SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-KSB

Mark One:

         |X| Annual  Report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934. For the fiscal year ended March 31, 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 NO. 0-26535

                            VIAVID BROADCASTING, INC.
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                 (Name of Small Business Issuer in its Charter)

            NEVADA                                    98-0206168
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   (State or Other Jurisdiction of                  (IRS Employer
    Incorporation or Organization)                Identification No.)

         3955 GRAVELEY STREET, BURNABY, BRITISH COLUMBIA, CANADA V5C 3T4
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               (Address of Principal Executive Offices) (Zip Code)

                                  604-669-0047
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                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:

Title of Each Class                    Name of Each Exchange on Which Registered
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                                          None
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      Securities Registered Pursuant to Section 12(g) of the Exchange Act:
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                     Common Stock, par value $.001 per share


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                              (Title of Each Class)

         Check whether the Issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past twelve (12) months (or
for such shorter period that the Issuer was required to file such reports),  and
(2) has been subject to such filing  requirements  for the past 90 days. |X| Yes
|_| No

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of Regulation S-B in this form, and no disclosure will be contained, to
the best of Issuer's  knowledge,  in definitive proxy or information  statements
incorporated  by reference in Part III of this Form 10-KSB,  or any amendment to
this Form 10-KSB. |X|

         State Issuer's revenues for its most recent fiscal year:  $50,148.

         The aggregate  market value of the voting stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and  asked  prices  of such  stock,  as of June 14,  2000,  was  $3,840,400.
(Non-affiliates  have been  determined on the basis of holdings set forth in the
information  incorporated  by reference  under Item 11 of this Annual  Report on
Form 10-KSB.)

         The number of shares  outstanding  of each of the  Issuer's  classes of
common equity, as of June 14, 2000, was 6,832,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None


<PAGE>


                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS:

         We are in the business of providing  digital  streaming  technology  to
create, develop and offer live event coverage,  participant interviews, news and
information   and  video  and  audio  feeds  through  our  website   located  at
www.viavid.com  and other  syndicated  distribution  sites.  We deliver live and
archived available on-demand video content across a variety of digital platforms
from narrow band Internet to broadband Internet.  We offer a technology platform
to capture an Internet  audience when traditional  media broadcast  coverage may
not be available.

         We have  only  recently  commenced  business  and we have  earned  only
minimal revenues to date. There can be no assurance that our business plans will
be  successful.  Our  business  is still in the  development  stage.  We started
development  of our  business in January,  1999.  We  established  the  Business
Channel, VBC News 1 Channel in January, 1999 and commenced commercial operations
in March,  1999.  Over the past year, we have been producing and  broadcasting a
variety of new programs and special events over the Internet.

         Our  business  objective is to develop an Internet  video  broadcasting
company that offers a wide variety of video services  utilizing  streaming video
technology.  We have established Channels to provide viewers with access to news
and information relating to such topics as business,  entertainment,  health and
lifestyles and sports.  There can be no assurance that we will be able to attain
our business objective.

OUR CHANNELS

Business Channel

         We  believe  that  small-cap  public  companies  have not been  able to
achieve coverage on traditional media based Internet  broadcast services such as
Bloomberg and CNBC. We believe that there is market demand from small-cap public
companies that want to broadcast  corporate news and information on the Internet
and our  objective  is to meet this demand by  providing  Internet  broadcasting
services  to these  companies.  We  expect  that the  majority  of our  Internet
broadcasts  will be produced solely for broadcast via the Internet as opposed to
being  Internet  broadcasts  of television  coverage.  We will target public and
financial  services  companies  as  customers  in order to  educate  them on the
availability of our service and technology.

         We offer the following services to our customers:

     o   Video  production  of news  releases,  corporate  events and  corporate
         announcements;

                                      -2-

<PAGE>

     o   Broadcast and dissemination of video productions from our Web site over
         the Internet;

     o   Assistance in making video  productions  available  from our customers'
         Web sites.

     o   Advertising and hosting.

         Our Business  Channel  provides  viewers with  interviews  from company
officials  and analysts at locations  throughout  the United  States and Canada.
Broadcasts  are  produced  live and to tape and are archived on our Web site for
instant  on-demand  video.  Interviews  can also be linked  to other  companies'
sites,  allowing us to gain  additional  viewers from other sites.  We have also
developed  "skins" which are video boxes that display our video content that are
incorporated  into and  appear on  certain  websites  of other  companies,  thus
allowing a greater coverage of our video  productions.  We have provided "skins"
for Stockhouse.com and Radio Wallstreet.com for select VBC News 1 shows.

         Our Business Channel currently includes the following productions:

     o   VBC  News  1  -  An  interactive  financial  news  show  that  features
         interviews with small cap companies and analysts.

     o   Chris Tidd's Canadian Mutual Fund Report - A financial news show geared
         towards Canadian Mutual Funds.

     o   The Investment  Scene - A TV based investment show which ViaVid encodes
         and streams for the ViaVid website.

     We also  produced  and  broadcast  the CEO Summit on December 6 -9, 1999 in
conjunction  with  vcall.com,  radiowallstreet.com  and The Financial  Relations
Board. We interviewed officials from 80 companies in a live four-day event.

Entertainment and Music Channels

         We developed these Channels for the Gen X population. The Who Else Show
and Groo-v TV  showcases a variety of musical  groups such as "I Mother  Earth",
"No  Means  No" and  "Wide  Mouth  Mason"  as well as up and  coming  bands  and
entertainment acts. Our Entertainment "skin" has been seen on Urbanwave.com.

         We also  developed  this  Channel  to take  advantage  of the  actively
developing  film industry in Vancouver.  In early February of 2000, we agreed to
film behind the scenes of a teen TV show.

                                      -3-

<PAGE>

Sports and Special Events Channels

         Forsythe  Racing.  In accordance with an agreement signed with Forsythe
Racing on February 14, 2000, we developed "Pit Pass". Pit Pass, hosted by ESPN's
Paul Page, is an inside look into the Forsythe  Racing Team. Our production crew
has been  traveling to the CART races to film and broadcast the Forsythe  Racing
Team over the past year.  Our sports  "skins" have been seen on  Rivals.com  and
Motorsports.com.

         The  Golf  Show.   On  March  1,  2000,   we  signed  a  Memorandum  of
Understanding  with Ewart Golf World Inc. to encode and stream 26 golf  segments
for the 2000 season.  CTV Sportsnet,  KVOS 12 and other channels  throughout the
world broadcast The Golf Show.

         We have also  filmed  the PGA Golf  Tournament  and the  Telus  Open on
location in Vancouver.

Lifestyles Channel

         We  currently  encode  and  stream  Health  Videos  from TVN,  a health
broadcasting company located in New York.

         We  moved to our new  studio  and  production  facilities  in  Burnaby,
British   Columbia  in  November  1999  and  are  now  producing  live  Internet
broadcasts.

FORMAT OF OUR WEB SITE

         VBC  News 1,  our  first  Channel  launched,  was  developed  with  the
objective of creating a financial  resources  site. We have now developed  other
Channels to bring a variety of viewers to our site.

         An Internet user  accessing  our Web site is presented  with options on
which Channel to access. Upon selection, our Web site launches a streaming media
program  that  enables  the  video  production  to be  viewed  by the user  more
efficiently.  "Streaming"  is the term used for  computer  data media files that
begin  playing  at the  same  time  they are  being  transmitted  to the  user's
computer. As the name streaming suggests,  files flow like a stream. Rather than
attempting to send a whole  reservoir of data at one time,  streaming  sends the
first part of an audio or video clip through the Internet first, and then, while
that  clip is  playing,  the rest of the data is  sent,  arriving  in time to be
played.  To make sure playback is not  interrupted  if logjams slow the network,
the player collects a small backlog of data,  called a buffer,  before it starts
playing the first  clip.  If the data keeps  flowing  fast  enough,  playback is
continuous.  Thus,  users only have to wait the few seconds it takes to create a
buffer before viewing a file, regardless of whether the file lasts 30 seconds or
30 minutes.

                                      -4-

<PAGE>


         Our  Web  site  also  displays  our  logo  and  we  are  now  producing
advertisements for insertion into the various programs.

REVENUE SOURCES

     We intend to generate revenue from the following sources:

o    The  video broadcast and production of special events and of public company
     officials on the VBC News 1 Show.

o    Advertising and sponsorship.

o    Encoding and  streaming  video  productions  from other sources for use  on
     our site or any other website.

o    Hosting and server storage of video footage and web content.

The Broadcast and Production of Special Events and Corporate Information

         We currently produce and broadcast  corporate  interviews and corporate
events  for  publicly   traded   companies,   as  well  as  various  sports  and
entertainment events.

         We intend to  broadcast  news and special  event  coverage for both our
customers  who are  paying a fee for the  broadcast  of such  coverage,  and for
public  companies and special  events that are not  customers  where we deem the
news coverage to be of interest to our audience.  Our objective in  broadcasting
news and event  coverage for  non-paying  customers is to enhance the content of
our  broadcasts.  Our  objective  is to build and  maintain an audience  for our
customers  who are  paying  for the  broadcast  of news and event  coverage.  We
consider that building and  maintaining an audience that views our broadcasts as
essential to the marketing and sales of our broadcast  services.  Our charges to
customers are intended to range from $2,000 to $20,000 depending on the services
the customer requests, such as additional interviews or advertising packages

         We  perceive  that  there is  demand  by public  companies  with  small
capitalization who want to broadcast corporate news via the Internet. We compete
against  other  larger  companies  who  also  broadcast  financial  video on the
Internet,  including  Bloomberg and CNBC. We believe that our Internet broadcast
services  can be  distinguished  from the  services  offered  by large  Internet
broadcast companies such as Bloomberg and CNBC as these large firms do not offer
news coverage for small-cap public companies. In addition, these broadcasters do
not offer the  opportunity  for small-cap  public  companies to pay for Internet
news broadcast at affordable rates.

                                      -5-

<PAGE>

Advertising and Sponsorship

         We anticipate that  advertising  and  sponsorship  revenues will be the
principal  source of our future revenue.  Advertisements  are run throughout our
Business  Channel  broadcasts  and  we  expect  that   advertisements  will  run
throughout  programs  on our other  Channels as well.  We will seek  sponsorship
revenues for special events, such as golf tournaments and musical events.

Hosting and Storage of Video Footage and Web Content

         We intend to maintain archived video footage on our servers so that the
footage can be re-broadcast on demand from our Website or any other Website that
has a link to our website.  We propose to charge our customers a monthly fee for
the maintenance and storage of this footage. We propose to evaluate increases in
the fee charged if demand for our Internet broadcast services increases.

         We are also  intending to offer the service of hosting and updating our
customers' Web sites for a monthly fee.

OPERATIONS

         We use independent  Internet service providers to provide  connectivity
to the Internet.  We believe that these  telecommunication  and Internet service
facilities  are essential to our operation.  In November,  1999, we upgraded our
internet feed to facilitate our live footage.

         We produce  and  broadcast  our  productions  at our studio in Burnaby,
British  Columbia.  We also offer  on-location  services in  Vancouver,  British
Columbia.  . All footage shown  outside of our Website is clearly  identified as
our footage with ties back to our  Website.  We expect that each  customer  that
broadcasts  will bring its own  audience to our Website  that we will attempt to
retain through our daily programming.

         We focused our  operations  initially  on public  companies  located in
Vancouver, British Columbia. Our VBC News 1 clients now telephone in to the show
from any location in the world.  Our on-location  services have been constrained
by financial and personnel limitations.  At present, we have produced only a few
events outside the Vancouver  area. Our objective is to expand our production of
news and  information  throughout  the  United  States  and  Canada,  as well as
elsewhere. This sort of expansion,  however, is subject to available funding and
our ability to market our services in diverse  areas.  There can be no assurance
that we will be  successful in developing  our business  plan  throughout  these
areas.

                                      -6-

<PAGE>

TECHNOLOGY

         We license commercially  available technology whenever possible instead
of purchasing  custom-made  software or developing our own software.  We believe
that this strategy  lowers  operating  costs and allows us to  concentrate  more
fully on creating content.

         We  rely on a  variety  of  technologies  that we  license  from  third
parties, including our Internet server software, which is used in our ViaVid Web
site to perform key functions. We can provide no assurance,  however, that these
third-party  technology  licenses  will  continue  to  be  available  to  us  on
commercially  reasonable  terms.  Our loss or  inability  to  maintain or obtain
upgrades  to any of  these  technology  licenses,  could  result  in  delays  in
completing  enhancements  and have a material  adverse  effect on our  business,
results of operations and financial condition.

INTELLECTUAL PROPERTY

         Our  performance  and ability to compete are dependent to a significant
degree on our  proprietary  intellectual  property.  We rely on a combination of
trademark,  copyright and trade secret laws in order to protect our  proprietary
rights. We also rely on  confidentiality  agreements and non-compete  agreements
executed by employees and consultants.

         We have applied to the United States  Trademark office for registration
of "ViaVid" as a trademark  in the United  States.  We have also  applied to the
Canada Patent and Trademark  Office for  registration of "ViaVid" as a trademark
in Canada.  No trademark has been issued to us for "ViaVid" in either the United
States or Canada.  We are not aware of any other  companies  currently using the
name  "ViaVid".  We have conducted  searches of trademark  databases in both the
United  States  and  Canada  and have not  found  any  registration  of the name
"ViaVid" as a  trademark.  There is no  assurance  that we will be able obtain a
trademark  for the  "ViaVid"  name,  or that once  obtained  it will stand up to
objections by others who have made prior use of the name.  Also, there can be no
assurance  that we will obtain any  significant  commercial  advantage from this
trademark if granted or that we will have the financial resources to protect our
rights in the name through legal  proceedings or otherwise.  It is also possible
that our  competitors  or others will adopt  product or service names similar to
"ViaVid" or other similar  service  marks or  trademarks,  thereby  impeding our
ability to build brand identity and possibly leading to customer confusion.  Our
inability to protect the name "ViaVid"  adequately could have a material adverse
effect on our business, results of operations and financial condition.

                                      -7-

<PAGE>

COMPETITION

         In general,  business on the  Internet is rapidly  being  developed  by
companies  with  greater  technical  and  financial   resources  than  we  have.
Competitors may target our business  directly and may offer services  comparable
to our  services at prices below our cost.  There is no  assurance  that we will
have the  financial  or  technical  resources  to  compete  with such  action or
competitors.

         The Internet news  dissemination  market is new,  rapidly  evolving and
intensely  competitive.  We expect  competition  to intensify in the future.  We
currently  or  potentially  compete  with a variety  of other  companies.  These
competitors include:

(i)      Pseudo  Programs,  Inc., a private company  located in New York,  which
         provides services and content similar to ours,

(ii)     a number of indirect  competitors  that  specialize  in  Internet  news
         broadcasting, Bloomberg and CNBC;

(iii)    conventional news broadcasting and  dissemination  services,  including
         television, newspapers, and magazines;

(iv)     a  variety  of other  companies  that  offer  services  similar  to our
         services.

         We are aware of many  competitors  that provide both  conventional  and
Internet distribution of print-based news releases and corporate information for
small-cap public companies.  One example of a competitor in our principal market
of Vancouver,  British  Columbia is Canada  Stockwatch Inc., which provides news
dissemination  services for small-cap public  companies using both  conventional
print media and electronic  distribution.  Public companies such as Yahoo,  Inc.
and  Microsoft  Corporation  also provide  Internet  access to news releases and
corporate  information  released by  small-cap  companies.  We view our Internet
broadcast  services as being distinct from these print based  distribution media
sources.  Our  Internet  broadcast  service is  intended  to enable a  small-cap
company to deliver multi-media  presentations with audio and video streaming. We
believe  these  broadcasts  have the  potential to offer  greater  impact to the
public company's  target audience by enabling the viewer to see  representatives
of the small-cap company delivering corporate  information.  In addition,  these
presentations  are  done  live and  enable  the  audience  to  interact  and ask
questions in real time, as if they were actually  present.  Any presentation can
be coupled with video images of a customer's  business  operations and products.
The presentation can also be integrated with a customer's marketing  information
and corporate  information,  thereby reinforcing the customer's corporate image.
We are also able to  broadcast  events such as  shareholder  meetings  and press
interviews that are not typically published in a print-based format.

                                      -8-

<PAGE>

EMPLOYEES

         We have eleven (11) full-time  employees,  including Mr. Brian Kathler,
our President,  and Ms. Cheryl Watkins, our Secretary and Treasurer.  We have no
part-time  employees.  We conduct our business primarily through agreements with
our  consultants  and  arms-length  third  parties.   See  "Item  10.  Executive
Compensation."

RESEARCH AND DEVELOPMENT EXPENDITURES

         We have  spent  the  following  amounts  on  start-up  and  development
expenses since the commencement of our business in January, 1999:

         January 20,1999 to March 31, 1999                $75,104
         April 1, 1999 to March 31, 2000                  $1,055,294

Start-up and  development  expenses have consisted of expenses  associated  with
product  development,  including  development  of our Web site and the  Business
Channel,  business  development  and  market  development.  We have paid for all
start-up and development expenses that we have incurred.

GOVERNMENT REGULATION

         Our subsidiary,  ViaVid  Broadcasting  Corp., is presently qualified to
carry on business in the Province of British  Columbia,  Canada.  We may have to
qualify to do business in other  jurisdictions as our business  expands.  As our
broadcasts  will be available  over the Internet in multiple  states and foreign
countries,  additional  jurisdictions may claim we are required to qualify to do
business as a foreign company in each such state or foreign country.  Failure to
qualify as a foreign  company in a  jurisdiction  where  required to do so could
subject us to taxes and penalties.

         Our  ability to carry on  business  and expand may be  impacted  by new
government regulation. Due to the increasing popularity and use of the Internet,
new laws and regulations may be adopted with respect to the Internet  generally,
covering issues such as user privacy,  pricing,  and characteristics and quality
of products and services.  Similarly,  the growth and  development of the market
for Internet  commerce may prompt calls for more stringent  consumer  protection
laws that may impose additional burdens on those companies  conducting  business
over the  Internet.  The  adoption of any  additional  laws or  regulations  may
decrease  the growth of commerce  over the Internet and may increase our cost of
doing business or otherwise have a harmful effect on our business.

                                      -9-

<PAGE>

         We believe that  acceptance of our business format may increase as more
Internet  users  are  able to get  high  speed  access  to the  Internet  as the
functionality  of our Web site is enhanced using high speed Internet access over
conventional access.  Government regulation may impact on the timing and rate of
introduction of high speed Internet  access to consumers.  The delay of the wide
spread  introduction of high speed Internet access may  detrimentally  impact on
our business.

         There are no material environmental  protection laws that will apply to
or effect our business.

ITEM 2 - DESCRIPTION OF PROPERTY

         Our  primary  business  activities  are  carried on at leased  premises
located at 3955  Graveley  Street,  Burnaby,  British  Columbia  V5C 3T4.  These
premises are comprised of  approximately  3,000 square feet and are leased for a
term  expiring  on April 30,  2001 at a rental of $3,850 per month.  We have the
option to extend the term of the lease  through April 30, 2002. We believe these
facilities are adequate for our current operations.

ITEM 3 - LEGAL PROCEEDINGS:

         We are not currently a party to any material legal proceedings.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:

         No matter was  submitted  during the fourth  quarter of the fiscal year
ended March 31, 2000 to a vote of security holders.

                                      -10-

<PAGE>

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS:

         Our  Common  Stock has been  quoted  on the OTC  Bulletin  Board  since
December 23, 1999 under the symbol VVDB. The following table sets forth the high
and low bid  quotations  on the OTC Bulletin  Board for our Common Stock for the
period January 4, 2000 through June 14, 2000. Prior to January 4, 2000 there was
no active market for our Common Stock.

                                                          BID
                                          --------------------------------------
             CALENDAR QUARTER                  HIGH                   LOW
--------------------------------------------------------------------------------
            2000:  First Quarter              $5.63                  $1.50

            2000:  Second Quarter             $3.38                  $0.75
            (through June 14)

         The  foregoing  amounts,   represent  inter-dealer  quotations  without
adjustment for retail markups, markdowns or commissions and do not represent the
prices of actual  transactions.  On June 14,  2000,  the  closing  price for the
Common Stock, as reported on the OTC Bulletin Board was $2.03.

         As of June 14, 2000, we had approximately 35 shareholders of record.

DIVIDEND POLICY

         We do not  intend  to pay any  dividends  on our  Common  Stock for the
foreseeable  future.  Any  determination  as to the payment of  dividends on our
Common  Stock in the  future  will be made by our  Board of  Directors  and will
depend on a number of factors,  including future earnings, capital requirements,
financial  condition  and future  prospects as well as such other factors as our
Board of Directors may deem relevant.

                                      -11-

<PAGE>

RECENT ISSUANCES OF UNREGISTERED SECURITIES

During  the  past  three  years,  we  have  issued  the  following  unregistered
securities.

         On  January  27,  1999,  we issued  5,100,000  shares  of common  stock
pursuant to the Acquisition Agreement dated January 26, 1999 between our company
and Paul Watkins, Cheryl Watkins, Kathler Holdings, Inc. and 549419 B.C. Ltd. in
exchange for all of the outstanding  capital stock of ViaVid Broadcasting Corp.,
a British  Columbia  corporation.  These shares were issued  pursuant to Section
4(2) of the Securities Act of 1933, as amended (the "Act").

         On February 2, 1999, we completed the sale of 500,000  shares of common
stock to two (2) purchasers at a price of $0.01 per share.  The shares were sold
to O.  Ronald  Jones,  then the Vice  President-Finance  of our  company and Mr.
Jones' son. The shares were offered and sold  pursuant to Rule 504 of Regulation
D of the Act.

         On February 12, 1999, we completed the sale of 100,000 shares of common
stock to eight (8)  purchasers  at a price of $0.50 per share.  The shares  were
offered  and sold  pursuant  to Rule 504 of  Regulation  D of the Act to persons
known to our officers and directors None of the securities  were sold through an
underwriter  and,   accordingly,   there  were  no  underwriting   discounts  or
commissions involved.

         On April 5, 1999,  we  completed  the sale of 184,000  shares of common
stock to twelve (12)  purchasers at a price of $1.00 per share.  The shares were
offered  and sold  pursuant  to Rule 504 of  Regulation  D of the Act to persons
known to our officers and directors. None of the securities were sold through an
underwriter  and,   accordingly,   there  were  no  underwriting   discounts  or
commissions involved.

         During the period  from May 15, 1999 to October 7, 1999,  we  completed
the sale of  497,000  shares of common  stock to a total of nine (9)  purchasers
pursuant to Regulation S under the Act. Each  purchaser  represented  to us that
the purchaser was a "Non-U.S.  Person". Each purchaser represented his intention
to  acquire  the  securities  for  investment  only  and  not  with  a  view  to
distribution.  Legends  were  affixed  to the  stock  certificates.  None of the
securities  were sold through an  underwriter  and,  accordingly,  there were no
underwriting discounts or commissions involved.

         During December, 1999, we completed the sale of 40,000 shares of common
stock to a total of four (4) purchasers  pursuant to Rule 506 of Regulation D of
the Act. Each purchaser  represented to the Registrant that the purchaser was an
"accredited  investor,"  as defined in Rule 501 of Regulation D of the Act. Each
purchaser  represented  his intention to acquire the  securities  for investment
only and not with a view to their  distribution.  Legends  were  affixed  to the
stock certificates. None of the securities were sold through an underwriter and,
accordingly, there were no underwriting discounts or commissions involved.

                                      -12-

<PAGE>

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION:

GENERAL

         Our company  was  incorporated  in January,  1999 under the laws of the
state  of  Nevada.  Prior  to that  time,  we  conducted  operations  as  ViaVid
Broadcasting,  Corp.,  a British  Columbia  company  formed in July,  1994.  The
British  Columbia  company  was  inactive  and did  not  carry  on any  business
operations  prior to January,  1999. At that time, it began  development  of the
business  described in this Annual Report.  We continue to carry on our business
through the British Columbia  company as our wholly owned operating  subsidiary.
In November 1998,  the British  Columbia  company  changed its corporate name to
ViaVid Broadcasting Corp.

         We acquired all the outstanding shares of ViaVid  Broadcasting Corp. in
January,  1999 from Paul  Watkins,  Cheryl  Watkins,  549419 BC Ltd. and Kathler
Holdings Inc. in  consideration  for the issue of a total of 5,100,000 shares of
our common stock.

         Our principal  executive  offices are located at 3955 Graveley  Street,
Burnaby,  British  Columbia,  Canada  V5C 3T4.  Our  telephone  number  is (604)
669-0047.  Our  Web  site  is  located  at  http://www.viavid.com.   Information
contained on our Web site does not constitute part of this Annual Report.

PLAN OF OPERATION

         Our  business  objective is to become a leading  Internet  broadcasting
site.  We intend to  achieve  this  objective  by  pursuing  the  following  key
strategies:

News Broadcasting Services for Small-Cap Public Companies.

         We  believe  that  small-cap  public  companies  have not been  able to
achieve coverage on traditional media based Internet  broadcast services such as
Bloomberg and CNBC. We believe that there is market demand from small-cap public
companies that want to broadcast  corporate news and information on the Internet
and our  objective  is to meet this demand by  providing  Internet  broadcasting
services to these companies. Our Internet broadcasts will be produced solely for
broadcast via the Internet as opposed to being Internet broadcasts of television
coverage.  We will target public and financial  services companies as customers,
in order to educate them on the availability of our service and technology.


                                      -13-

<PAGE>

Production and Broadcasting of Special Events.

         Over the past  year,  we have  developed  additional  Channels  such as
Sports,  Entertainment and Health and Lifestyles to produce and broadcast unique
programs and special events.  By broadcasting  these programs,  we will target a
variety of audiences to bring additional viewership to our Web site.

Awareness of the Web site.

         We have undertaken  minimal  marketing  efforts to date, having focused
largely on the  development  of our Web site. We are currently  initiating  more
significant   marketing  efforts.  Our  video  "skins"  have  been  featured  on
Stockhouse.com,    Radiowallstreet.com,    Rivals.com,    Motorsports.com    and
Urbanwave.com.

         We operate in a market in which strong brand recognition is critical to
differentiating  ourselves and attracting a high-level of customer awareness and
user traffic.  Accordingly, our strategy is to increase our visibility and brand
recognition   through  a  variety  of  marketing  and  promotional   techniques.
Specifically,  we intend to  increase  points  of  access by  forming  strategic
relationships  with, and  advertising  on, leading Web sites. We also propose to
provide content for these other Web sites.  Prominent positioning on these sites
is  intended to give our Web site  credibility  with  potential  clients who are
unfamiliar with our Web site. We also propose to reinforce the ViaVid brand name
in users' minds by employing consistent branding from the design of our Web site
and logo.  There can be no assurance  that we will be able to  accomplish  these
objectives.

         We intend to pursue  co-marketing  arrangements by  cross-linking  with
other Web sites on the Internet.  We may post links to other Web sites in return
for that site posting our link.  We propose to pursue  cross-linking  only where
there is a mutually beneficial synergy with other Web sites.

Promoting Repeat Visits.

         We have designed our Web site with what we believe is an attractive and
engaging  format in order to enhance the  experience  of users and to  encourage
repeat  visits.  We believe that repeat visits can be further  encouraged by the
addition of new video content on a daily basis.

                                      -14-

<PAGE>

Expanding the Capabilities of our Web site.

         We  will  attempt  to  continually   enhance  the   functionality   and
attractiveness  of our Web site by  regularly  updating the  technology  used to
broadcast video information. We propose to expand the capability of our Web site
by adding additional programs for our Channels.

Monitoring Customers and Gathering Data.

         We believe that increased  information  regarding users of our Web site
will assist us in marketing our Web site and increasing revenues. At present, we
gather minimal demographic  information  regarding users of our Web site. We are
proposing  to  expand  the  capability  of our Web site to obtain  personal  and
business profile  information on users.  This information we believe will assist
us in  marketing  our  site  to  advertisers  who  are  prepared  to pay for the
placement of ads on our Web site. Information regarding the location,  nature of
business,  income  level and other  marketing  criteria of users of our Web site
will assist in developing user profiles. We believe user profiles will assist us
in marketing our video production and broadcast services.

Expanding the Revenue Generating Capacity of our Web site.

         We intend to pursue alternate revenue streams by streaming and encoding
other  productions  for our site or  another  web  site,  show  sponsorship  and
e-commerce  opportunities.  We also  propose to pursue  arrangements  with other
companies whereby we may earn a commission or fee based on customers referred to
web sites operated by other companies.

YEAR ENDED MARCH 31, 2000 COMPARED TO PERIOD ENDED MARCH 31, 1999

SALES.  Our revenues  were $50,148 for the year ended March 31, 2000 compared to
revenues  of $3,436  for the  period  from  January  20,  1999,  the date of our
incorporation,  to March 31, 1999.  Our revenues  were achieved  primarily  from
video production and Internet broadcast services provided to its customers.

REVENUE.  Our  revenues  are minimal in  comparison  to our  operating  expenses
because  we are  currently  in the  start-up  phase  of our  operations.  We are
attempting to increase our future revenues by completing our plan of operations,
as discussed in this Annual Report.  In addition,  we commenced  "live" Internet
broadcasts in December,  1999. Our objective is to attract corporate sponsorship
and advertising for these "live" Internet broadcasts.

OPERATING  EXPENSES.  Our operating  expenses were $1,055,294 for the year ended
March 31, 2000,  compared to  operating  expenses of $75,104 for the period from
January 20, 1999 to March 31, 1999.  The increase in operating  expenses was due
to the  move to the  new  production  facilities  and  the  additional  expenses
incurred to run a live feed from the  studio,  as well as

                                      -15-

<PAGE>

additional equipment purchased to produce these events. We will incur additional
operating  expenses  as we  continue  to  provide  live  broadcast  feeds of our
productions  on the  Internet.  We will continue to have  operating  expenses in
connection with the continued  up-grade of our Web site. We also anticipate that
operating  expenses  will increase as the number of video  productions  which we
produce and broadcast for our customers increases.

NET LOSS. Our net loss was $1,005,146,  or $(0.16) per share, for the year ended
March 31,  2000.  Fully  diluted  loss per share was  $(0.13).  Our net loss was
$71,668,  or $0.01 per share,  for the period from January 20, 1999 to March 31,
1999.  Our net loss  reflects  the  fact  that we have  not  earned  significant
revenues to date.

LIQUIDITY AND CAPITAL RESOURCES

         Our  operations  have been  financed  principally  through sales of our
equity securities.

         We had  cash of  134,540  as of  March  31,  2000  compared  to cash of
$163,406 as of March 31, 1999.

         We  realized  net  proceeds  of  $537,000  from the sales of our equity
securities  during the year ended March 31, 2000.  These  proceeds  were used to
finance our operating activities.

         We plan on meeting our operating  expenses during the year ending March
31,  2001  by  focusing  on  generating  revenues  through   advertisements  and
sponsorship on live broadcasts,  video  productions for broadcast on our website
and hosting of video productions as well as from additional  capital intended to
be provided by the proposed sale of equity securities.

         We are currently  seeking  additional equity financing in the amount of
up to  approximately  $2,000,000.  These funds, if obtained,  will be applied to
meet our Plan of Operations described below. There can be no assurance that this
additional capital can be raised or, if equity securities are sold, the terms of
any such transaction.  If we are successful in obtaining this financing, we will
allocate the funds substantially as stated below.

         Subject to the availability of sufficient funds, we currently intend to
pursue the following Plan of Operations during the twelve months ended March 31,
2001:

         o    Continue  to  develop  a  customer  base of public  and  financial
              companies to use our services for digital  video  productions  and
              Internet  broadcasting.  We anticipate we will spend approximately
              $100,000 on this marketing expense over the twelve-month period;

                                      -16-

<PAGE>

         o    Continue to develop the Business  Channel for  broadcast  from our
              Web site. We anticipate  we will spend  approximately  $200,000 on
              this development expense over the twelve-month period;

         o    Develop  additional  programming  for  Sports,  Entertainment  and
              Health  and  Lifestyles  Channel.  We  anticipate  we  will  spend
              approximately  $500,000 on various  programs for these  additional
              channels over the twelve-month period;

         o    Evaluate  whether  to set up an  additional  office or  offices in
              additional  cities  in  order  to  expand  our  business  and meet
              customer demand. If we proceed to establish additional offices, we
              anticipate  we will spend  approximately  $50,000 for this purpose
              over the twelve-month period;

         o    Expand our Web site to attempt  to extract  marketing  information
              and  data  from  users in order  to  obtain  a basis  for  earning
              advertising  revenue.  We anticipate  we will spend  approximately
              $50,000 on expansion of our Web site over the twelve-month period;

         o    Purchase   additional   equipment  to  expand  our  digital  video
              production studio and video production capabilities. We anticipate
              we will spend  approximately  $250,000  on  additional  production
              equipment over the twelve-month period.

         Accordingly,  subject to the  availability of funds, we anticipate that
we will spend approximately  $1,150,000 over the twelve-month period in pursuing
our Plan of Operations described above. A portion of these funds may be obtained
from additional equity financings to be completed in the future. In the event we
are unable to obtain these funds from these  sources,  our ability to pursue our
business plan will be adversely affected.

         Our actual  expenditures  and business plan may differ from this stated
Plan of Operations.  Although we have no present plans or proposals  pending,  a
strategic  alliance  relating to one aspect of streaming content or encoding may
cause our Board of Directors to modify our plans. In addition, we may modify our
Plan of Operations based on the available amounts of financing in the event that
we  cannot  obtain  the  required  equity  financings  to  pursue  our  Plan  of
Operations.  We do not have any  arrangement  in  place  for any debt or  equity
financing which would enable us to meet our Plan of Operations.

         In the  event  we are not  successful  in  raising  additional  capital
through  sales  of our  common  stock or  otherwise  raising  additional  equity
capital,  we anticipate  that we could sustain our business  operations  through
September 30, 2000, based on our current cash position and revenues.

                                      -17-

<PAGE>

         We are currently receiving revenues from video production , advertising
and hosting  services.  We  anticipate  an increase in revenue from  production,
advertising,  sponsorship  and hosting  video  footage and web content if we are
successful in increasing our customer base over the next twelve months.

         Notwithstanding  the above Plan of  Operations,  we  anticipate we will
experience  continuing  operating losses in the foreseeable future. We base this
expectation in part on the following:

         o    We will incur substantial  marketing expense in order to advertise
              and promote  our Web site,  to  establish  a customer  base and to
              increase the usage of our Web site.

         o    Increased  usage of our Web site will lead to increased  operating
              expenses  and  require  additional  capital  expenditures  on  new
              computer equipment, software and technology.

         o    Our operating  expenses will continue to increase as we expand the
              technical capabilities of our Web site.

         o    Our  operating  expenses  will  increase  as we solicit  potential
              customers  and  complete  video   productions  for  customers  for
              broadcast via our Web site.

         o    Our  operating  expenses  will  increase  as we solicit  potential
              advertisers  and sponsors and attempt to enter into agreements for
              advertising and sponsorship on our Web site.

         o    Our operating  expenses will increase as we undertake to implement
              programs  to monitor  usage of our Web site and  develop  customer
              profiles of our users.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1996

         With the exception of historical matters, the matters discussed in this
Annual Report are  "forward-looking  statements" as defined under the Securities
Act of 1933, as amended,  and the  Securities  Exchange Act of 1934, as amended,
that involve risks and  uncertainties.  Forward-looking  statements  made herein
include,  but are not limited to, the statements in this Annual Report regarding
our plans and  objectives of  management  for our future  operations,  including
plans or  objectives  relating to our  intentions to provide  digital  streaming
technology  to  create,  develop  and offer  live  event  coverage,  participant
interviews,  news and  information,  and  other  content  through  our  Website,
Internet news broadcasting and other  dissemination  services and other products
or services,  our plans and objectives regarding revenues and expenses in future
periods,  our plans and objectives and needs to raise  additional  capital,  the
terms on which such  capital  can be raised,  the period  over which any capital
available currently to us or raised in the

                                      -18-

<PAGE>

future will be sufficient to meet our current level of operating  expenses,  and
our plans regarding the uses of that capital,  as well as any other  prospective
financial  information  concerning  us.  These  statements  appear,  among other
places, under the following captions:  "Item 1 - Description of Business," "Item
5 - Market for Common Equity and Related Security Holder Matters," and "Item 6 -
Management's  Discussion and Analysis or Plan of Operations." See the discussion
of Risk Factors  beginning on page 20.  Forward-looking  statements made in this
Annual Report include the assumptions made by management as to the future growth
and business direction of the Internet, e-commerce through the facilities of the
Internet and the role of video  production  and Internet news  broadcasting  and
dissemination services on the Internet.  They also include our beliefs as to the
importance  of  privacy to users,  their  willingness  to view our  broadcasting
services and programs,  as well as our plans to improve the  capabilities of our
servers and  facilities.  They also include our beliefs as to the willingness of
small-cap  public  companies to broadcast  corporate news and information on the
internet and for us to derive  revenues from providing  this service.  We cannot
assure you that our assumptions in this regard or our views as to the commercial
viability  of our  business  plans  discussed  herein will prove to be accurate.
Likewise,  we cannot  assure you that we will be  successful in growing our user
and customer  base as we plan,  attracting  companies to use our Internet  based
broadcast  services for the dissemination of their news  information,  realizing
material  amounts of  advertising  or other  revenues,  achieving any commercial
advantage relative to other Internet or other financial news dissemination media
companies or raising the additional  capital  required to support our operations
or the terms and conditions on which such capital can be raised.  Our ability to
realize revenues and raise additional  capital from the business plans discussed
herein cannot be assured.  If our  assumptions  are incorrect or our advertising
and other growth plans or plans to realize revenues or raise additional  capital
fail to  materialize,  we may be unsuccessful in developing as a viable business
enterprise.  Under such  circumstance your entire investment will be in jeopardy
and may be  lost.  Our  inability  to  meet  our  goals  and  objectives  or the
consequences  to us from  adverse  developments  in general  economic or capital
market  conditions  and our inability to raise  additional  capital could have a
material  adverse  effect  on us.  We  caution  you that  various  risk  factors
accompany  those  forward  looking  statements  and are  described,  among other
places, under the caption "Risk Factors" herein,  beginning on page 20. They are
also described in our Quarterly Reports on Form 10-QSB,  and our Current Reports
on Form 8-K.  These risk factors  could cause our operating  results,  financial
condition  and  ability to  fulfill  our plans to differ  materially  from those
expressed in any forward-looking statements made in this Annual Report and could
adversely affect our financial  condition and our ability to pursue our business
strategy and plans.

                                      -19-

<PAGE>

                                  RISK FACTORS

An investment in shares of our Common Stock  involves a high degree of risk. You
should  consider the  following  factors,  in addition to the other  information
contained  in this Annual  Report,  in  evaluating  our  business  and  proposed
activities  before you purchase any shares of our common stock.  You should also
see the "Cautionary  Statement for Purposes of the Safe Harbor Provisions of the
Private   Securities   Litigation  Reform  Act  of  1996"  regarding  risks  and
uncertainties  relating to us and to forward  looking  statements in this Annual
Report.

                        RISKS APPLICABLE TO OUR BUSINESS

EXTREMELY LIMITED OPERATING HISTORY; HISTORY OF NET LOSSES

         We have had an extremely  limited operating  history.  Our business was
established in January 1999 and our Web site began operations on the Internet in
February 1999. Our total  revenues since  inception  through March 31, 2000 were
$53,584.  An  investor  must  consider  the  risks,  expenses  and  difficulties
frequently  encountered  by companies such as ours, in the early stages of their
development  particularly  in the new and rapidly  evolving  market for Internet
products,  content and services. We cannot assure you that we will be successful
in  addressing  such  risks.  We cannot  assure you that our  revenue  will grow
sufficiently  to  assure  our  future  success.  New  companies,  such as  ours,
experience  expenses,  difficulties and unforeseen problems that create a higher
risk of business failure.  If we are not successful in overcoming these expenses
and difficulties, our business may fail.

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING

         The report of our independent  auditors on their audit of our financial
statements as of March 31, 2000 contains an explanatory paragraph that describes
an  uncertainty  as to our  ability to  continue  as a going  concern due to our
recurring losses and the necessity to obtain additional financing.  At March 31,
2000,  we did  not  have  available  to us  the  funds  necessary  to  meet  our
anticipated  capital needs. At March 31, 2000 we had cash of $134,540.  In order
to meet our Plan of Operations, we will need to raise additional capital. We are
currently  seeking to raise this additional  capital.  There can be no assurance
that any additional  financing will be available to us on favorable terms, or at
all. If adequate  funds are not available or not available on acceptable  terms,
we may not be able to fund our  business  plans as we  desire,  or,  develop  or
enhance services or respond to competitive  pressures.  Any such inability could
have a  material  adverse  effect on our  business,  results of  operations  and
financial  condition.  Additional funds raised through the issuance of equity or
convertible debt securities, will result in reducing the percentage ownership of
our stockholders  and, our stockholders may experience  additional  dilution and
such  securities may have rights,  preferences or privileges  senior to those of
the rights of our Common Stock.

                                      -20-

<PAGE>

         As a result of our limited Internet operating history,  we have limited
meaningful  historical  financial data upon which our planned operating expenses
can be based.  Accordingly,  our  anticipated  expense  levels in the future are
based in part on our  expectations  as to future  revenue and will become,  to a
large extent, fixed. Revenues and operating results generally will depend on the
volume of, timing of and ability to complete  transactions,  which are difficult
to forecast.

         In  addition,  there  can be no  assurance  that  we  will  be  able to
accurately predict our revenue,  particularly in light of the unproven manner in
which we intend to derive our Internet revenue,  the intense competition for the
sale of products and  services on the Web,  revenue-sharing  opportunities,  our
limited  operating history and the uncertainty as to the broad acceptance of the
Web as a news broadcasting  medium. We may be unable to adjust our spending in a
timely manner to compensate for  disappointing  results of our marketing efforts
and efforts to develop Internet  revenue,  any unexpected  revenue  shortfall or
other unanticipated changes in the Internet industry.  Our failure to accurately
make such  predictions  or  adjustments  in our  spending  would have a material
adverse effect on our business, results of operations and financial condition.

POSSIBLE INABILITY TO IMPLEMENT OUR BUSINESS STRATEGY

Our business strategy includes completion of the following business objectives:

o     Attracting public companies and other financial industry customers who are
      prepared  to pay for  having us  prepare  digital  video  productions  and
      broadcast these video  productions on our Web site, as well as seeking out
      potential advertisers and sponsors who are willing to advertise or sponsor
      various  programs  on our Web site.  We have only  recently  begun to seek
      payment from customers for these services;

o     Continuing  to  expand  the  usage  of our  Web  site by  attracting  both
      financial  industry  customers  and a  variety  of  viewers  for our other
      programs;

o     Expanding the functionality and capability of our Web site;

o     Attracting  advertising  to our Web site and  establishing  other  revenue
      generating opportunities for our Web site;

o     Responding to competitive developments;

                                      -21-

<PAGE>

o     Implementing and executing our business strategy successfully; and

o     Continuing to develop and upgrade our technologies and our Web site.

         If we are not successful in implementing all components of our business
strategy  successfully,  our operating  results and  financial  condition may be
harmed and our business may fail.

POSSIBLE INABILITY TO GENERATE REVENUES AND PROFITABLE OPERATIONS

         We have  earned  minimal  revenues  to date  and we are  presently  not
profitable.  Our business and marketing strategy  contemplates that we will earn
revenues  from  public  customers  who pay for the  broadcast  of digital  video
productions on the Internet via our Web site and through  advertising  posted on
our Web site. If we are not able to generate  revenues from these  activities or
if the revenues  generated do not exceed the  operating  costs of our  business,
then our business will not be profitable and our business may fail.

ANTICIPATED LOSSES IN FUTURE PERIODS

         We incurred a loss of $1,005,146 during the fiscal year ended March 31,
2000 and of $71,668 for our first fiscal  period ended March 31, 1999. We expect
that our  operating  expenses  will  increase as we  implement  our business and
marketing strategy due to the following factors:

o     We will incur  substantial  marketing  expense in order to  advertise  and
      promote our Web site, to establish a customer  base and to increase  usage
      of our Web site.

o     We expect  that  increased  usage of our Web site  will lead to  increased
      operating  expenses and require  additional  capital  expenditures  on new
      computer equipment, software and technology.

o     We expect our  operating  expenses  will continue to increase as we expand
      the technical capabilities of our Web site.

o     We expect our operating  expenses  will  increase as we solicit  potential
      customers and complete video  productions  for customers for broadcast via
      our Web site.

o     We expect our operating  expenses  will  increase as we solicit  potential
      advertisers  and attempt to enter into  agreements for  advertising on our
      Web site.

o     We  expect  our  operating  expenses  will  increase  as we  undertake  to
      implement  programs to monitor usage of our Web site and develop  customer
      profiles of Web site users.

                                      -22-

<PAGE>


If our operating  expenses increase as anticipated,  we will realize  additional
losses for the foreseeable future.

LOCAL NATURE OF OUR PRESENT OPERATIONS

         We focused our  operations  initially  on public  companies  located in
Vancouver,  British  Columbia.  We are able to  provide  services  to  companies
located in other markets, but our ability to provide on-location productions has
been  constrained by financial and personnel  limitations.  At present,  we have
produced  only a few events  outside the  Vancouver  area.  Our  objective is to
expand  production  of news and  information  throughout  the United  States and
Canada,  as well as elsewhere.  This sort of expansion,  however,  is subject to
available funding and our ability to market our services in diverse areas. There
can be no assurance  that we will be successful in developing  our business plan
throughout these areas.

DEPENDENCE ON ADVERTISING REVENUE

         We intend to derive the principal  portion of our revenue from the sale
of  advertising  and  sponsorship  on our  Internet  site,  and we  intend  that
advertising and sponsorship  revenue will continue to be the principal source of
our revenue in the foreseeable future.

         Our ability to generate advertising and sponsorship revenue will depend
on several factors, including:

     o   the  continued  development  of  the  Internet  as an  advertising  and
         sponsorship medium,

     o   the pricing of advertising and sponsorship on other Internet sites,

     o   the amount of traffic on our site,

     o   pricing pressures, delays and new product launches,

     o   our ability to achieve,  demonstrate  and  maintain  user  demographics
         attractive to advertisers and sponsors, and

     o   our  ability  to develop  and retain a skilled  advertising/sponsorship
         sales force.

         Others engaged in seeking to attract users to their Internet sites have
significantly  greater assets and substantially  larger advertising budgets than
we  have.  These  limitations  on our  advertising  budget  can be  expected  to
adversely affect our ability to attract users to our site.

                                      -23-

<PAGE>

         We believe Internet advertising typically slows in the first quarter of
the year.  Seasonality  and  cyclicality  in the level of  Internet  advertising
expenditures  generally  could  become  more  pronounced  in the  future  as the
Internet becomes more accepted as an advertising vehicle.

MANAGEMENT OF GROWTH AND RELATIONSHIPS;  BRIEF TENURE OF MANAGEMENT;  DEPENDENCE
ON KEY PERSONNEL

         In developing  our business plan, we expect to be required to establish
and manage multiple  relationships with various strategic providers of services,
technology licensors, marketers and other third parties. To date, only a limited
number of such relationships have been established.  These requirements to enter
into these relationships will be exacerbated in the event of our material growth
or in the number of third  party  relationships,  and there can be no  assurance
that our  systems,  procedures  or  controls  will be  adequate  to enable us to
establish and enter into these relationships,  to support any substantial growth
in our operations or that our management will be able to implement or manage any
growth effectively.

         To effectively manage growth, we must establish,  implement and improve
operational,  financial and management information systems and expand, train and
manage  our  employee  base.  Our   development  is  and  will  continue  to  be
substantially  dependent  on the  abilities  and  performance  of our  executive
officers  and  other  key  employees.  The  loss of the  services  of any of our
executive  officers or other key employees could have a material  adverse effect
on our prospects,  business development, and results of operations and financial
condition.  Competition for senior  management,  experienced sales and marketing
personnel,  qualified Web  engineers  and other  employees is and is expected to
continue to be intense.  There can be no assurance that we will be successful in
attracting and retaining such  personnel.  There can be no assurance that we may
not  experience  difficulty  from  time to  time in  hiring  and  retaining  the
personnel  necessary  to support  the  growth of our  business.  Our  failure to
successfully  manage our personnel  requirements  would have a material  adverse
effect on our business, results of operations and financial condition.

         Our performance is  substantially  dependent on the continued  services
and  performance of our senior  management  and other key  personnel,  including
Brian Kathler, President and a Director, Paul Watkins, a Director, Robert Gamon,
a Director, James King, a Director, and Cheryl Watkins, Secretary and Treasurer.
Cheryl Watkins is the wife of Paul Watkins. We do not have long-term  employment
agreements  with any of our key  personnel  and  maintain no "key  person"  life
insurance policies.  Our future success also depends on our ability to identify,
attract,  retain and motivate  highly  skilled,  technical,  managerial,  sales,
marketing  and  customer  service  personnel.  Competition  for such  persons is
intense.  We cannot  assure you that we will be able to  attract or retain  such
personnel.  The  failure to do so could have a  material  adverse  effect on our
business, financial condition and results of operations.

                                      -24-

<PAGE>

DEPENDENCE ON THIRD PARTIES FOR INTERNET TRAFFIC

         We believe that traffic  originating from links on other Internet sites
(particularly  search engines,  directories and other navigational tools managed
by Internet  service  providers and Web browser  companies) will be an important
segment of the overall traffic on our Internet site. These linking  arrangements
are expected to be either  short-term  contracts and/or be able to be terminated
with  little  notice.  There is intense  competition  for these types of linking
arrangements.  We cannot assure you that these  arrangements  will be able to be
created or that advertising or links will be available on reasonable  commercial
terms or at all.  Likewise,  we cannot  assure you that any such  relationships,
once established, will be maintained and continued. Our failure to establish and
retain  these links can be expected to  adversely  affect our ability to attract
persons to our site.

DEPENDENCE ON LICENSED TECHNOLOGY

         We rely on certain  technology  licensed  from third parties for use in
operating and managing our Internet site and providing related services to users
and  advertisers.  We cannot  assure you that such  technology  licenses will be
available at all, that they will be available on reasonable  commercial terms or
that they will operate as intended.

                RISKS APPLICABLE TO INTERNET BUSINESS ACTIVITIES

UNPREDICTABILITY  OF  FUTURE  REVENUE;  POTENTIAL  FLUCTUATIONS   IN   QUARTERLY
OPERATING RESULTS

         As a result of the  evolving  nature of the  Internet  and our  limited
operating history, we cannot accurately forecast our revenue. Current and future
expense levels are based  principally on anticipated  future revenues and, as we
increase the scope of our activities,  these expenses,  to a large extent,  will
increase and become fixed.  Accordingly,  we may be unable to adjust spending to
compensate for shortfalls in our  anticipated  revenues.  If our revenues do not
materialize as anticipated, this could have an immediate material adverse effect
on our business,  financial condition and results of operations which could lead
to an investor's loss of his investment in our company.

         Our quarterly operating results may fluctuate  significantly because of
a variety of factors, many of which are outside our control, including:

o    overall usage levels of the Internet and of our sites in particular,

                                      -25-

<PAGE>

o    demand for Internet advertising and sponsorship and the loss of advertisers
     or sponsors,

o    seasonal trends in Internet use and advertising and sponsors,

o    the amount and timing of our capital expenditures,

o    costs relating to the expansion of our operations and the  introduction  of
     new sites and services and Channels,

o    price competition or pricing changes in Internet advertising, and

o    costs relating to technical difficulties or system downtime.

         Quarterly  comparisons of our results of operations are not expected to
be a reliable indication of our future performance.

DEPENDENCE  ON GROWTH IN  INTERNET  USE AND  ACCEPTANCE  AS AN  ADVERTISING  AND
COMMERCE MEDIUM

         Our future revenue will depend largely on the widespread acceptance and
use of the Internet as an information  source and as an advertising and commerce
vehicle. Rapid growth in Internet use is a recent trend and market acceptance of
the Internet as an advertising and commercial  medium is highly  uncertain.  The
Internet may not be accepted as a viable  advertising  and  commerce  medium for
distribution  of  information  and engaging in commerce for a number of reasons,
including:

     o   inadequate development of the network infrastructure,

     o   inadequate development of enabling technologies,

     o   insufficient commercial support for Internet advertising or sponsors,

     o   concerns about privacy and security among users, and

     o   lack of widely accepted  standards for measuring the  effectiveness  of
         advertising on the Internet.

                                      -26-

<PAGE>

RAPID TECHNOLOGICAL CHANGE

         The market for Internet products and services is characterized by rapid
technological  developments,  frequent  new product  introductions  and evolving
industry standards.  We will be required to continually improve the performance,
features and reliability of our infrastructure  and Internet site,  particularly
in response to competition and changing customer  demands.  We cannot assure you
that we will be successful in responding rapidly, cost-effectively or adequately
to such developments.

COMPETITION

         The business of broadcasting  news through the Internet is new, rapidly
evolving and extremely competitive. We compete with a variety of other companies
who  offer  competing  means  of  broadcasting   financial  news  and  corporate
information through the Internet,  substantially all of whom are larger and more
well  established  than we are.  We expect  new  competitors  to enter into this
market due to the  expansion of use of the  Internet  and changes in  technology
that will increase the ability of companies to use video streaming technology on
the Internet.  Substantially all of our current  competitors have  significantly
greater  financial,  technical,  marketing and other resources than we do. If we
experience increased  competition in the business of broadcasting news and video
productions  on the  Internet,  our  ability  to obtain  customers  and  achieve
revenues for our services will be limited. In addition, the potential rates that
we may be able to charge for  advertising  on our Web site may  decrease  if the
growth of the Internet and electronic commerce brings increased competition.

         Competition   among   Internet   content   providers,   including  news
broadcasters,  is intense  and is  expected  to  increase  significantly  in the
future.  The market for Internet  content sites is rapidly evolving and barriers
to entry are low, enabling  newcomers to launch  competitive sites at relatively
low cost.  We  believe we compete  most  directly  with  Pseudo  Programs,  Inc.
However, we also generally compete for users and advertisers with a large number
of Internet portals,  search sites and content  aggregators,  general news sites
(such as those  provided  by CNN and ABC) and  general  purpose  online  service
providers  (such as  America  Online and MSN).  In  addition,  we  compete  with
traditional media content  businesses such as newspapers,  magazines,  radio and
television.  In order to compete successfully and attract users, advertisers and
strategic partners,  we must provide high quality,  engaging content in a timely
and  cost-effective  manner. We cannot assure you that we will be able to do so.
Moreover,  increased  competition  could  result  in price  reductions,  reduced
margins or loss of market  share,  any of which  could  have a material  adverse
effect on our business, financial condition and results of operations.

NEW SERVICE RISKS

         Our  future  success  may  depend in part on our  ability to expand our
Internet  site to include new subject  matters and services  and other  Internet
sites.  Costs related to developing  new content areas and services are expensed
as they are  incurred  while  revenue  related  to these new  content

                                      -27-

<PAGE>

areas  and  services   typically   builds  over  time  and,   accordingly,   our
profitability  from year to year may be  adversely  affected  by the  number and
timing of new launches.  In addition, we cannot assure you that any new areas or
services  will be  developed in a timely or  cost-effective  manner or that they
will be successful.

RISKS ASSOCIATED WITH BRAND DEVELOPMENT

         We believe brand  identity is important to attracting and expanding our
user base,  Internet  traffic and  advertising  and commerce  relationships.  We
believe the  significance  of brand and name  recognition  will intensify as the
number of Internet sites increases. We cannot assure you that we will be able to
continue to develop our brand.

RISK OF CAPACITY CONSTRAINTS AND SYSTEM DISRUPTIONS

         The  performance  and  reliability  of our  Internet  site and  network
infrastructure  are critical to our reputation and ability to attract and retain
users,  advertisers and strategic  partners.  Any system error or failure,  or a
sudden and significant  increase in traffic, may result in the unavailability of
our site and  significantly  delay  response  times.  Individual,  sustained  or
repeated  occurrences  could result in a loss of  potential  or existing  users,
advertisers or strategic partners. In addition,  because our advertising revenue
is  expected to directly  relate to the number of  advertisements  we deliver to
users,  system  interruptions  or delays would reduce the number of  impressions
delivered and thereby reduce our revenue.

         Our  systems  and  operations  are   vulnerable  to   interruption   or
malfunction  due  to  certain  events  beyond  our  control,  including  natural
disasters, telecommunications failures and computer hacking. We also rely on Web
browsers and online service  providers to provide  Internet access to our sites.
We cannot assure you that we will be able to expand our network  infrastructure,
either  internally  or through  use of  third-party  hosting  systems or service
providers, on a timely basis sufficient to meet demand. We presently have only a
limited amount of redundant  facilities or systems,  no formal disaster recovery
plan and no sufficient business interruption  insurance to compensate for losses
that may occur.  Any  interruption  to our  systems or  operations  could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

         Substantially all of our communications  hardware and computer hardware
is located at a leased  facility  in  Burnaby,  British  Columbia,  Canada.  Our
systems are  vulnerable to damage from  earthquake,  fire,  floods,  power loss,
telecommunications  failures,  break-ins and similar events. We do not presently
have fully  redundant  systems and have not yet completed  implementing a formal
disaster recovery plan. Despite our implementation of network security measures,
our servers are also  vulnerable  to computer  viruses,  physical or  electronic
break-ins,  attempts by third parties deliberately to exceed the capacity of our
systems and similar disruptive problems. If our computer systems fail to operate
for any of these  reasons,  then we will not be able to operate  our Web site or
achieve revenues from customers and advertisers and our business will be harmed.

                                      -28-

<PAGE>

SECURITY RISKS

         Our system may be vulnerable to unauthorized  access,  computer viruses
and other security  problems.  A user who  circumvents  security  measures could
misappropriate proprietary information or cause interruptions or malfunctions in
our operations.  We may be required to expend  significant  resources to protect
against the threat of such security breaches or to alleviate  problems caused by
such  breaches.  Although we intend to continue to  implement  industry-standard
security measures, such measures may be inadequate.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

         We are not currently  subject to direct  regulation  by any  government
agency,  other than regulations  applicable to businesses  generally.  There are
currently few laws or regulations  directly  applicable to access to or commerce
on the  Internet.  However,  due to the  increasing  popularity  and  use of the
Internet,   a  number  of  legislative   and  regulatory   proposals  are  under
consideration by U.S. and Canadian federal, state, provincial, local and foreign
governmental organizations.  It is possible that a number of laws or regulations
may be adopted  with  respect to the  Internet  relating  to such issues as user
privacy,  user screening to prevent  inappropriate  uses of the Internet by, for
example, minors or convicted criminals, taxation, infringement, pricing, content
regulation, quality of products and services and intellectual property ownership
and infringement.  The adoption of any such laws or regulations may decrease the
growth in the use of the Internet, which could, in turn, decrease the demand for
our community, increase our cost of doing business, or otherwise have a material
adverse effect on our business, results of operations and financial condition.

         Moreover,  the applicability to the Internet of existing laws governing
issues  such  as  property  ownership,   copyright,   trademark,  trade  secret,
obscenity,  libel and personal  privacy is  uncertain  and  developing.  Any new
legislation or regulation,  or application or  interpretation  of existing laws,
could have a material adverse effect on our business,  results of operations and
financial condition.  There can be no assurance that any legislation will not be
enacted in the future that could expose us to substantial liability. Legislation
could also dampen the growth in the use of the Web  generally  and  decrease the
acceptance of the Web as a  communications  and  commercial  medium.  The result
could,  thereby,  have a material  adverse  effect on our  business,  results of
operations and financial condition.

         It is also  possible  that our use of  "cookies"  to track  demographic
information and user preferences and to target advertising may become subject to
laws limiting or prohibiting their use. A "cookie" is a bit of information keyed
to a specific  server,  file pathway or directory  location  that is stored on a
user's hard drive,  possibly without the user's  knowledge.  A user is

                                      -29-

<PAGE>

generally  able to remove  cookies.  Germany,  for  example,  has  imposed  laws
limiting the use of cookies,  and a number of Internet  commentators,  advocates
and governmental  bodies in the United States and other countries have urged the
passage of laws limiting or  abolishing  the use of cookies.  Limitations  on or
elimination of our use of cookies could limit our  effectiveness in targeting of
advertisements,  which  could have a material  adverse  effect on our  business,
results of operations and financial condition.

         In addition,  a number of  legislative  proposals have been made at the
U.S. and Canadian federal,  state,  provincial and local level that would impose
additional taxes on the sale of goods and services over the Internet and certain
jurisdictions have taken measures to tax Internet-related  activities.  The U.S.
Congress  enacted the Internet Tax Freedom Act on October 21, 1998 which imposes
a national  moratorium in the United States on state and local taxes on Internet
access  services,  on-line  services,  and multiple or  discriminatory  taxes on
electric  commerce  effective  October 1, 1998 and ending  three years after its
enactment.  There can be no assurance that, once such moratorium is lifted, some
type of U.S. federal and/or state taxes will be imposed upon Internet  commerce,
and there  can be no  assurance  that  such  legislation  or other  attempts  at
regulating  commerce over the Internet will not substantially  impair the growth
of commerce on the Internet and as a result, our opportunity to derive financial
benefit from these activities may be adversely affected.

         In addition to the foregoing  areas of recent  legislative  activities,
several   telecommunications    carriers   are   currently   seeking   to   have
telecommunications  over the Web  regulated by the U.S.  Federal  Communications
Commission (the "FCC") in the same manner as other telecommunications  services.
In addition, because the growing popularity and use of the Web have burdened the
existing telecommunications infrastructure and many areas with high Web use have
begun to experience  interruptions  in phone service,  local telephone  carriers
have  petitioned  the FCC to regulate ISPs and OSPs in a manner  similar to long
distance  telephone  carriers and to impose access fees on the ISPs and OSPs. If
either of these petitions is granted, or the relief sought is otherwise granted,
the costs of communicating on the Web could increase substantially,  potentially
slowing growth in use of the Web. This could,  in turn,  decrease demand for our
services or increase our cost of doing business.

         Due to the global nature of the Web, it is possible that,  although our
transmissions over the Internet originate primarily in British Columbia, Canada,
the  governments  of various  states in the United States and foreign  countries
might attempt to regulate our  transmissions  or prosecute us for  violations of
their laws.  There can be no assurance that violations of local laws will not be
alleged  or  charged  by  state  or  foreign  governments,  that  we  might  not
unintentionally violate such laws or that such laws will not be modified, or new
laws  enacted,  in the future.  Any of the foregoing  developments  could have a
material  adverse  effect on our business,  results of operations  and financial
condition.

                                      -30-

<PAGE>

         In  addition,  as our  services  are  available  over the  Internet  in
multiple foreign  countries,  provinces,  states and other  jurisdictions,  such
jurisdictions  may claim that we are  required  to qualify to do  business  as a
foreign  corporation  in each of those  jurisdictions.  We are  qualified  to do
business  only in  British  Columbia,  and our  failure  to qualify as a foreign
corporation in a jurisdiction where we are required to do so could subject us to
taxes and penalties  and could result in our  inability to enforce  contracts in
such jurisdictions.  Any such new legislation or regulation,  the application of
laws and regulations from jurisdictions whose laws do not currently apply to our
business,  or the  application of existing laws and  regulations to the Internet
and other online services could have a material  adverse effect on our business,
results of operations and financial condition.

LIABILITY FOR INFORMATION RETRIEVED FROM THE WEB; ABSENCE OF LIABILITY INSURANCE

         Because  materials  may be  downloaded  by  users  of our Web  site and
subsequently  distributed  to others,  there is a potential  that claims will be
made against us for defamation, negligence, copyright or trademark infringement,
personal injury or other theories based on the nature, content,  publication and
distribution  of these  materials,  including  financial  and other  information
disseminated by use of our Web site by the small-cap  public  companies that are
our  customers.  Such  claims  have been  brought,  and  sometimes  successfully
pressed,  against OSPs for example, in the past. We have received inquiries from
time to time from third parties  regarding such matters,  all of which have been
resolved to date without any payments or other material adverse effect on us.

         In addition, the increased attention focused upon liability issues as a
result of these  lawsuits  and  legislative  proposals  could impact the overall
growth of Internet  use. We could also be exposed to  liability  with respect to
the offering of third party content that may be accessible through our Web site,
or through content and materials that may be posted by Members on their personal
Web sites or chat rooms, or on-line discussions offered by us. Such claims might
include,  among others,  that by directly or indirectly hosting the personal Web
sites of third parties,  we are liable for copyright or trademark  infringement,
or other wrongful actions by such third parties through such Web sites.

         It is  also  possible  that  if any  third  party  content  information
provided  on our web site  contains  errors,  third  parties  could make  claims
against us for losses  incurred  in reliance  on such  information.  Even to the
extent  that  such  claims  do not  result in  liability  to us, we could  incur
significant  costs in  investigating  and  defending  against such  claims.  The
imposition  on  us  of  potential   liability  for  information  carried  on  or
disseminated  through  our systems  could  require us to  implement  measures to
reduce our  exposure to such  liability,  which may require the  expenditure  of
substantial  resources and limit the  attractiveness  of our services to Members
and visitors.

                                      -31-

<PAGE>

         Currently,  we do not carry  general  liability  insurance  intended to
protect  us from any  liability  arising  out of the  foregoing.  In any  event,
however, insurance may not cover all potential claims to which we are exposed or
may not be adequate to indemnify us for all liability  that may be imposed.  Any
imposition of liability  that is not covered by insurance or is in excess of our
insurance coverage would have a material adverse effect on our business, results
of operations  and financial  condition.  In addition,  the increased  attention
focused upon  liability  issues as a result of these  lawsuits  and  legislative
proposals could impact the overall growth of Internet use.

RELIANCE ON INTELLECTUAL PROPERTY RIGHTS

         To  establish  and  protect  our  trademark,  service  mark  and  other
proprietary rights in its products and services, we rely on a combination of:

     o   copyright, unfair competition, trademark, service mark and trade secret
         laws and

     o   confidentiality  agreements  with our licensees and other third parties
         and confidentiality agreements and policies covering its employees.

         We cannot assure you that these measures will be adequate, that we will
be  able  to  secure  registrations  for  all  of  its  marks  in  the  U.S.  or
internationally  or that third parties will not infringe upon or  misappropriate
our proprietary  rights.  Any  infringement or  misappropriation,  or litigation
relating to intellectual  property rights, may have a material adverse effect on
our business, financial condition and results of operations.

         We have applied to the United States  Trademark office for registration
of "ViaVid" as a trademark  in the United  States.  We have also  applied to the
Canada Patent and Trademark  Office for  registration of "ViaVid" as a trademark
in Canada.  No trademark has been issued to us for "ViaVid" in either the United
States or Canada.  We are not aware of any other  companies  currently using the
name  "ViaVid".  We have conducted  searches of trademark  databases in both the
United  States  and  Canada  and have not  found  any  registration  of the name
"ViaVid" as a  trademark.  There is no  assurance  that we will be able obtain a
trademark  for the  "ViaVid"  name,  or that once  obtained  it will stand up to
objections by others who have made prior use of the name.  Also, there can be no
assurance  that we will obtain any  significant  commercial  advantage from this
trademark if granted or that we will have the financial resources to protect our
rights in the name through legal  proceedings or otherwise.  It is also possible
that our  competitors  or others will adopt  product or service names similar to
"ViaVid" or other similar  service  marks or  trademarks,  thereby  impeding our
ability to build brand identity and possibly leading to customer confusion.  Our
inability to protect the name "ViaVid"  adequately could have a material adverse
effect on our business, results of operations and financial condition.

         Legal standards  relating to the validity,  enforceability and scope of
protection  of  certain  proprietary  rights in  Internet-related  business  are
uncertain and evolving.  In particular,  new registration and ownership priority
procedures  may be adopted which may make it more  difficult for us to retain or
obtain desirable domain names.

                                      -32-

<PAGE>

CONTROL BY PRINCIPAL STOCKHOLDERS AND POTENTIAL CONFLICTS OF INTEREST

         Our officers and Directors  own  approximately  72% of our  outstanding
shares of Common Stock. As a result, such persons could elect all the members of
our Board.  Such persons could also control those actions requiring the approval
of the holders of a majority of our voting  stock,  including  amendments to our
Articles  of  Incorporation   and  any  business   combinations.   Such  persons
concentration of ownership could prevent a change in control of our company that
might otherwise be beneficial to stockholders.

DIFFICULTIES IN CREATING AWARENESS OF OUR WEB SITE

         We believe that  development  and awareness of our Web site is critical
to our success in  attracting  consumers  and  advertisers.  The  importance  of
customer  awareness  will  increase  as low  barriers  to  entry  encourage  the
proliferation  of Web sites. We intend to increase our marketing and advertising
spending in order to attract and retain  users and  advertisers,  and to promote
and maintain awareness of our Web site in response to competitive pressures.  If
we are  unsuccessful in building  strong  recognition of our Web site and if our
marketing  efforts are not  successful,  we will not be successful in attracting
customers  for our Web  site and  earning  revenues  from our Web site  with the
result that our business will be harmed.

         The success of our business  will depend on  acceptance of our business
format by customers of the video production and Internet  broadcast service that
we offer. There is no assurance that potential  customers will accept the format
of our Web site. Potential customers have a variety of competing means for which
to disseminate corporate information and news, both via the Internet and through
traditional  commercial means. If we are not successful in creating an awareness
of our Web  site  and  attracting  users  to our Web  site,  then we will not be
successful in achieving revenues and our business will be harmed.

EXPENSE OF TECHNOLOGICAL DEVELOPMENTS AND EQUIPMENT UPGRADES

         The market for Internet products and services is characterized by rapid
technological developments, evolving industry standards and consumer demands. It
is possible that the  introduction  of new technology  could render our existing
Web site technology and the services we offer  obsolete.  We anticipate that the
introduction of new technology will require us to continually upgrade and change
our Web site technology in order to maintain our competitive  position and offer
competitive  services.  We anticipate that the  incorporation  of new technology
into our Web site will result in us incurring increased  operating expenses.  If
we are  required to incur these  expenses  and  increased  revenues do not match
these  expenses,  our  business  will be harmed.  If we do not  incorporate  new
technology into our Web site operations,  then our competitive  position and our
ability to attract customers and advertisers may be harmed.

                                      -33-

<PAGE>

               RISKS APPLICABLE TO THE MARKET FOR OUR COMMON STOCK

NO ACTIVE PRIOR PUBLIC  MARKET FOR COMMON  STOCK;  POSSIBLE  VOLATILITY OF STOCK
PRICE

         Prior to  January 4, 2000,  there was no active  public  market for our
Common Stock.  Since then,  our Common Stock has been quoted on the OTC Bulletin
Board.  There can be no assurance  that an active  trading market for our Common
Stock will be  sustained  or that the market  price of our Common Stock will not
decline  based upon  market or other  conditions.  The market  price may bear no
relationship  to our  revenues,  earnings,  assets or  potential  and may not be
indicative of our future business  performance.  The trading price of our Common
Stock  has  been and can be  expected  to be  subject  to wide  fluctuations  in
response to variations in our quarterly results of operations,  the gain or loss
of significant strategic relationships, unanticipated delays in our development,
changes in estimates by analysts,  announcements of technological innovations or
new solutions by us or our competitors, general conditions in the technology and
Internet sectors and in  Internet-related  industries,  other matters  discussed
elsewhere in this Annual  Report and other events or factors,  many of which are
beyond our control.

         In  addition,  the  stock  market in  general  and the  technology  and
Internet  sectors  in  particular  have  experienced  extreme  price and  volume
fluctuations  which  have  affected  the  market  price  for many  companies  in
industries  similar  or  related  to us and  which  have been  unrelated  to the
operating performance of these companies. These market fluctuations,  as well as
general economic,  political and market conditions,  may have a material adverse
effect on the market price of our Common Stock.

         In the past,  following  periods of volatility in the market price of a
company's  securities,   securities  class  action  litigation  has  often  been
instituted  against  such  companies.  Such  litigation,   if  instituted,   and
irrespective  of the outcome of such  litigation,  could  result in  substantial
costs  and a  diversion  of  management's  attention  and  resources  and have a
material  adverse  effect on our business,  results of operations  and financial
condition.

SHARES ELIGIBLE FOR FUTURE SALE

         Sales of  significant  amounts of our Common Stock in the public market
or the  perception  that such sales will or could  occur  could  materially  and
adversely  affect the market price of our Common Stock or our future  ability to
raise capital through an offering of our equity  securities.  We had, as of June
14,  2000,  6,832,000  shares  of  common  stock  outstanding.  Of such  shares,
4,911,800  shares  were held by  officers  and  Directors  of the  Company.  The
4,911,800  shares held

                                      -34-

<PAGE>

by officers and Directors are "restricted securities" as such term is defined in
Rule 144 under the  Securities  Act.  Restricted  securities  may be sold in the
public  market  only if  registered  or if they  qualify for an  exemption  from
registration  under Rules 144,  144(k) or 701  promulgated  under the Securities
Act.  Approximately  409,000 shares of our Common Stock are freely  transferable
under U.S.  Federal  securities laws and the offer and sale of 1,017,000  shares
has been registered under the Securities Act and, subject to the requirements of
the  Securities  Act  for the  selling  securityholders  to  deliver  a  current
prospectus  in  connection  with a sale  of  those  shares,  can be  sold in the
over-the-counter  market.  The sale of these shares or the perception  that such
sales will or could occur could materially and adversely affect the market price
for our Common Stock.

         On January 27,  2000,  Kathler  Holdings  Inc.,  Paul  Watkins,  Cheryl
Watkins and 549419 BC Ltd.,  our principal  shareholders,  notified us that they
sold or intend to sell an aggregate of 195,000  shares of Common Stock  pursuant
to Rule 144.  Subsequent to the sale of those  shares,  the shares become freely
transferrable under U.S. Federal securities laws.

         We have filed a Form S-8  registration  statement  under the Securities
Act to register  all shares of Common  Stock  issuable  pursuant to  outstanding
options and all shares of Common  Stock  reserved  for  issuance  under our 1999
Stock Option Plan. Such registration statement became effective immediately upon
filing in December 1999 and the shares  issuable on exercise of options  granted
under the 1999 Stock Option Plan are covered by that registration statement. The
shares  issuable on exercise of the options  granted under the Plan are eligible
for sale, subject to Rule 144 limitations  applicable to affiliates.  As of June
14,  2000,  we have  options  outstanding  under the 1999 Stock  Option  Plan to
purchase 542,000 shares at a price of $1.00 per share,  25,000 shares at a price
of $2.00  per  share,  and  125,000  shares at a price of $3.50  per  share.  An
aggregate of 186,000 shares were issued on exercise of options granted under the
1999 Stock  Option Plan on March 14 and April 12,  2000 and are  included in the
shares  described  above  that  are  freely  transferrable  under  U.S.  Federal
securities  laws. In addition,  there are 258,000 shares reserved for the future
grant of options under the Plan.  We intend to attract  employees to work for us
through the grant of options to purchase these shares.  These options granted to
attract  additional  employees  may be  immediately  exercisable  and the shares
freely  transferrable  under the Securities Act. The sale of these shares or the
preception  that such  shares  will be sold could have an adverse  effect on the
market price for our Common Stock.

         On June 7,  2000,  352,000  options  issued to a Director  and  certain
employees and consultants were repriced to $1.00.  These shares are reflected in
the 542,000 shares listed above at $1.00.

                                      -35-

<PAGE>

ITEM 7 - FINANCIAL STATEMENTS:

         The  response to this Item is  included  in a separate  section of this
report. See page F-1.

ITEM 8 - CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:

         During the fiscal year ended March 31, 2000 and the period  ended March
31, 1999, we have not filed any Current  Report on Form 8-K reporting any change
in  accountants  in which  there was a  reported  disagreement  on any matter of
accounting  principles or practices,  financial statement disclosure or auditing
scope or procedure.






                                      -36-


<PAGE>


                                    PART III

ITEM  9  -  DIRECTORS,   EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT:

         Our Directors and executive officers, their ages, and positions for the
past five years with us, as well as their employment background are as follows:

NAME                          AGE                   POSITION
----                          ---                   --------
Brian Kathler                 37                    President and Director
Paul Watkins                  36                    Director
Robert Gamon                  53                    Director
James King                    55                    Director
Cheryl Watkins                31                    Secretary and Treasurer


         Brian  Kathler has been our  President  and a Director  since  January,
1999. Mr. Kathler has served as the President and a director of our  subsidiary,
ViaVid  Broadcasting  Corp.  since  October 31,  1998.  Prior to joining us, Mr.
Kathler was a  self-employed  computer  consultant  from July, 1997 to November,
1998.  Mr.  Kathler  provided  technical  consulting  services to several public
companies  based in  Vancouver,  British  Columbia,  Canada  as a  self-employed
computer  consultant.  Mr.  Kathler was a  co-founder  and a director of Riptide
Technologies,  a company involved in the business of software  consulting,  from
1996 to July,  1997. Mr. Kathler was employed as a senior  software  engineer by
MPR Teltech,  a company involved in the business of telephone research from 1994
to 1996.  Mr.  Kathler  possesses  more than fourteen years of experience in the
computer software  development,  consulting and management  industry.  Over this
fourteen  year  period,  Mr.  Kathler  has  worked  in a number  of areas of the
software development industry ranging from programming to assisting companies in
getting started.

         Paul Watkins has been a Director since  January,  1999. Mr. Watkins has
also served as a director of our subsidiary,  ViaVid  Broadcasting  Corp., since
October 31, 1998. Mr. Watkins founded Watkins  Communications  Inc., an Internet
marketing and news dissemination company with clients in the financial industry,
in  1994.   Mr.   Watkins  has  been  the  president  and  director  of  Watkins
Communications  Inc. from 1994 to the present.  Watkins  Communications Inc. has
clients  listed on the Vancouver  Stock  Exchange,  Alberta  Stock  Exchange and
Toronto Stock Exchange for which it electronically  files and disseminates press
releases and  financial  information.  Mr.  Watkins has a background in computer
sciences  and  has  over  10  years  experience  in  the  business  of  investor
communications. Paul Watkins and Cheryl Watkins are husband and wife.

                                      -37-

<PAGE>


         Robert Gamon  joined our board of  directors on November 23, 1999.  Mr.
Gamon has been a director of our subsidiary,  ViaVid  Broadcasting  Corp.  since
November,  1998. Mr. Gamon was an investment advisor with Pacific  International
Securities of Vancouver, British Columbia from November, 1997 to November, 1999.
Mr.  Gamon  was  an  investment  advisor  with  Georgia  Pacific  Securities  of
Vancouver, British Columbia from 1991 to November, 1997.

         James King has worked in the video industry  since 1990.  From February
of 1992 to June 1999, Mr. King was President of VTR Video.  VTR manufactured and
distributed video products in Canada for major Hollywood studios.  In June 1999,
Technicolor, a manufacturer of video and optical products,  purchased VTR Video.
Mr. King continues as the head of Technicolor  Canada. Mr. King is a graduate of
The University of British Columbia,  and is a registered  Professional Engineer.
Prior to 1990 Mr.  King  worked in  management  roles  with Union  Carbide,  Gas
Products Division. He was a senior consultant with Roy Jorgensen  Associates,  a
firm specializing in Maintenance  Management systems for Cities,  Municipalities
and Provincial Governments.

         Cheryl  Watkins has been our  Secretary and  Treasurer  since  January,
1999.  Ms.  Watkins has over 10 years of experience as a legal  assistant in the
area of  securities  and  corporate  commercial  work.  She  co-founded  Watkins
Communications Inc. with her husband,  Paul Watkins, in 1994. Ms. Watkins worked
with Watkins  Communications  Inc.  from  October,  1997 to present as corporate
secretary and as an administrative  consultant to publicly traded companies. Ms.
Watkins  provided  administration  and legal  assistant  services  to  Princeton
Financial  Services from March,  1997 to July, 1998. Ms. Watkins was employed by
Gerald J.  Shields Law Corp.  from March 1996 to March,  1997 where she provided
administration  and legal  assistant and  accounting  services.  Ms. Watkins was
employed by  Strategic  Capital  from  February,  1994 to March,  1996 where she
provided administration and legal assistant and accounting services.

         Our  Directors  are elected for terms of one year to hold office  until
the next annual  meeting of the holders of our common stock,  as provided by the
Nevada  Revised  Statutes,  or until removed from office in accordance  with our
bylaws.  Our  officers are  appointed by our board of directors  and hold office
until removed by the board.

                                      -38-

<PAGE>



ITEM 10.  EXECUTIVE COMPENSATION:

SUMMARY COMPENSATION TABLE

         The following table sets forth the compensation  paid or awarded to our
President during the fiscal year ended March 31, 2000 for all services  rendered
to us in that year.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                         ANNUAL COMPENSATION                LONG-TERM COMPENSATION
                         --------------------------------------------- ------------------------------
                                             BONUS/ANNUAL  SECURITIES   LONG-TERM
        NAME AND                              INCENTIVE    UNDERLYING   INCENTIVE       ALL OTHER
  PRINCIPAL POSITION      YEAR     SALARY       AWARD       OPTIONS      PAYOUTS      COMPENSATION
-----------------------------------------------------------------------------------------------------
<S>                       <C>      <C>       <C>           <C>          <C>           <C>
Brian Kathler             1999     $39,000       -0-         (1)            -0-             -0-
                          2000     $15,000

-----------------------------------------------------------------------------------------------------
   (1) Options granted to Mr. Kathler in 1999 were cancelled in January 2000.

</TABLE>

EMPLOYMENT AGREEMENTS

         The services of Brian Kathler, our President,  are provided pursuant to
a consulting  agreement dated February 1, 2000 between Kathler  Holdings Ltd and
us.  The  following  services  of Mr.  Kathler  are  provided  pursuant  to this
agreement:  (1) general  direction and supervision of our business and financial
affairs;  (2) overall direction to our management;  (3) management of our day to
day  operations;  and (4)  performing  such  other  duties  and  observing  such
instructions  as may be  reasonably  assigned  to Mr.  Kathler  by our  Board of
Directors.  The agreement  has a term of one year.  The  compensation  we pay to
Kathler  Holdings Inc. was  increased  from $3,500 per month to $5,000 per month
effective  August 31, 1999 in accordance  with the terms of the  agreement  that
provided for a  compensation  review after six months from  commencement  of the
agreement.  The services of Mr.  Kathler under this agreement are on a full time
basis.

         The services of Paul Watkins,  a director,  are provided  pursuant to a
consulting  agreement dated February 1, 2000 between Watkins  Communications Inc
and us. The  following  services of Mr.  Watkins are  provided to us pursuant to
this agreement:  (1) the exercise of general  direction and supervision over the
marketing  and  development  of our  business;  (2)  providing  direction to our
management;  (3) assisting  with our day to day  operations;  and (4) performing
such other

                                      -39-

<PAGE>

duties and observing  such  instructions  as may be  reasonably  assigned by our
Board of Directors.  The agreement is for a term of one year.  The  compensation
that we pay to Watkins  Communications  Inc. was increased from $3,500 per month
to $5,000 per month  effective  August 31, 1999 in accordance  with the terms of
the agreement  which  provided for a  compensation  review after six months from
commencement of the agreement.  The services of Mr. Watkins under this agreement
are on a full time basis

         We employ  Cheryl  Watkins,  our Secretary  and  Treasurer,  to provide
administrative, accounting and corporate services. Ms. Watkins is an employee at
will without a written  employment  agreement,  and is paid $2,800 per month for
her services.

         The services of Robert Gamon,  a director,  are provided  pursuant to a
consulting  agreement  between us, Mr. Gamon and 595871 B.C. Ltd. dated December
1, 1999. The following services of Mr. Gamon are provided to us pursuant to this
agreement: (1) supervising the financing activities of the Company; (2) advising
the Company on its capital structure and the structure of future financings; and
(3)  performing  such other duties and  observing  such  instructions  as may be
reasonably  assigned by our Board of  Directors.  The agreement is for a term of
one year  commencing  November 1, 1999. The  compensation  that we pay to 595871
B.C.  Ltd. is $5,000 per month.  The services of Mr. Gamon under this  agreement
are on a full time basis.

         We believe that the compensation paid to Kathler Holdings Inc., Watkins
Communications  Inc.,  595871 B.C. Ltd. and Ms.  Cheryl  Watkins is below market
compensation  rates for companies in our industry.  The consultant  fees paid to
Kathler Holdings Inc. and Watkins  Communications  Inc. were increased effective
August 31, 1999 to bring these rates of remuneration  closer to market rates. We
believe that the terms of the agreements  with Kathler  Holdings  Inc.,  Watkins
Communications  Inc.,  595871 B.C. Ltd. and Ms.  Cheryl  Watkins are at least as
fair to us as would  have been  obtained  from an  unrelated  third  party in an
arms-length negotiation.

DIRECTOR AND OFFICER SECURITIES REPORTS

         The  Federal  securities  laws  require  our  Directors  and  executive
officers,  and persons who own more than ten percent (10%) of a registered class
of our equity  securities to file with the  Securities  and Exchange  Commission
initial  reports of ownership  and reports of changes in ownership of any of our
equity securities. Copies of such reports are required to be furnished to us. To
our knowledge,  based solely on a review of the copies of such reports and other
information furnished to us, all persons subject to these reporting requirements
filed the  required  reports on a timely  basis  with  respect to the year ended
March 31, 2000.

                                      -40-

<PAGE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:

         Set forth below is information concerning the Common Stock ownership of
all persons known by us to own  beneficially 5% or more of our Common Stock, and
the Common  Stock  ownership  of each of our  Directors  and all  Directors  and
officers as a group,  as of June 14, 2000. As of June 14, 2000, we had 6,832,000
shares of Common Stock outstanding.

<TABLE>
<CAPTION>

Name and Address of Beneficial Owner (1)    Number of Shares Beneficially      Percentage of Outstanding
                                                    Owned(2)                         Common Stock
----------------------------------------    -----------------------------      -------------------------
<S>                                         <C>                                <C>

Brian Kathler                                        1,635,000 (3)                            24%

Robert Gamon                                         1,635,000 (4)                            24%

Paul Watkins                                           817,500                                12%

Cheryl Watkins                                         817,500                                12%

James King                                              56,800 (5)                             1%

</TABLE>

--------------------------------
(1) Unless otherwise indicated, the address of such person is c/o the Company.
(2) For purposes of the above table,  a person is  considered  to  "beneficially
own" any shares with respect to which he or she exercises  sole or shared voting
or  investment  power  or of  which  he or she  has the  right  to  acquire  the
beneficial ownership within 60 days following June 14, 2000
(3) The 1,635,000 shares of common stock beneficially owned by Brian Kathler are
registered in the name of Kathler Holdings Inc., a private company controlled by
Mr. Kathler.
(4) The 1,635,000 shares of common stock  beneficially owned by Robert Gamon are
registered  in the name of 595871 BC Ltd., a private  company  controlled by Mr.
Gamon.
(5) Includes 50,000 shares issuable on exercise of an option at $1.00 per share.
Also  includes  5,000 shares held by Mr. King's wife, as to which he disclaims a
beneficial  interest  and 600 shares held by Mr.  King's minor  children,  as to
which he disclaims a beneficial interest.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

         We acquired our subsidiary,  ViaVid  Broadcasting Corp., on January 27,
1999 from Paul Watkins, Cheryl Watkins, 549419 BC Ltd. and Kathler Holdings Inc.
in consideration for the issue of 5,100,000 shares of our common stock issued as
follows:

o    Kathler Holdings Inc. was issued 1,700,000 shares. Kathler Holdings Inc. is
     a  private  company  controlled  by  Brian  Kathler,  our  President  and a
     Director.

                                      -41-

<PAGE>


o    Paul Watkins, a Director, was issued 850,000 shares.

o    Cheryl Watkins, our Secretary and Treasurer, was issued 850,000 shares.

o    549419 BC Ltd.  was issued  1,700,000  shares.  549419 BC Ltd. is a private
     company  controlled by Robert Gamon, a Director.  These shares are now held
     by 595871  BC Ltd.,  a  private  company  controlled  by  Robert  Gamon,  a
     Director.

         We have entered into a consulting  contract with Kathler  Holdings Inc.
for the services of Brian  Kathler,  our President and a Director.  We have also
entered into a consulting  contract  with  Watkins  Communications  Inc. for the
services of Mr. Paul Watkins, a Director, and 595871 BC Ltd. for the services of
Mr. Robert Gamon, a Director.

         We have also repaid on September  15, 1999 the  following  loans to our
shareholders and Directors:

                  Shareholder/Director                 Loan Repayment
                  --------------------                 --------------
                  Kathler Holdings Inc.                $3,240
                  549419 B.C. Ltd.                     $4,520
                  Paul Watkins                         $4,790

         We have no other loans outstanding to any of our officers, Directors or
principal shareholders.  The loans were repaid out of the proceeds from the sale
of our securities.

                                      -42-

<PAGE>


                                     PART IV

ITEM 1(a) - EXHIBITS AND REPORTS ON FORM 8-K:

      EXHIBIT                                     DESCRIPTION
---------------------              ---------------------------------------------

         3.1                       Articles of Incorporation*

         3.2                       By-Laws of the Company*

        10.1                       Acquisition  Agreement dated January 26, 1999
                                   between the Company and Mr. Paul Watkins, Ms.
                                   Cheryl Watkins, 549419 BC  Ltd.  and  Kathler
                                   Holdings Inc.*

        10.2                       Consulting  Contract  dated  February 1, 2000
                                   with Kathler Holdings Inc. and Brian Kathler.

        10.3                       Consulting  Contract  dated  February 1, 2000
                                   with  Watkins  Communications  Inc. and  Paul
                                   Watkins

        10.4                       Consulting  Contract  dated  December 1, 1999
                                   with 595871 BC Ltd. and Robert Gamon.

        21.0                       Subsidiaries of Registrant:

                                                           State or Jurisdiction
                                   None                      of Incorporation
                                   ----                    ---------------------

                                   Via Vid Broadcasting      British Columbia
                                          Corp.

        27.0                       Financial Data Schedule
--------------------------
*   Filed as an exhibit to the Registrant's Registration Statement on Form 10-SB
filed June 29, 1999 (File No. 0-26535).

(b) Reports on Form 8-K

      The  Registrant  has not filed  any  Current  Reports  on Form 8-K for the
quarter ended March 31, 2000.

                                      -43-

<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
and  Exchange  Act of 1934,  the  Registrant  has duly  caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                            VIAVID BROADCASTING, INC.

                        BY: /s/ Brian Kathler
                            -------------------------------------------
                            Brian Kathler, PRESIDENT

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Company and in the capacities and on the dates indicated.

SIGNATURE                           TITLE                              DATE

 /s/Brian Kathler           President (Principal                   June 28, 2000
-------------------------   Executive Officer and Principal
Brian Kathler               Financial and Accounting Officer
                            and Director)



 /s/ Paul Watkins           Director                               June 28, 2000
-------------------------
Paul Watkins

 /s/ Robert Gamon           Director                               June 28, 2000
-------------------------
Robert Gamon

/s/ James King              Director                               June 28, 2000
-------------------------
James King

                                      -44-

<PAGE>

                            VIAVID BROADCASTING INC.
                          (A DEVELOPMENT STAGE COMPANY)



                        CONSOLIDATED FINANCIAL STATEMENTS



                                 MARCH 31, 2000





                                      F-1



<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Shareholders of
ViaVid Broadcasting Inc.
(A Development Stage Company)

We have audited the consolidated  balance sheets of ViaVid  Broadcasting Inc. as
at  March  31,  2000  and  1999  and  the  related  consolidated  statements  of
operations,  changes in  stockholders'  equity and cash flows for the year ended
March 31,  2000 and for the period  from the start of the  development  stage on
January 20, 1999 to March 31, 2000. These consolidated  financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the  United  States of  America.  Those  standards  require  that we plan and
perform an audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion,  these consolidated  financial statements present fairly, in all
material  respects,  the financial  position of the Company as at March 31, 2000
and 1999 and the results of its operations and the changes in its  stockholders'
equity and its cash flows for the year ended  March 31,  2000 and for the period
from the start of the development stage on January 20, 1999 to March 31, 2000 in
accordance with generally accepted accounting principles in the United States of
America.

The accompanying  financial  statements have been prepared  assuming that ViaVid
Broadcasting  Inc. will continue as a going  concern.  As discussed in Note 2 to
the  financial   statements,   the  Company's  losses  from  operations   raises
substantial  doubt as to the  Company's  ability to continue as a going  concern
unless  the  Company  attains  future   profitable   operations  and/or  obtains
additional  financing.  The financial  statements do not include any adjustments
relating to the recoverability and classification of assets and liabilities that
might result from the outcome of this uncertainty.

                                                            "DAVIDSON & COMPANY"

Vancouver, Canada                                          Chartered Accountants

June 16, 2000

                          A Member of SC INTERNATIONAL
                          ----------------------------
     Suite 1200, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372,
                 Pacific Centre, Vancouver, BC, Canada, V7Y 1G6
                   Telephone (604) 687-0947 Fax (604) 687-6172


                                      F-2
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
AS AT MARCH 31

<TABLE>
<CAPTION>
================================================================================
                                                      2000            1999
--------------------------------------------------------------------------------
<S>                                             <C>               <C>
ASSETS

CURRENT
  Cash                                           $   134,540        $163,406
  Accounts receivable                                  6,164           6,841
  Prepaid expenses                                    13,045              --
                                                 -----------        --------

                                                     153,749         170,247

CAPITAL ASSETS (Note 5)                              183,740          17,510
                                                 -----------        --------

                                                 $   337,489        $187,757
================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT
  Accounts payable and accrued liabilities          $ 31,794        $  6,866
  Due to related parties                              17,780           8,459
                                                 -----------        --------

                                                      49,574          15,325
                                                 -----------        --------

SHAREHOLDERS' EQUITY
  Capital stock (Note 6)
    Authorized
     25,000,000 common shares with a
     par value of $0.001 per share
    Issued and outstanding
     6,652,000 common shares
      (1999 - 5,884,000 common shares)                 6,652           5,884
  Additional paid-in capital                       1,358,077         238,216
  Deficit accumulated during the
    development stage                             (1,076,814)        (71,668)
                                                 -----------        --------

                                                     287,915         172,432
                                                 -----------        --------

                                                 $   337,489        $187,757
================================================================================
</TABLE>

NATURE OF OPERATIONS (Note 1)

SUBSEQUENT EVENTS (Note 11)



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

                                      F-3

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
================================================================================
                                     Period From
                                   Incorporation                     Period From
                                              on                   Incorporation
                                     January 20,                      on January
                                         1999 to       Year Ended    20, 1999 to
                                       March 31,        March 31,      March 31,
                                            2000             2000           1999
--------------------------------------------------------------------------------
<S>                                 <C>               <C>          <C>
REVENUE
    Broadcast and web income         $    48,080       $   44,644    $    3,436
    Interest income                        5,504            5,504            --
                                     -----------       ----------    ----------

                                          53,584           50,148         3,436
                                     -----------       ----------    ----------

EXPENSES
    Amortization                          39,549           31,500         8,049
    Consulting                           306,428          269,614        36,814
    Equipment rental                       7,764            6,563         1,201
    Foreign exchange                       4,022            4,022            --
    Graphic design                        12,737           12,737            --
    Internet fees                         40,429           39,007         1,422
    Office and miscellaneous              62,804           57,204         5,600
    Professional fees                    113,652          103,721         9,931
    Rent                                  55,306           47,508         7,798
    Salaries and benefits                102,764           98,475         4,289
    Stock based compensation             337,629          337,629            --
    Travel and promotion                  47,314           47,314            --
                                     -----------       ----------    ----------

                                       1,130,398        1,055,294        75,104
                                     -----------       ----------    ----------

LOSS FOR THE PERIOD                  $(1,076,814)     $(1,005,146)   $  (71,668)
===============================================================================

LOSS PER SHARE                                        $     (0.16)   $    (0.01)
===============================================================================

WEIGHTED AVERAGE SHARES OUTSTANDING                     6,241,852     5,187,143
===============================================================================
</TABLE>



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


                                      F-4
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
============================================================================================================
                                               Common Stock                           Deficit
                                        ---------------------------               Accumulated
                                                                     Additional    During the
                                             Number                     Paid-in   Development
                                          of Shares        Amount       Capital         Stage          Total
------------------------------------------------------------------------------------------------------------
<S>                                       <C>         <C>           <C>           <C>            <C>

Shares issued on acquisition (Note 4)     5,100,000   $     5,100   $        --   $        --    $     5,100

Shares issued for cash                      500,000           500         4,500            --          5,000

Shares issued for cash                      100,000           100        49,900            --         50,000

Shares issued for cash                      184,000           184       183,816            --        184,000

Loss for the period                              --            --            --       (71,668)       (71,668)
                                        -----------   -----------   -----------    -----------    -----------

BALANCE AT MARCH 31, 1999                 5,884,000         5,884       238,216       (71,668)       172,432

Shares issued for cash                      768,000           768       782,232            --        783,000

Stock-based compensation for
    options issued to consultants
    and non-employees                            --            --       337,629            --        337,629

Loss for the period                              --            --            --    (1,005,146)    (1,005,146)
                                        -----------   -----------   -----------   -----------    -----------

BALANCE AT MARCH 31, 2000                 6,652,000   $     6,652   $ 1,358,077   $(1,076,814)   $   287,915
============================================================================================================
</TABLE>

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


                                      F-5
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
===================================================================================================================================
                                                                                Period From
                                                                              Incorporation                             Period From
                                                                                         on                           Incorporation
                                                                                January 20,                              on January
                                                                                    1999 to          Year Ended         20, 1999 to
                                                                                  March 31,           March 31,           March 31,
                                                                                       2000                2000                1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES
    Loss for the period                                                         $(1,076,814)        $(1,005,146)        $   (71,668)
    Items not affecting cash
       Amortization                                                                  39,549              31,500               8,049
       Stock based compensation                                                     337,629             337,629                  --

    Changes in non-cash working capital items
       (Increase) decrease in accounts receivable                                    (6,164)                677              (6,841)
       (Increase) decrease in prepaid expenses                                      (13,045)            (13,045)                 --
       Increase in accounts payable and accrued liabilities                          31,794              24,928               6,866
                                                                                -----------         -----------         -----------

    Net cash used in operating activities                                          (687,051)           (623,457)            (63,594)
                                                                                -----------         -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of capital assets                                                  (217,854)           (197,730)            (20,124)
    Acquisition of subsidiary                                                          (335)                 --                (335)
                                                                                -----------         -----------         -----------

    Net cash used in investing activities                                          (218,189)           (197,730)            (20,459)
                                                                                -----------         -----------         -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from shares issued                                                   1,022,000             783,000             239,000
    Loans from related parties                                                       17,780               9,321               8,459
                                                                                -----------         -----------         -----------

    Net cash provided by financing activities                                     1,039,780             792,321             247,459
                                                                                -----------         -----------         -----------

CHANGE IN CASH FOR THE PERIOD                                                       134,540             (28,866)            163,406

CASH, BEGINNING OF PERIOD                                                                --             163,406                  --
                                                                                -----------         -----------         -----------

CASH, END OF PERIOD                                                             $   134,540         $   134,540         $   163,406
===================================================================================================================================

</TABLE>

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 11)


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

                                      F-6
<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

1.   NATURE OF OPERATIONS

     ViaVid Broadcasting Inc., a Nevada corporation, was incorporated on January
     20, 1999. On January 27, 1999,  the Company  completed the  acquisition  of
     ViaVid  Broadcasting  Corp.,  a Canadian  company  operating in  Vancouver,
     British Columbia, Canada.

     The Company was  incorporated  in order to create a global  internet  video
     broadcasting  company  that  offers a network of video  services  utilizing
     streaming video technology.

2.   GOING CONCERN

     As at March 31, 2000, the Company has an accumulated deficit of $1,076,814.
     The  Company's  ability to  continue  as a going  concern is  dependent  on
     continued  financial support in the form of loans from its shareholders and
     other  related  parties,  the  ability  of  the  Company  to  raise  equity
     financing,  and the attainment of profitable  operations.  Management is of
     the opinion that sufficient  working capital will be obtained from external
     financing and further share issuances to meet the Company's  liabilities as
     they become due.

     These  consolidated  financial  statements  have been  prepared  on a going
     concern basis,  which assumes the  realization of assets and liquidation of
     liabilities  in the normal  course of  business.  They do not  include  any
     adjustments  to the  recoverability  and  classification  of recorded asset
     amounts  and  liabilities  that might be  necessary  should the  Company be
     unable to continue as a going concern.

3.   SIGNIFICANT ACCOUNTING POLICIES

     In preparing  these  consolidated  financial  statements in conformity with
     generally accepted accounting  principles,  management was required to make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities  and disclosure of contingent  assets and liabilities as of the
     date of the balance  sheet and revenues  and expenses for the year.  Actual
     results in future periods could be different  from these  estimates made in
     the current year. The following is a summary of the significant  accounting
     policies of the Company:

     PRINCIPLES OF CONSOLIDATION

     These consolidated financial statements include the accounts of the Company
     and its wholly-owned subsidiary,  ViaVid Broadcasting Corp. All significant
     inter-company balances and transactions have been eliminated.

     REPORTING ON COSTS OF START-UP ACTIVITIES

     In April 1998,  the American  Institute of  Certified  Public  Accountant's
     issued  Statement  of  Position  98-5  "Reporting  on the Costs of Start-Up
     Activities" ("SOP 98-5") which provides guidance on the financial reporting
     of start-up  costs and  organization  costs.  It requires costs of start-up
     activities and organization  costs to be expensed as incurred.  SOP 98-5 is
     effective for fiscal years  beginning  after December 15, 1998 with initial
     adoption  reported  as the  cumulative  effect  of a change  in  accounting
     principle. The Company adopted SOP 98-5 during the current period.

                                      F-7

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

3.   SIGNIFICANT ACCOUNTING POLICIES (cont'd...)

     CAPITAL ASSETS

     Capital  assets are  recorded at cost and are  amortized  over their useful
     lives on the declining balance method at the following rates:

        Computer equipment                                  30%
        Office furniture                                    20%
        Telephone and video equipment                       20%

     FINANCIAL INSTRUMENTS

     The Company's financial  instruments consist of cash, accounts  receivable,
     accounts payable and accrued liabilities and due to related parties. Unless
     otherwise noted, it is management's opinion that the Company is not exposed
     to  significant  interest,  currency  or credit  risks  arising  from these
     financial  instruments.  The  fair  value of  these  financial  instruments
     approximate their carrying values, unless otherwise noted.

     REVENUE RECOGNITION

     Revenue is  recognized  once the  filming and editing of a project has been
     completed.

     FOREIGN CURRENCY TRANSLATION

     The Company accounts for foreign  currency  transactions and translation of
     foreign  currency   financial   statements  under  Statement  of  Financial
     Accounting  Standards No. 52, "Foreign Currency  Translation"  ("SFAS 52").
     Transaction  amounts  denominated  in foreign  currencies are translated at
     exchange rates prevailing at transaction dates. Carrying values of monetary
     assets and  liabilities  are adjusted at each balance sheet date to reflect
     the exchange rate at that date.  Non-monetary  assets and  liabilities  are
     translated at the exchange rate on the original transaction date. Gains and
     losses from  restatement  of foreign  currency  monetary  and  non-monetary
     assets and  liabilities  are included in income.  Revenues and expenses are
     translated at the rates of exchange  prevailing on the dates such items are
     recognized in earnings.

     SEGMENTED INFORMATION

     In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
     No.  131,   "Disclosures  About  Segments  of  an  Enterprise  and  Related
     Information."  SFAS No. 131  establishes  standards for the manner in which
     public companies report  information about operating segments in annual and
     interim financial  statements.  The statement is effective for fiscal years
     beginning after December 15, 1997.

     The Company conducts  substantially  all of its operations in Canada in one
     business segment.

     LOSS PER SHARE

     In February 1997, the Financial Accounting Standards Board issued Statement
     of Financial  Accounting  Standards  No. 128,  "Earnings  Per Share" ("SFAS
     128").  Under  SFAS 128,  basic and  diluted  earnings  per share are to be
     presented.  Basic  earnings  per  share  is  computed  by  dividing  income
     available to common  shareholders by the weighted  average number of common
     shares  outstanding  in the year.  Diluted  earnings  per share  takes into
     consideration common shares outstanding  (computed under basic earnings per
     share) and potentially dilutive common shares.

                                      F-8

<PAGE>

VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

3.   SIGNIFICANT ACCOUNTING POLICIES (cont'd...)

     INCOME TAXES

     Income  taxes are  provided  in  accordance  with  Statement  of  Financial
     Accounting Standards No. 109, "Accounting for Income Taxes". A deferred tax
     asset or  liability  is  recorded  for all  temporary  differences  between
     financial and tax reporting and net operating loss carryforwards.  Deferred
     tax  expenses  (benefit)  results  from the net  change  during the year of
     deferred tax assets and liabilities.

     Deferred  tax assets are  reduced by a  valuation  allowance  when,  in the
     opinion of management,  it is more likely than not that some portion or all
     of the deferred  tax assets will not be  realized.  Deferred tax assets and
     liabilities  are  adjusted for the effects of changes in tax laws and rates
     on the date of enactment.

     STOCK-BASED COMPENSATION

     Statement  of  Financial  Accounting  Standards  No. 123,  "Accounting  for
     Stock-Based  Compensation,"  encourages, but does not require, companies to
     record  compensation cost for stock-based  employee  compensation  plans at
     fair value. The Company has chosen to account for stock-based  compensation
     using  Accounting  Principles  Board Opinion No. 25,  "Accounting for Stock
     Issued to Employees."  Accordingly  compensation  cost for stock options is
     measured as the excess, if any, of the quoted market price of the Company's
     stock at the date of the grant over the amount an  employee  is required to
     pay for the stock.

     ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

     In June 1998, the Financial  Accounting Standards Board issued Statement of
     Financial   Accounting   Standards  No.  133   "Accounting  for  Derivative
     Instruments  and  Hedging   Activities"   ("SFAS  133")  which  establishes
     accounting  and reporting  standards  for  derivative  instruments  and for
     hedging activities. SFAS 133 is effective for all fiscal quarters of fiscal
     years beginning after June 15, 1999. In June 1999, the FASB issued SFAS 137
     to defer the effective date of SFAS 133 to fiscal  quarters of fiscal years
     beginning  after June 15, 2000.  The Company does not  anticipate  that the
     adoption of the statement  will have a significant  impact on its financial
     statements.

     COMPREHENSIVE INCOME

     In June  1997,  the FASB  issued  SFAS No.  130,  "Reporting  Comprehensive
     Income".  SFAS No. 130 establishes  standards for the reporting and display
     of comprehensive  income and its components (revenue,  expenses,  gains and
     losses).  The  purpose of  reporting  comprehensive  income is to present a
     measure of all changes in stockholders'  equity that result from recognized
     transactions and other economic events of the year, other than transactions
     with owners in their  capacity  as owners.  SFAS No. 130 is  effective  for
     financial  statements issued for periods beginning after December 15, 1997.
     The adoption of SFAS 130 had no impact on total stockholders' equity during
     the current period.

4.   ACQUISITION OF VIAVID BROADCASTING CORP.

     On January  27,  1999,  the Company  completed  the  acquisition  of ViaVid
     Broadcasting  Corp.  ("VBC"), a related company having common directors and
     officers.  VBC is a Canadian company incorporated under the laws of British
     Columbia  on July 26,  1994.  VBC was  inactive  from  incorporation  until
     October 30, 1998 when it changed its name from 477504 British Columbia Ltd.
     to ViaVid Broadcasting Corp.

     The Company acquired VBC pursuant to a share exchange agreement whereby the
     Company agreed to issue 5,100,000  common shares to the shareholders of VBC
     in exchange for their 3,000 common  shares.  The Company has  accounted for
     this transaction as a capital  transaction.  For accounting  purposes,  the
     financial  statements of the Company and its  subsidiary are deemed to have
     been combined for the prior and current accounting  periods. As of the date
     of  acquisition,  VBC held no significant  assets and  liabilities  and the
     accumulated losses to January 27, 1999 was $335.

                                      F-9

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

5.       CAPITAL ASSETS

<TABLE>
<CAPTION>


     =======================================================================================================================

                                                                                            Accumulated             Net Book
                                                                              Cost         Amortization                Value
     -----------------------------------------------------------------------------------------------------------------------
     <S>                                                                 <C>                   <C>                   <C>

     2000
       Computer equipment                                                 $130,423             $ 23,915             $106,508
       Office furniture                                                     10,739                2,064                8,675
       Telephone and video equipment                                        76,692                8,135               68,557
                                                                          --------             --------             --------

                                                                          $217,854             $ 34,114             $183,740
                                                                          ========             ========             ========
     1999
       Computer equipment                                                 $ 12,034             $  1,805             $ 10,229
       Office furniture                                                      5,503                  550                4,953
       Telephone and video equipment                                         2,587                  259                2,328
                                                                          --------             --------             --------

                                                                          $ 20,124             $  2,614             $ 17,510
     =======================================================================================================================

</TABLE>


6.   CAPITAL STOCK

     The Company issued shares of common stock for the period from incorporation
     on January 20, 1999 to March 31, 1999 as follows:

       In  January  1999,  in  connection   with  the   acquisition   of  ViaVid
       Broadcasting  Corp.,  the Company issued 5,100,000 shares of common stock
       under Regulation D, subject to Rule 144 of the Securities Act of 1933, as
       amended, with a value of $5,100.

       In February 1999, the Company  completed an offering of 500,000 shares of
       common stock under  Regulation  D, subject to Rule 504 of the  Securities
       Act of 1933, as amended, and realized proceeds of $5,000.

       In February 1999, the Company  completed an offering of 100,000 shares of
       common stock under  Regulation  D, subject to Rule 504 of the  Securities
       Act of 1933, as amended, and realized proceeds of $50,000.

       In February 1999, the Company  completed an offering of 184,000 shares of
       common stock under  Regulation  D, subject to Rule 504 of the  Securities
       Act of 1933, as amended, and realized proceeds of $184,000.

     The Company  issued  shares of common stock during the year ended March 31,
     2000 as follows:

       In October 1999,  the Company issued 295,000 shares of common stock under
       Regulation  S of the  Securities  Act of 1933,  as amended,  and realized
       proceeds of $295,000.

       In November 1999, the Company issued 202,000 shares of common stock under
       Regulation  S of the  Securities  Act of 1933,  as amended,  and realized
       proceeds of $202,000.

       In December  1999, the Company issued 40,000 shares of common stock under
       Regulation  D,  subject  to Rule 504 of the  Securities  Act of 1933,  as
       amended, and realized proceeds of $40,000.

                                      F-10

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

6.   CAPITAL STOCK (cont'd...)

       In January 2000, the Company issued 225,000 shares of common stock on the
       exercise of stock options and realized proceeds of $225,000.

       In March 2000,  the Company  issued  6,000  shares of common stock on the
       exercise of stock options and realized proceeds of $21,000.

7.   RELATED PARTY TRANSACTIONS

       The Company entered into the following transactions with related parties:

       a) Paid consulting fees as follows:

          o $142,731 (1999 - $21,747) to three directors of the Company
          o $22,938 (1999 - $6,574) to an officer of the Company

       b) Paid salary of $32,624 (1999 - $4,015) to an officer of the Company.

       c) During the period ended March 31,  1999,  the Company  purchased  from
          three directors,  computer equipment totalling $4,410. During the year
          ended March 31, 2000,  these same  directors had advanced loans to the
          Company  totalling  $17,780  (1999  -  $4,049).   These  advances  are
          unsecured and are non-interest bearing,  therefore,  the fair value of
          the amounts owed to the directors are not determinable.

8.   INCOME TAXES

     The Company's total deferred tax asset is as follows:

================================================================================

Net operating loss carry forward                                     $  441,170
Valuation allowance                                                    (441,170)
                                                                     ----------

                                                                     $       --
================================================================================

     The Company has an operating loss  carryforward of  approximately  $451,365
     which  expires  in  the  year  2019.  The  Company's   subsidiary,   ViaVid
     Broadcasting   Corp.,  has  Canadian   operating  losses   carryforward  of
     approximately  $625,488 which expire in the year 2007. The Company provided
     a full  valuation  allowance  on the  deferred  tax  asset  because  of the
     uncertainty regarding realizability.

9.   STOCK-BASED COMPENSATION EXPENSE

     Statement  of  Financial  Accounting  Standards  No. 123,  "Accounting  for
     Stock-Based  Compensation",  encourages  but does not require  companies to
     record  compensation cost for stock-based  employee  compensation  plans at
     fair value. The Company has chosen to account for stock-based  compensation
     using  Accounting  Principles  Board Opinion No. 25,  "Accounting for Stock
     Issued to Employees".  Accordingly,  compensation cost for stock options is
     measured as the excess,  if any, of quoted  market  price of the  Company's
     stock  at the  date  of  grant  over  the  option  price.  No  stock  based
     compensation has resulted from the use of this standard.

                                      F-11

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

9.   STOCK-BASED COMPENSATION EXPENSE (cont'd...)


     Following is a summary of the status of the plan during 1999 and 2000:

================================================================================

<TABLE>
<CAPTION>
                                                                        Weighted
                                                                         Average
                                                          Number        Exercise
                                                       of Shares           Price
     ---------------------------------------------------------------------------
<S>                                                   <C>              <C>

         Outstanding at March 31, 1999                        --         $    --
             Granted                                   1,407,000            1.81
             Forfeited                                  (534,000)          (1.04)
             Exercised                                  (231,000)          (1.04)
                                                       ---------

         Outstanding at December 31, 1999                642,000            2.72
     ===========================================================================
</TABLE>

     The weighted average fair value of options granted to non-employees  during
     the current period is approximately $2.76 per share.

     Following  is a summary of the status of options  outstanding  at March 31,
     2000:

<TABLE>
<CAPTION>
     ===========================================================================

                           Outstanding Options               Exercisable Options
                      -----------------------------------    -------------------

                                    Weighted
                                     Average    Weighted                Weighted
                                   Remaining     Average                 Average
                                 Contractual    Exercise                Exercise
     Exercise Price    Number           Life       Price        Number     Price
     ---------------------------------------------------------------------------
<S>                   <C>        <C>             <C>          <C>        <C>
     $ 1.00           200,000           2.8       $ 1.00       200,000    $ 1.00
       3.50           267,000           2.9         3.50       204,000      3.50
       3.50            50,000          2.11         3.50        50,000      3.50
       3.50           125,000           3.0         3.50       125,000      3.50

     ===========================================================================
</TABLE>

     NON-VESTED STOCK OPTIONS

     The Company has granted  options to purchase  63,000 shares of common stock
     exercisable  at $3.50  per  share  that  vest  and  become  exercisable  in
     allotments  of 21,000  shares  every  three  months  from April 19, 2000 to
     October 19, 2000.

                                      F-12

<PAGE>

VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

9.   STOCK-BASED COMPENSATION EXPENSE (cont'd...)



     COMPENSATION

     Had  compensation  cost for employees been  recognized on the basis of fair
     value pursuant to Statement of Financial  Accounting Standards No. 123, net
     loss and loss per share would have been adjusted as follows:

     ===========================================================================

       NET LOSS
         As reported                                           $(1,005,146)
                                                               ===========

         Pro forma                                             $(1,147,834)
                                                               ===========

       BASIC AND DILUTED LOSS PER SHARE
         As reported                                           $     (0.16)
                                                               ===========

         Pro forma                                             $     (0.18)
     ===========================================================================

     The fair value of each option granted is estimated  using the Black Scholes
     Model. The assumptions used in calculating fair value are as follows:

     ===========================================================================

     Risk-free interest rate                                    5.554% - 6.484%%
     Expected life of the options                                        2 years
     Expected volatility                                                     50%
     Expected dividend yield                                                 --
     ===========================================================================

     The Company  accounts for stock issued to  non-employees in accordance with
     the provisions of SFAS 123 and the emerging  issues task force consensus in
     issued No. 96 - 18 "Accounting  for Equity  Instruments  that are Issued to
     Other Than Employees for Acquiring or in Conjunction with Selling, Goods or
     Services".

     The Company granted 407,000 options to third party  consultants  during the
     current  period and  accordingly,  using the Black Scholes  Option  pricing
     model,  the stock based  compensation  recognized  during the period  ended
     March 31,  2000 was  $337,629.  This  amount  can be  allocated  to another
     expense category in the accompanying  consolidated statements of operations
     as consulting fees.

                                      F-13

<PAGE>


VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

================================================================================

10.  SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

     ===========================================================================

                                                    March 31,        March 31,
                                                         2000             1999
     ---------------------------------------------------------------------------

     Cash paid for income taxes                         $ --           $    --
     ===========================================================================

     Cash paid for interest                             $ --           $    --
     ===========================================================================

     The following  non-cash  operating,  investing  and financing  transactions
     occurred during the period ended March 31, 1999:

     a) The Company issued 5,100,000 shares of common stock at a deemed value of
        $5,100 for the acquisition of ViaVid Broadcasting Corp.

     There were no non-cash operating,  investing and financing transactions for
     the year ended March 31, 2000.

11.  SUBSEQUENT EVENTS

     The following events occurred subsequent to March 31, 2000:

     a)   In April 2000,  the Company  issued  180,000 shares of common stock on
          the exercise of stock options and realized proceeds of $180,000.

     b)   In April 2000,  the Company  granted  stock options to a consultant to
          acquire 50,000 shares of common stock at $2.00 per share,  exercisable
          until April 10, 2003.

     c)   In May 2000,  the Company  granted a stock option to a  consultant  to
          acquire 25,000 shares of common stock at $2.00 per share,  exercisable
          until May 4, 2003.

     d)   In June 2000,  the Company  repriced  302,000  stock options that were
          granted at $3.50 per share to $1.00 per share and  repriced  the stock
          options of 50,000  shares  described in (b) above from $2.00 per share
          to $1.00 per share.

                                      F-14