compel holders to convert
          all or part of their 1998 Debentures, in certain specific
          circumstances.  See "Private Placement - First Secured Debentures".

c.        Thirdly, the Corporation is seeking regulatory approval to amend the
          conversion price of the 1996 Debentures underlying the 1996 Special
          Notes from $2.50 per 

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 10

          common share to $1.25 per common share.  See "Amendment to Terms of
          1996 Special Notes".

d.        Fourthly, in order to ensure that the exercise price of the previously
          issued and outstanding Class A Warrants, Class B Warrants, Class AA
          Warrants and Class BB Warrants of the Corporation have a conversion,
          price comparable to that of the 1996 Special Notes, the Corporation is
          seeking regulatory approval to amend the conversion price of all such
          outstanding warrants to $1.25 per common share and to extend the
          period of time for exercise of such outstanding warrants.  See
          "Amendments to Class A Warrants, Class AA Warrants, Class B Warrants
          and Class BB Warrants.".

The following table represents the potential impact on the availability of
capital to the Corporation and on the Corporation's share capital if the revised
financing plan as proposed by management is implemented.

<TABLE>
<CAPTION>
CLASS OF SECURITIES                                              COMMON SHARES  POSSIBLE NEW      TIMING
                                                                                  CAPITAL 
----------------------------------------------------------------------------------------------------------
<S>                                                               <C>           <C>            <C>
Current issued common shares                                      8,060,766            n/a            n/a
----------------------------------------------------------------------------------------------------------
Class A Warrants outstanding proposed @ $1.25 vs. $1.50(1)        1,815,802     $2,269,755      June 1998
----------------------------------------------------------------------------------------------------------
Class B Warrants outstanding proposed @ $1.25 vs. $2.00(1)        1,787,500     $2,234,375      June 1998
----------------------------------------------------------------------------------------------------------
Class AA Warrants outstanding proposed @ $1.25 vs. $2.50(1)       2,234,056     $2,792,570     Sept. 1998
----------------------------------------------------------------------------------------------------------
Class BB Warrants outstanding proposed @ $1.25 vs. $2.50(1)       2,475,000     $3,093,750     Sept. 1998
----------------------------------------------------------------------------------------------------------
$6.0 million Special Notes convertible into common shares 
until July 31, 2001 convertible @ $1.25 vs. $2.50(4)              4,800,000
----------------------------------------------------------------------------------------------------------
$4.1 million Bridge Loan convertible @ $1.25(4)                   3,280,000            n/a            n/a
----------------------------------------------------------------------------------------------------------
$5.0 million convertible first secured debentures 
convertible @ $0.85 into a unit consisting of a common 
share and a warrant(1)                                            5,882,353     $5,000,000      Jan. 1998
----------------------------------------------------------------------------------------------------------
2 year warrants underlying the units of the 1998 Debentures 
exercisable @ $0.90(1)                                            5,882,353     $5,294,117      Jan. 2002
----------------------------------------------------------------------------------------------------------
Pending $5.0 million Special Warrant private placement 
financing: 
a)   common shares(1)                                             5,000,000     $4,250,000      Jan. 1998
b)   share purchase warrants @ $0.90(1)(3)                        5,000,000     $4,500,000      Jan. 2000
----------------------------------------------------------------------------------------------------------
NUMBER OF COMMON SHARES, ASSUMING FULL DILUTION(2)               47,982,536
----------------------------------------------------------------------------------------------------------
CAPITAL AVAILABLE, ASSUMING FULL DILUTION                                     $ 30,978,686          
----------------------------------------------------------------------------------------------------------
</TABLE>

NOTES:
(1)  Subject to regulatory, and shareholder approval.
(2)  Excludes directors and officers incentive stock options.
(3)  Excludes any additional securities which may be issued as a penalty.  See
     "Private Placement - Special Warrants".
(4)  See "Amendment to Terms of 1996 Special Notes" and see "Conversion of Short
     Term Debt".


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

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 11

Management considers the foregoing revised corporate finance plan to be in the
best interests of the Corporation.  Regulatory body approval in respect of the
foregoing matters is subject to the Corporation receiving shareholder approval
with respect to each of the foregoing matters.  In this regard, notice has been
given that a special meeting of holders of common shares of the Company will be
held in the Jasper Room, The Westin Hotel at 320-4th Avenue S.W., Calgary,
Alberta, at 1:00 p.m. (Calgary time), on Friday, January 30, 1998 (the "January
1998 Special Shareholder Meeting").  Accordingly, management intends to place
before the meeting for approval and adoption, with or without modification,
various resolutions confirming, ratifying and approving the foregoing revised
corporate finance plan, as discussed hereinafter in further detail.  (See
"Liquidity and Capital Resources", below)

2.)  RESULTS OF OPERATIONS

Power Plus Corporation, through its wholly-owned subsidiaries Power Plus USA,
Inc., Power Plus Canada, Inc. and First Olympia Holdings Inc., currently
operates 14 locations in the US and 30 in Canada, totaling 44.  Up to the date
of this report, the Company closed 7 of its stores which were not operating to,
and were not expected to attain, Company standards.  The Company anticipates
closing as many as 6 additional similar circumstance stores before the end of
this year, making the revised total units expected remaining open at year-end in
the range of 38 stores.

The Company's stores, operating from leased premises ranging from 150 to 700
square feet in major enclosed shopping malls in the US and Canada, sell wireless
communication products and services (beepers, cellular phones, personal
communication systems and related service contracts), and portable electronics
(hand-held electronic communications, entertainment, business and lifestyle
products).  As a complement to its store operations, the Company is establishing
its wireless airtime and service reselling business, and building a substantial
and valued customer list comprised of the Company's airtime users.

The Consolidated Financial Statements included with these materials reflect that
during the first two quarters of Fiscal 1997, the Company operated only one
store in Canada and opened its first US store in July 1996.  During Quarters 3
and 4 of Fiscal 1997, Power Plus opened 36 new locations and acquired a chain of
13 retail locations in Florida, bringing the number of locations opened in total
to 51.  It is from these original 51 stores that the Company has closed and/or
expects to close the 13 stores referred to hereinbefore by the end of this
fiscal year. 

On 1 February 1996, the Company announced its Reorganization Plan subdivided
into two parts: PLAN 2000, the Company's 5-year business plan which prescribed
the manner in which the Company would re-launch and build its business to in
excess of 1000 stores by the end of the Year 2000; and, the Financing Plan
described hereinbefore which prescribed how the Company proposed to finance PLAN
2000's funding requirements. The Reorganization Plan, which incorporated a
related Plan of Arrangement, was approved by the Company's shareholders at
Fiscal 1996's Annual and Special Meeting of Common Shareholders held on 24 July
1996. The regulatory and court approval of the Plan of Arrangement was obtained
immediately thereafter. Arising out of adverse market conditions during this
fiscal year (the second year of PLAN 2000), resulting in the Company's inability
in the circumstances to complete fundings in accordance with the Financing Plan,
the expansion plan has been put on hold, delaying the implementation of PLAN
2000 on the time-lines originally forecast.  The Company cannot project when it
will 

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 12

be in a position to proceed with Plan and its modified approach to expansion
until its financial situation improves, and no assurances can be given as to
when this might be.  Until then, the Company remains dependent upon and at risk
for the raising of external capital. 

The Company's shareholders also approved as part of the Reorganization Plan the
Company's proposal to: change its name; reduce its stated capital by all or
virtually all of the accumulated deficit; reorganize and consolidate its
capitalization on the basis of 20 pre-consolidation shares for 1
post-consolidation share plus 1 exchange right -- that is to 2,238,281
post-consolidation shares from then record date number of 44,765,613
pre-consolidation shares; and, refinance in accordance with the Financing Plan.

Comparison of this year's results to last year would have little relevance,
principally for two reasons: (1) the Company, until it reaches break-even, is
still effectively operating in the startup mode and below critical mass; and,
(2) the comparative Consolidated Statements of Operations reflect that during
the first two quarters of Fiscal 1997 the Company acquired assets, operated only
one store in Canada for most of the first six-month period, opened its first US
store in late July 1996, and added most of its other stores during Quarter 4 of
Fiscal 1997.

Cost of sales as a percentage of total sales for Quarter 2 of Fiscal 1998 was
75% and 60% year to date. The increasing cost of sales is temporary and reflects
the management's restraint toward purchasing merchandise at this time and
remains sensitive to the availability and timing of funds, the receipt of which
cannot be assured.  In the longer term, the Company's management anticipates
obtaining a 53% cost of sales.

Operating and administration expenses incurred this year are not comparable to
Fiscal 1997, principally because, pursuant to the bankruptcies of the
Subsidiaries, the Company was initially focused on reorganizing, restructuring
and planning for the future. In the long-term, the Company's administration will
be structured so that a number of new stores can be added without a significant
increase in administrative overhead, thus trading on the overhead leverage. This
means profits from new locations can largely flow to the bottom-line. 

The amount of amortization for the period increased, in comparison to the
corresponding periods ending in Fiscal 1997, because the Company is amortizing
capital assets being employed in the business that were acquired during Fiscal
1997, and certain intangible assets (deferred costs of issuing Special Notes and
deferred issuing costs of Special Warrants). In addition, the Company is
amortizing the discount on the Special Notes at the rate of $70,000 per quarter.

3.)  LIQUIDITY AND CAPITAL RESOURCES

See Note 4 of the NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
included with there materials.

The Company's proposed revised corporate finance plan described hereinbefore has
been conceived to potentially raise up to $31 million in the aggregate over the
next two years.  While no assurances can be given as to its completion, the
overview table appearing hereinbefore under the heading entitled "Corporate
Overview", represents the potential impact on the availability of capital to the
Company and on the Company's share capital should the revised financing plan as
proposed by management be approved and implemented in its entirety.  The revised
financing plan, subject to shareholder and regulatory approval, incorporates the
following elements.

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 13

a).  PRIVATE PLACEMENT - SPECIAL WARRANTS

     Management intends to place before the January 1998 Special Shareholders
     Meeting, for approval, confirmation and adoption, with or without
     modification, an ordinary resolution ratifying the offer and sale of up to
     5,000,000 special warrants (the "Special Warrants") of the Corporation at a
     purchase price of $0.85 per Special Warrant for aggregate gross proceeds of
     up to $4,250,000, including reasonable fees, commissions and expenses. 
     Subject to shareholder approval, each Special Warrant shall entitle the
     holder to acquire one (1) common share and one (1) common share purchase
     warrant (the "regular warrant") at no additional cost during the period
     commencing  on the date of issuance and ending on the earlier of six (6)
     business days after the date upon which a receipt for a final prospectus
     relating to the common shares and regular warrants issuable upon exercise
     of the Special Warrants (collectively, the "Underlying Securities") or an
     appropriate exemption order is granted that permits the common shares and
     regular warrants to be freely tradeable, or the date that is one (1) year
     following the date of issuance of the Special Warrants.  Any Special
     Warrant that is not exercised prior to the aforesaid exercise date shall be
     deemed to be exercised without any further action on the part of the holder
     on such date.  Each regular warrant will entitle the holder thereof to
     purchase one (1) common share of the Corporation at a purchase price of
     $0.90 on or before two (2) years after the date of issuance of the Special
     Warrants.
                         
     The holders of Special Warrants shall be entitled to receive 1.1 common
     shares and 1.1 regular warrants without payment of further consideration if
     the Corporation at any time is unable to file and qualify a final
     prospectus in regard to the Underlying Securities on or before the date
     that is 180 days after the date of closing of the proposed private
     placement of Special Warrants.  Accordingly, it is possible that an
     additional 1,000,000 common shares may be issued pursuant to this
     provision.  
     
     Under the terms of the proposed financing, the Special Warrants are not
     convertible into the Underlying Securities until such financing has
     received shareholder approval.  In addition, the Corporation has obtained
     regulatory approval to complete this private placement, subject to, INTER
     ALIA, receipt of shareholder approval.

b).  PRIVATE PLACEMENT - FIRST SECURED DEBENTURES 

     Management of the Corporation has made application to The Alberta Stock
     Exchange for approval to complete a private placement of a series of first
     secured fixed and floating charge 10% convertible debentures ("1998
     Debentures") in the maximum principal amount of up to $5,000,000.  The 1998
     Debentures will mature on January 31, 2000, shall bear interest at a rate
     of 10% per annum, payable semi-annually in common shares having deemed
     price of $0.85 each, and are secured by way of a first fixed and floating
     charge against all of the assets of the Corporation.  The 1998 Debentures
     shall be convertible, in whole or in part, at the option of the holder,
     into units of the Corporation at a conversion price of $0.85 per unit (a
     "Unit") for a total of 5,882,353 Units.  Each Unit will consist of one
     common share and one share purchase warrant.  Each share purchase warrant
     shall be convertible into one common share of the Corporation at an
     exercise price of $0.90 per common share, expiring two years after the date
     of conversion.  The 

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 14

     total number of common shares of the Corporation reserved for issuance upon
     conversion of the 1998 Debentures and share purchase warrants shall be
     11,764,706 common shares.  Subject to the conditional approval of The
     Alberta Stock Exchange and shareholder approval, it is the intention of the
     Corporation to complete this private placement as soon as possible. [In
     view of the fact that the possible aggregate issuance of common shares
     issuable upon conversion of such debentures represents over twenty-five
     (25%) percent of the corporation currently issued and outstanding share
     total, shareholder approval is required by The Alberta Stock Exchange. 
     Funds raised from this private placement will be used for general corporate
     purposes.  This private placement will not affect a change of control of
     the Corporation.
     
     At any time after January 31, 1998 and before January 31, 2000, the
     maturity date, the Corporation may, by written notice, require holders of
     1998 Debentures to convert all or any part of the principal amount of their
     1998 Debentures into Units of the Corporation at a conversion price of
     $0.85, provided that any common shares issued upon such conversion will
     first have been qualified under a prospectus as free-trading shares and
     provided further that the weighted average trading price of the common
     shares over the ten (10) trading days prior to the date on which the
     Corporation gave notice (the "Conversion Notice") to the holders of 1998
     Debentures of its intention to require such holders to convert their 1998
     Debentures, is at least $1.70 per common share on any stock exchange in
     Canada on which the common shares are listed for trading.  If a holder of
     1998 Debentures has not converted their 1998 Debentures within 20 days of
     receipt of the Conversion Notice, the Corporation may, at any time
     thereafter, pre-pay all or part of the 1998 Debentures to which the
     Conversion Notice applies, together with interest thereon, and cancel any
     such 1998 Debentures so paid on a pro-rata basis.
     
     Management intends to place before the January 1998 Special Shareholders
     Meeting, for approval, confirmation and adoption, with or without
     modification, an ordinary resolution ratifying the offer and sale of the
     1998 Debentures.
     
c).  AMENDMENT TO TERMS OF 1996 SPECIAL NOTES 

     Pursuant to the 1996 Special Note Trust Indenture the Corporation created,
     allotted and issued a series of $6,000,000 10% convertible fixed and
     floating charge secured special promissory notes (herein referred to as the
     "1996 Special Notes").  Upon exercise, each $1,000 of principal amount of
     1996 Special Notes entitles the holder to acquire for no further
     consideration, $1,000 in principal amount of 10% convertible fixed and
     floating charge secured debentures (herein referred to as the "1996
     Debentures").  The holders of the 1996 Debentures have the right at any
     time, and from time to time, during the term of the 1996 Debentures to
     convert all or part of the principal amount of the 1996 Debentures into
     common shares in the capital of the Corporation at a conversion price of
     $2.50 per common share and upon the terms and conditions set forth in the
     1996 Debentures.  The 1996 Debentures are secured against the assets of the
     Corporation and rank pari passu with one another.

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 15

     Management intends to place before the January 1998 Special Shareholders
     Meeting for approval, confirmation and adoption, with or without
     modification, a resolution to amend the 1996 Special Note Trust Indenture
     and the debenture trust indenture, dated as of August 8, 1996 and effective
     as of July 31, 1996 ("1996 Debenture Trust Indenture") by way of
     supplemental indentures so that the conversion price of the 1996 Debentures
     will be reduced from $2.50 per common share to $1.25 per common share.   As
     a result, the total number of common shares reserved for conversion of the
     1996 Special Notes and the underlying 1996 Debentures would be increased
     from 2,400,000 to 4,800,000 common shares.  Due to the proposed creation of
     the 1998 Debentures which will have a first charge on the assets of the
     Corporation, management proposes that the 1996 Special Notes and 1996
     Debentures be subordinated to the 1998 Debentures.  By an extraordinary
     resolution dated effective November 24, 1997, the holders of the 1996
     Special Notes resolved that the payment of any and all debts and sums of
     money now or hereafter due and owing by the Corporation under the 1996
     Special Note Trust Indenture, the 1996 Special Notes and the 1996
     Debentures, shall be subordinated in all respects to the payment by the
     Corporation of its obligations to the holders of 1998 Debentures and that
     any security securing the 1996 Special Note Indenture, the 1996 Special
     Notes and the 1996 Debentures shall rank after the rights and security of
     the holders of 1998 Debentures.  It was also resolved by the holders of
     1996 Special Notes that the conversion price of the 1996 Debentures be
     reduced to $1.25 per common share.  In all other respects the 1998
     Debentures and the 1996 Debentures will be confirmed and ratified in all
     respects.
     
d).  AMENDMENTS TO CLASS A WARRANTS, CLASS AA WARRANTS, CLASS B WARRANTS AND
     CLASS BB WARRANTS

     Pursuant to a Plan of Arrangement which was approved by the shareholders of
     the Corporation at an annual and special meeting held on July 24,  1996,
     the Corporation reorganized and consolidated its share capital on the basis
     of twenty (20) previously issued common shares being reorganized and
     consolidated into one (1) consolidated common share and one (1) exchange
     right ("Exchange Right").   Each Exchange Right entitled the holder thereof
     to purchase one exchange unit ("Exchange Unit") of the Corporation at a
     purchase price of $2.00 per unit (equivalent of $0.10 per unit on a
     pre-consolidation basis), exercisable by the holders thereof until 90 days
     following their date of issue.
     
     Each Exchange Unit consisted of one (1) post-consolidation common share of
     the Corporation and one (1) share purchase warrant ("Class A Warrant"). 
     Each Class A Warrant entitles the holder thereof to purchase one
     post-consolidation common share of the Corporation at an exercise price of
     $2.00 per common share and one (1) common share purchase warrant for no
     consideration ("Class AA Warrant"), on or before November 15, 1997 (the
     "Class A Warrant Exercise Date").  The Class A Warrant Exercise Date was
     originally March 1, 1997 and was extended to November 15, 1997 by
     resolution of the board of directors.  Each Class AA Warrant entitles the
     holder thereof to purchase one (1) post-consolidation common share of the
     Corporation, at a purchase price of $2.50 per common share on or before
     March 1, 1998 (the "Class AA Warrant Exercise Date").
     
<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 16

     On March 1, 1996, the Corporation completed a private placement of
     49,500,000 special warrants (pre-consolidation) each of which was
     exercisable into one (1) common share of the Corporation and one (1)
     regular warrant ("Class B Warrant")  Each Class B Warrant entitles the
     holder thereof to acquire, on or before  November 15, 1997 (the Class B
     Warrant Exercise Date"),  one (1) common share of the Corporation for a
     price of $2.00 and one (1) share purchase warrant ("Class BB Warrant") at
     no additional cost.  Each Class BB Warrant entitles the holder thereof to
     acquire, on or before March 1, 1998 ( the Class BB Warrant Exercise Date"),
     one (1) common share of the Corporation at a price of $2.50.
     
     Management has determined that it is appropriate, subject to regulatory 
     and shareholder approval, to:

     (i)     extend the Class A Warrant Exercise Date and Class B Warrant
             Exercise Date until Tuesday, June 30, 1998;

     (ii)    reduce the exercise price of the Class A Warrants and the Class 
             B Warrants from $2.00 per common share to $1.25 per common 
             share;

     (iii)   extend the Class AA Warrant Exercise Date and the Class BB 
             Warrant Exercise Date to September 30, 1998; and

     (iv)    reduce the exercise price of the Class AA Warrants and the Class
             BB Warrants from $2.00 per common share to $1.25 per common 
             share.

     At the January 1998 Special Shareholders Meeting, management of the
     Corporation will seek approval of the shareholders to amend the Class A
     Warrants, the Class B Warrants, the Class AA Warrants and the Class BB
     Warrants by extending their respective expiry dates and reducing their
     respective exercise prices as set out below.

<TABLE>
<CAPTION>
     WARRANT     WARRANTS        PROPOSED        PROPOSED
     CLASS      OUTSTANDING    EXPIRY DATE       EXERCISE   AVAILABLE CAPITAL   
                                                  PRICE    
     -------------------------------------------------------------------------------
     <S>        <C>           <C>                <C>        <C>
     Class A     1,815,802    June 30, 1998       $1.25     $ 2,269,752.50
     Class B     1,787,500    June 30, 1998       $1.25     $ 2,234,375.00
     Class AA    2,234,056    Sept. 30, 1998      $1.25     $ 2,792,570.00
     Class BB    2,475,000    Sept. 30, 1998      $1.25     $ 3,093,750.00
     -------------------------------------------------------------------------------
         TOTAL   8,312,379                                  $10,390,447.50
</TABLE>

     As of the date of this report, the following numbers and classes of
     Warrants, as defined below, have been exercised at the following 
     exercise prices.

<TABLE>
<CAPTION>
       A                          B                 C                   D
       WARRANT CLASS,ORIGINAL      TOTAL PROCEEDS   TOTAL PROCEEDS IF    DIFFERENCE
        EXERCISE PRICE AND        FROM EXERCISE AT  EXERCISED AT NEW   BETWEEN B AND C
           NUMBER(1)               ORIGINAL PRICE     PRICE ($1.25)
       -------------------------------------------------------------------------------
       <S>                        <C>               <C>                <C>
       78,046 Class A at $2.50       $195,115.00      $97,557.50         $97,557.50
       344,433 Class at $2.00        $688,886.00     $430,541.25        $258,334.75
</TABLE>

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 17

<TABLE>
      <S>                            <C>            <C>                 <C>

       4,225 Class AA at $3.00          $12,675.00      $5,281.25         $7,393.75
      687,500 Class B at $2.00       $1,375,000.00    $859,375.00       $515,625.00
                          TOTAL      $2,271,676.00  $1,392,755.00       $878,921.00
</TABLE>

     NOTE 1:      No Class BB Warrants have been exercised to date.

     If the resolution reducing the exercise prices of the Class A Warrants,
     Class B Warrants, Class AA Warrants and Class BB Warrants as described
     herein is approved, and the board of directors elects to implement such
     amendments, the Corporation will be required to reimburse to those 
     holders of Class A Warrants, Class B Warrants, Class AA Warrants and 
     Class BB Warrants (herein collectively referred to as the "Warrants") 
     who have previously exercised all or part of their Warrants in the 
     aggregate amounts set forth above under column D, being the difference 
     between the price paid by each such warrantholder upon the exercise of 
     the applicable Warrant and the price that such warrantholder would have 
     paid based on the reduced exercise price of $1.25 per common share.
       
     Notwithstanding the approval of the shareholders of the Corporation, the
     board of directors of the Corporation may in their sole discretion 
     revoke the resolution relating to amendment of the exercise price of 
     the Warrants and/or the extension of the exercise date of the Warrants 
     before it is acted upon without further approval of the shareholders of 
     the Corporation. The extent to which the board of directors shall 
     implement the following resolution will be dependent on, inter alia, 
     the ability of the Corporation, in the sole opinion of the board of 
     directors, to reimburse the amounts as set forth above to previous 
     holders of Warrants who have already exercised all or part of their 
     Warrants.  If it is determined by the board of directors, in their sole 
     discretion, that the Corporation is unable or unwilling to reimburse 
     such amounts, it will not proceed with the following resolution, in 
     which event the terms and the conditions of the Warrants shall remain 
     as is, without amendment, or the board of directors may extend the 
     expiry dates only.

e).  CONVERSION OF SHORT TERM DEBT 

     The Corporation executed and delivered certain promissory notes (the
     "Bridge Loan Notes") evidencing an aggregate principal amount of $4,081,500
     in unsecured loans advanced to the Corporation and bearing interest at an
     annual rate of 10% pending implementation of a bona fide reorganization of
     the financial affairs of the Corporation.  As a term of the Bridge Loan
     Notes, the Corporation obtained regulatory approval of The Alberta Stock
     Exchange to reserve 180,000 common shares for issuance to the Bridge Loan
     Note holders as bonus shares.  The Bridge Loan Note holders have agreed
     that the payment of any and all debts and sums of money due and owing by
     the Corporation to the Bridge Loan Note holders shall be paid in full and
     converted into common shares of the Corporation upon the basis of a
     conversion price of $1.25 per common share.  The conversion of the Bridge
     Loan Notes shall be subject to regulatory approval.

     Management intends to place before the January 1998 Special Shareholders
     Meeting for approval, confirmation and adoption, with or without
     modification, a 

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 18

     resolution to convert the Bridge Loan Notes to shares of the Company upon
     the basis of a conversion price of $1.25 per common share.

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 19

PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS.
          Plan of Arrangement. (See Part I, Item 2. -- MANAGEMENT'S   
          DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF       
          OPERATIONS, herein)

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.

          The annual and special meeting of the Company's shareholders was
          held 12 September 1997.  In total, 1,356,539 common shares were
          represented either in person or by proxy, representing over 25% of
          the total number of 7,620,730 common shares eligible to vote.

          i.)  The shareholders of the Company elected to receive the
               annual report of the board of directors and the consolidated
               audited financial statements of the Company for the fiscal
               year ended 31 January 1997, voting as follows:

                         Number of      Number of           Number of
                       common shares   common shares      common shares
                         voted for     voted against      votes withheld
                         ---------     -------------      --------------
                         1,349,823          121                6,395

          ii.) The shareholders of the Company also elected to fix a board
               of seven directors, voting as follows:

                         Number of       Number of          Number of
                       common shares   common shares      common shares
                         voted for     voted against      votes withheld
                         ---------     -------------      --------------
                         1,347,059         6,775               2,505

          iii.) The election as directors for the nominees named in the
                management information circular accompanying this instrument
                of proxy for terms of office set out in accordance with the
                management information circular, voting as follows:

                         Number of       Number of          Number of
                       common shares   common shares      common shares
                         voted for     voted against      votes withheld
                         ---------     -------------      --------------
                         1,339,145         3,804              13,390

          iv.) The appointment of BDO Dunwoody, Chartered Accountants,
               Toronto, Ontario, as auditor of the Company for the ensuing
               year at a remuneration to be fixed by the directors, voting
               as follows:

                         Number of       Number of           Number of
                       common shares   common shares       common shares
                         voted for     voted against       votes withheld
                         ---------     -------------       --------------
                         1,348,150         8,164                  25

          v.)  The shareholders of the Company also approved and adopted,
               with or without modification, the ordinary resolution as
               more particularly set for in the management information
               circular accompanying this instrument of proxy relating to
               the granting of certain stock options, voting as follows:

                         Number of       Number of          Number of
                       common shares   common shares      common shares
                         voted for     voted against      votes withheld
                         ---------     -------------      --------------
                         1,002,941         14,571             338,581

<PAGE>

POWER PLUS CORPORATION                                                FORM 10-Q
                                                                 SECOND QUARTER
                                                           FISCAL YEAR END 1998
                                                                        PAGE 20

ITEM 5.       OTHER INFORMATION.
              Not applicable. 

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K.
              a.)   Exhibits
                    Exhibit 27  --  Financial data schedule

              b.)   Reports on Form 8-K
                    None


                                 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:   24 December 1997           /s/ R. Bruce Freeman
                                   ----------------------------------
                                   R. Bruce Freeman
                                   Vice Chairman and Chief Financial Officer 
                                   (Duly authorized officer of the Registrant 
                                        and its chief financial officer)