U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

/ X /       QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
            EXCHANGE ACT OF 1934


            For the quarterly period ended February 29, 2000


/   /       TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

            For the transition period from __________ to _______________

            Commission file number:             1-13360



                     CORNERSTONE INTERNET SOLUTIONS COMPANY
        (Exact name of small business issuer as specified in its charter)


            DELAWARE                                          22-3272662
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)


                             584 Broadway, Suite 509
                    (Address of Principal Executive Offices)

                                 (212) 343-3920
                (Issuer's Telephone Number, Including Area Code)


            Check whether the issuer: (1) filed all reports required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.

YES / X /   NO  /  /

            State  the  number  of shares  outstanding  of each of the  issuer's
classes of common equity, as of the latest practicable date:

                                                   Number Outstanding
           Title of Class                          as of March  31, 2000
      Common Stock, $.01 Par Value                      25,104,311

Transitional Small Business Disclosure Format: Yes / /      No /X/


<PAGE>
                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

                                                                            Page
Item 1     Financial Statements

           Consolidated Balance Sheets at February 29, 2000
           and May 31, 1999                                                   3

           Consolidated Statements of Operations for the
           three-month periods ended February 29, 2000
           and February 28, 1999.                                             4

           Consolidated Statements of Operations for the
           nine-month periods ended February 29, 2000 and
           February 28, 1999.                                                 5

           Consolidated Statements of Cash Flows for the
           nine-month periods ended February 29, 2000 and
           February 28, 1999.                                                 6


           Notes to Financial Statements                                      7

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                               10


,
PART II - OTHER INFORMATION

                                                                           Page

Item 1.    Legal Proceedings                                                 13

Item 2.    Change in Securities and Use of Proceeds                          13

Item 3.    Defaults upon Senior Securities                                   13

Item 4.    Submissions of Matters to a Vote by Security Holders              13

Item 5.    Other Information                                                 13

Item 6.    Exhibits and Reports on Form 8-K                                  13


SIGNATURES                                                                   14



                                       2
<PAGE>

CORNERSTONE INTERNET SOLUTIONS COMPANY and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                                 February 29,                May 31,
                                                                                     2000                     1999
                                                                             ----------------------    --------------
ASSETS                                                                              (unaudited)
Current Assets:

<S>                                                                                <C>                <C>
      Cash and cash equivalents                                                    $15,359,193        $     2,939,596
       Investments                                                                     198,206                398,348
      Accounts receivable, net                                                       1,449,769              1,024,624
      Other receivables                                                                 46,507                 20,587
      Prepaid expenses and other                                                       129,763                 49,475
                                                                            -------------------     ------------------
         Total current assets                                                       17,183,438              4,432,630

Affiliation rights, net                                                                172,500                191,667
Property and equipment, net                                                          1,396,720                671,182
Other                                                                                  140,421                200,920
                                                                            -------------------     ------------------
                                                                                 $  18,893,079        $     5,496,399
                                                                            -------------------     ------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:

      Current maturities of long-term debt                                              26,102       $        104,954
      Accounts payable                                                                 939,848                830,397
      Accrued payroll and related expenses                                             183,628                124,866
      Other accrued expenses                                                           287,437                462,592
      Other current liabilities                                                        101,351                 30,000
                                                                            -------------------     ------------------
         Total current liabilities                                                   1,538,366              1,552,809
Long-term debt, excluding current maturities                                                 -                  1,465
                                                                            -------------------     ------------------
          Total liabilities                                                          1,538,366              1,554,274
                                                                            -------------------     ------------------


Minority interest                                                                    8,802,899                938,838


Stockholders' Equity:
    Preferred stock, $.01 par value,
    2,000,000 shares authorized;
           Class C, 20 and 540 shares issued and outstanding
           at February 29, 2000 and May 31,1999                                            -                        5
           Class D, 20 and 8,040 shares issued and outstanding
            at February 29, 2000 and May 31, 1999, liquidation
            preference of $27,500 at February 29, 2000.                                    -                       80

    Common stock, $.01 par value, 50,000,000 shares
           authorized and 25,028,187 and 13,121,013 shares
           issued and outstanding at February 29, 2000 and
          May 31, 1999                                                               250,282                  131,210
    Additional paid-in capital                                                    46,385,138               36,018,294
    Deferred consulting expense                                                     (286,180)                        -
    Accumulated other comprehensive income                                           198,206                  398,348
    Accumulated deficit                                                          (37,995,632)             (33,544,650)
                                                                            -----------------       ------------------
          Total stockholders' equity                                               8,551,814                3,003,287
                                                                            -----------------       ------------------
                                                                               $  18,893,079          $     5,496,399
                                                                            -----------------       ------------------
</TABLE>

    See notes to consolidated financial statements.

                                       3
<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Operations
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                  Three months ended
                                                            February 29,            February 28,
                                                                2000                   1999
                                                            --------------------    ------------

<S>                                                        <C>                  <C>
Internet services revenues                                 $    514,715         $   835,839
Subscription revenue                                             27,928                   -
                                                           --------------------------------
       Total revenues                                           542,643             835,839
                                                           ================================

Research and development (excludes stock
  compensation of $4,254)                                       228,774
Cost of Services Revenue                                      1,094,120             891,337
Marketing, sales, and support (excludes stock
  compensation of $26,728)                                    1,082,390             124,731
General and administrative expenses (excludes
  stock compensation of $333,794)                               870,824             414,304
Stock Compensation                                              364,776
                                                           --------------------------------
       Total costs and expenses                               3,640,884           1,430,372
                                                           ================================


Operating loss                                               (3,098,241)           (594,533)
                                                           --------------------------------

Other income (expense):
      Interest income                                            51,532                   -
      Interest expense                                           (1,021)             (1,676)
      Gain on sale of investments, net                                                    -
      Other income (expense), net                               (20,883)                392
                                                           --------------------------------
Loss before income taxes                                     (3,068,613)           (595,817)

Provision for income taxes                                            -                   -

Minority interest in net loss of subsidiary, net               (221,929)                  -
                                                           ================================

Net loss                                                     (3,290,542)           (595,817)

Preferred stock dividends and preferences                             -            (844,250)
                                                           --------------------------------

Net loss  to common stockholders                            $(3,290,542)        $(1,440,067)
                                                           ================================


Basic and diluted loss per share                            $      (.15)        $      (.12)
                                                           --------------------------------

Weighted average shares of common stock                      22,613,423          12,106,040
                                                           --------------------------------

</TABLE>


See notes to consolidated financial statements

                                       4

<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>

                                                             Nine months ended
                                                     February 29,              February 28,
                                                         2000                      1999
                                                    ----------------------------------------

<S>                                                 <C>                        <C>
Internet services revenues                          $  2,538,901               $  2,369,339
Subscription revenue                                      41,323                       --
Software licensing and royalty revenue                      --                       38,000
                                                    ============               ============
       Total revenues                                  2,580,224                  2,407,339
                                                    ============               ============

Research and development (excludes stock
  compensation of $4,254)                                228,774
Cost of Services Revenue                               3,043,012                  3,129,354
Marketing, sales, and support (excludes stock
  compensation of $26,728)                             1,640,640                    383,260
General and administrative expenses (excludes
  stock compensation of $409,128)                      2,515,840                  1,493,208
Stock Compensation                                       440,110
                                                    ------------               ------------
       Total costs and expenses                        7,868,376                  5,005,822
                                                    ------------               ------------


Operating loss                                        (5,288,152)                (2,598,483)
                                                    ------------               ------------

Other income (expense):
      Interest income                                     88,715                        865
      Interest expense                                    (4,666)                    (9,800)
      Gain on sale of investments, net                   728,750                       --
      Other income (expense), net                        (39,372)                    (7,395)
                                                    ============               ============
Loss before income taxes                              (4,514,725)                (2,614,813)

Provision for income taxes                                  --                         --

Minority interest in net loss of subsidiary, net        (665,787)                      --

                                                    ============               ============
Net loss                                              (5,180,512)                (2,614,813)

Preferred stock dividends and preferences                 (6,750)                (1,830,700)

                                                    ------------               ------------
Net loss  to common stockholders                    $ (5,187,262)              $ (4,445,513)
                                                    ------------               ------------


Basic and diluted loss per share                    $       (.31)              $       (.38)
                                                    ------------               ------------

Weighted average shares of common stock               16,631,522                 11,556,781
                                                    ------------               ------------

</TABLE>


See notes to consolidated financial statements

                                       5
<PAGE>

             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                          Nine Months Ended
                                                                                   February 29,       February 28,
                                                                                      2000               1999
                                                                                ----------------------------------

Cash flows from operating activities
<S>                                                                             <C>                  <C>
Net loss                                                                        $ (5,180,512)        $ (2,614,813)
Adjustments to reconcile net loss to net cash used in operating activities
     Depreciation and amortization                                                   378,286              199,500
     Non-cash consulting expense                                                     440,110               19,200
     Minority interest in net loss of consolidated subsidiary                        665,787                 --
     Gain on sale of investments                                                    (669,670)                --
Changes in assets and liabilities
     Accounts receivable                                                            (425,145)            (800,718)
     Other receivables                                                               (95,000)              79,413
     Prepaid expenses and other                                                      (70,288)             162,023
     Other assets                                                                     60,500              (36,720)
     Accounts payable                                                                109,450              (28,857)
     Accrued expenses                                                               (116,393)            (142,667)
     Deferred revenue                                                                   --                 (9,300)
     Other                                                                            56,591                 --
                                                                                                     ------------
                                                                                                     ------------
           Net cash used in operating activities                                  (4,846,284)          (3,172,939)
                                                                                                     ------------
                                                                                                     ------------

Cash flows from investing activities
      Purchases of property and equipment                                         (1,084,657)             (40,073)
      Proceeds from sale of investments                                              728,750                 --
                                                                                                     ------------
                                                                                                     ------------
           Net cash provided by (used in) investing activities                      (355,907)             (40,073)
                                                                                                     ------------
                                                                                                     ------------

Cash flows from financing activities
       Proceeds from issuances of common and preferred stock                      14,040,112            3,457,800
       Proceeds from exercise of stock options                                     3,661,993               41,305
       Proceeds from exercise of warrants                                            578,335
       Principal payments of long-term debt                                          (80,317)             (73,823)
                                                                                                     ------------
            Net cash provided by financing activities                             17,621,788            4,003,617
                                                                                                     ------------
            Net increase (decrease) in cash and cash equivalents                  12,419,597              790,605

Cash and cash equivalents
      Beginning of period                                                          2,939,596              392,200
                                                                                ============         ============

      End of period                                                             $ 15,359,193         $  1,182,805
                                                                                ------------         ------------
</TABLE>

See notes to consolidated financial statements

                                       6

<PAGE>
                     CORNERSTONE INTERNET SOLUTIONS COMPANY
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


            General

1.       The accompanying  unaudited consolidated financial statements have been
         prepared in accordance with the instructions to Form 10-QSB, and in the
         opinion of  management  contain  all  adjustments  (consisting  of only
         normal  recurring  entries)  necessary to present  fairly the financial
         position of Cornerstone Internet Solutions Company (the "Company"), and
         subsidiaries  as of February 29, 2000 and the results of its operations
         and its cash flows for the three and nine month periods ended  February
         29,  2000  and  February  28,  1999.   Certain   information  and  note
         disclosures  normally  included  in  financial  statements  prepared in
         accordance  with generally  accepted  accounting  principles  have been
         omitted. The interim  consolidated  financial statements should be read
         in conjunction with the Company's consolidated financial statements and
         related  notes in the May 31, 1999 Annual  Report on Form  10-KSB.  The
         results for the three month and nine month periods  ended  February 29,
         2000 are not  necessarily  indicative of the results to be obtained for
         the full year.

2.       Business

         On July 2, 1998,  the  Company's  shareholders  ratified a proposal  to
         change  the  Company's  name  from  Enteractive,  Inc.  to  Cornerstone
         Internet  Solutions  Company.  Headquartered in New York, New York, the
         Company  is  a  provider  of  business   solutions  based  on  Internet
         technologies.  The Company's  address is 584  Broadway,  Suite 509, New
         York, NY 10012 and its Internet address is www.crstone.com

         On  December 4, 1996,  the Company  signed  multiple  market  affiliate
         agreements        with        USWeb/CKS        Corporation,         now
         marchFIRST.com,("marchFIRST.com")  and paid  $625,000  for the right to
         operate USWeb/CKS affiliate offices in New York City, and certain other
         markets in the Northeast  portion of the United States,  for a ten-year
         period. The operation,  which has been conducting business as USWeb/CKS
         Cornerstone and recently as marchFIRST.com Cornerstone, provides a full
         range of Internet and Intranet-based business solutions,  including Web
         site  design,  hosting and  management,  design and  implementation  of
         database and e-commerce solutions, educational programs and Web-related
         strategic  consulting.  The Company is obligated to pay  marchFIRST.com
         monthly fees equal in the aggregate to 7% of adjusted  gross  revenues,
         as defined in its various agreements with marchFIRST.com,  but not less
         than certain contractual minimum fees

         On February 17, 1999, the Company formed B2Bgalaxy.com, Inc. ("B2B") as
         a wholly owned  subsidiary  of the Company.  Financing for B2B included
         net proceeds of $2,122,957  in April 1999 from the sale of  convertible
         Preferred Stock,  and $14,040,112 from the private  placement of common
         stock in  February  2000.  See "Note  8-Subsidiary  Transactions".  The
         Company   established   B2B  to  leverage  its  expertise  in  business
         consulting,  Internet  technology  and the  development of business and
         e-commerce solutions to create  industry-specific  business-to-business
         e-commerce   marketplaces   that  link  buyers  and   sellers   through
         competitive on-line exchanges with a focus on improving  profitability.
         In May 1999, B2B introduced FOODgalaxy.com, the first such marketplace,
         designed to lower the cost of food and  supplies  for  restaurants  and
         other food  service  providers  through  increased  price  competition.
         Launched in July, 1999,  FOODgalaxy.com  enables  restaurants to post a
         customized  inventory list online and requires suppliers to continually
         submit their latest product bids. This competitive  process is designed
         to decrease  the cost of goods to buyers and  significantly  reduce the
         time traditionally devoted to the comparative price shopping process.

         The accompanying  consolidated  financial statements have been prepared
         assuming  that  the  Company  will  continue  as a going  concern.  The
         Company's  continuing losses from operations could impact the Company's
         ability to meet its  obligations  as they become due. In November 1998,
         the Company  consummated  a private  placement of 1,600 shares of newly
         created  Class D  Preferred  Stock for net  proceeds  of  approximately
         $1,970,000.  In April  1999 B2B  received  $2,122,957  from the sale of
         Preferred Stock,  and $15,000,113 from the private  placement of common
         stock in early 2000, of which  $14,040,112  was received as of February
         29,2000.  Between  December  1,  1999 and  February  2000  the  Company
         received  $1,786,480  from the  exercise of options and  warrants.  The
         Company  recently  hired  a CEO  to  manage  the  Cornerstone  Internet
         Services division as part of its plan to attain profitability.  The B2B
         segment will  continue to incur  losses as it builds its customer  base
         and market share.

3.       Affiliation Rights

         Fees for affiliation  rights were paid to marchFirst.com  for the right
         to join the marchFirst.com network and operate as an affiliate. The fee
         is  being  amortized  over  the  10-year  life  of the  agreement  with
         marchFirst.com.  Affiliation  rights at  February  29, 2000 were net of
         accumulated amortization of $137,500.

                                       7
<PAGE>

4.       Use of Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions   that  affect  the  reported  amount  of  assets  and
         liabilities and disclosures of contingent assets and liabilities at the
         date of the financial  statements  and the reported  amount of revenues
         and expenses during the reporting  period.  Actual results could differ
         from those estimates.

5.       Convertible Preferred Stock Class D

         On  November  10, 1998 the Company  raised  $1,969,900,  net of related
         expenses,  through  a  private  placement  of 1,600  shares  of Class D
         Convertible  Preferred  Stock  (Class D Preferred  Stock) at a purchase
         price of $1,250 per share.  The holders of Class D Preferred Stock have
         the right,  at any time  commencing  after the  earlier of (I) June 30,
         2000 or (II) if the closing  price of the common  stock shall have been
         at least $1.50 per share on 15 trading  days during any  20-consecutive
         trading day period,  to convert  each share of Class D Preferred  Stock
         into such whole number of shares of common stock equal to the aggregate
         stated value of the Class D Preferred Stock to be converted  divided by
         $1.00, subject to adjustment. Each share of Class D Preferred Stock has
         a  liquidation  preference  of $1,375 per share.  The Class D Preferred
         Stock is entitled to vote on all  matters  submitted  to the holders of
         the Company's common stock, at 1,250 votes per share, pays no dividends
         and is not redeemable. In the third quarter of fiscal 1999, the closing
         price of the Company's  Common Stock was at least $1.50 per share on 15
         trading days during a consecutive 20 day trading period and accordingly
         the holders of Class D Preferred Stock have the  unrestricted  right to
         convert each share of Class D Preferred  Stock as described  above.  In
         fiscal 1999, the Company issued 7,320 shares of Class D Preferred Stock
         in exchange  for Class B and Class C  Preferred  Stock.  During  fiscal
         1999,  880  shares  of Class D  Preferred  Stock  were  converted  into
         1,100,000 shares of Common Stock.  Between December 3, 1999 and January
         6, 2000,  8,020 shares of Class D Preferred  Stock were  converted into
         10,025,000  shares of Common Stock. As of February 29, 2000, there were
         20  shares  of Class D  Preferred  Stock  issued  and  outstanding  and
         convertible into 25,000 shares of Common Stock.

6.       Convertible Preferred Stock Class A and C

         On December 12, 1996, the Company  completed a private  placement of 84
         units,  each  unit  consisting  of 80  shares  of  Class A  Convertible
         Preferred  Stock (Class A Preferred)  and 50,000 common stock  purchase
         warrants to purchase in the aggregate  4,200,000 shares of Common Stock
         at an exercise price of $4.00 per share and expiring  December 13, 2001
         (the   "Warrants").   Proceeds   from  the   private   placement   were
         approximately  $7,869,100,  net of related  expenses of  $531,000.  The
         Class A Preferred Stock has a stated value of $1,250 per share.

         On November 19,  1997,  the Company  offered to exchange the  4,200,000
         Warrants for common stock (the "Exchange Offer"),  whereby for each 2.8
         warrants  exchanged,  the Company issued one share of its Common Stock.
         In connection with the Exchange Offer, the Company received the written
         consent of the participating  preferred stockholders to amend the terms
         of the Class A  Preferred  to delay the date when the Class A Preferred
         Stock can first be converted into common stock from May 1, 1998 to July
         1,  1999  and  modify  certain  redemption  features  of  the  Class  A
         Preferred.  Holders  of 6,260  shares  of the Class A  Preferred  Stock
         agreed to the terms of the Exchange Offer. As a result,  on February 6,
         1998, the Company issued  1,397,323  shares of common stock in exchange
         for the  cancellation  of  3,912,500  Warrants.  The fair  value of the
         common  stock  issued  approximated  the  fair  value  of the  canceled
         Warrants.  Subsequently,  the Company  redesignated the 6,260 shares of
         Class A Preferred  held by the  stockholders  who approved the Exchange
         Offer as Class C Convertible Preferred Stock (Class C Preferred).  Such
         preferred  shareholders  were entitled to receive a dividend at 12% per
         year of the stated  value of the Class C Preferred  for the period from
         April 30, 1998 to June 30, 1999.  In  accordance  with the terms of the
         Preferred   Stock  exchange  offer  discussed   below,   all  dividends
         associated  with  Class  C  Preferred   exchanged  were   relinquished.
         Dividends  are payable in common  stock and for those Class C Preferred
         shares still  outstanding  after the  exchange  offer,  such  dividends
         amounted  to $81,000 for the year ended May 31, 1999 and $6,750 for the
         nine months ended  February 29, 2000. In July,  1999 the Company issued
         40,213  shares of Common Stock in full payment of the  Preferred  Stock
         dividends.

         As of  February  29,  2000,  there were 20 shares of Class C  Preferred
         Stock  outstanding,  which are convertible into 20,205 shares of Common
         Stock.  Each share of Class C Preferred is  convertible  into the whole
         number of shares of common stock equal to the aggregate stated value of
         the Class C Preferred  Stock to be  converted  divided by the lesser of
         (i) $2.00 or (ii) 50% of the average closing price for the common stock
         for the last ten  trading  days in the fiscal  quarter  of the  Company
         prior to such conversion.  The Company has the option to redeem all, or
         any portion of on a pro rata basis,  the Class C Preferred  at any time
         upon 30 days prior written notice,  at a redemption price equal to 110%
         of the stated value.

         The conversion  rate of the Class C Preferred  (when  calculated on the
         basis of  dividing  the stated  value by $2.00 only) will be subject to
         adjustments  to  protect  against   dilution  in  the  event  of  stock
         dividends,  stock splits,  and certain other events.  In July, 1999 and
         February,  2000 500 and 20 shares of Class C Preferred  were  converted
         into 505,132 and 20,205 shares of common stock respectively.

         On April 27,  1998,  the  Company  notified  the holders of the Class A
         Preferred  that the Company  would redeem the  remaining  460 shares of
         outstanding  Class A Preferred  as of May 28, 1998 at a price per share
         equal to 1.1  multiplied  by the stated  value of each share of Class A
         Preferred.  Holders of 340 shares of Class A Preferred  exercised their
         right to convert such Class A Preferred  Stock to Common  Stock,  which
         resulted  in the  issuance  of 348,361  shares of common  stock in June
         1998. 120 shares of Class A Preferred were redeemed for $165,000 in May
         1998.

                                       8
<PAGE>

         In October 1998, the Company offered to exchange one share of its Class
         D Preferred Stock for one share of Class C Preferred Stock.  There were
         6,260 shares of Class C Preferred Stock  outstanding at the time of the
         offer.  On November 25, 1998 the Company issued 5,720 shares of Class D
         Preferred  Stock in  exchange  for a like  amount of Class C  Preferred
         Stock pursuant to the exchange offer.

7.       Private Placement of Common Stock
         On July  24,  1998 the  Company  consummated  a  private  placement  of
         1,768,750  unregistered  shares of Common Stock,  for $1 per share. The
         net proceeds of the offering were approximately $1,487,900.


8.       Subsidiary Transactions

         In fiscal 1999 B2B received  from a third party $37,064 of fixed assets
         in exchange for 20.6% of its common shares outstanding,  which resulted
         in  an  increase  in  the  Company's  paid-in-capital  of  $27,369.  In
         addition,  on April  30,  1999 B2B sold  2,400  shares  of  convertible
         preferred stock ("Preferred Stock") for net proceeds of $2,122,957. The
         stated  value  of a share  of the  Preferred  Stock  is  $1,000.  B2B's
         Preferred Stock has a liquidation  preference equal to its stated value
         and, upon liquidation, the holders may exchange each share of Preferred
         Stock  for 400  shares  of the  Company's  Common  Stock in lieu of the
         liquidation preference. If such an exchange occurs, the Company has the
         option  exercisable  until  September  30, 2000 to purchase  any of the
         Preferred  Stock at 1.5 times the stated value of the Preferred  Stock.
         The  Preferred  Stock does not  provide  for  dividends  and has voting
         rights  equal to the number of shares of common  stock into which it is
         convertible. If by September 30, 2000 B2B consummates a public offering
         of equity  in  excess of $5  million,  each  share of  Preferred  Stock
         automatically  converts  into  1,667  shares of B2B's  Common  Stock or
         converts  based on 75% of the  Common  Share  price  in the  financing,
         whichever  results in a higher number of Common Shares. If B2B does not
         consummate the financing by September 30, 2000,  then the holder of the
         Preferred  Stock must at their option  either  convert  each  Preferred
         Share  into  1,667  Common  Shares of B2B or 400  Common  Shares of the
         Company.  If the holder elects Company  Common Stock,  the Company will
         have the option prior to the conversion to purchase the Preferred Stock
         at 1.5 times stated value.

         In February 2000 B2B  consummated a private  placement of  unregistered
         Common  Stock  for  $2.80  per  share,  resulting  in net  proceeds  of
         $14,975,113,  of which  $14,040,112  was received on or before February
         29,2000.

                                       9
<PAGE>

         As a result of the above transactions, at February 29, 2000 the Company
         owned  49.9%  of  B2B's  common  stock  or 38%  of  B2B,  assuming  the
         conversion  of  B2B's   Preferred   Stock.   The  results  of  B2B  are
         consolidated  with those of the  Company and the  minority  interest is
         presented in the  accompanying  consolidated  balance sheet. Due to the
         insignificance of the minority common shareholders'  investment in B2B,
         the consolidated  financial  statements  reflect  approximately  97% of
         B2B's net loss for fiscal  February  28, 1999 and B2B's entire net loss
         for the nine months ended February 29, 2000.

         Based on the market price of the Company's  Common Stock on the date of
         issuance,  B2B's Preferred Stock had a non-cash  beneficial  conversion
         feature of  $1,257,600.  Such portion of the proceeds was  allocated to
         additional  paid-in  capital  and will be  recognized  as an expense in
         minority  interest over the seventeen month period from the issuance of
         B2B's  Preferred  Stock to  September  30,  2000,  the first  date that
         conversion to the Company's common stock can occur. The amortization is
         calculated  using the effective  interest  method,  increases  minority
         interest   in  the   consolidated   balance   sheet  and   amounted  to
         approximately $666,000 for the nine months ended February 29, 2000.

9.       Non-Cash Consulting Expense
         On October 28, 1999 options to purchase  400,000 shares of Common Stock
         were granted to consultants  with an exercise price of $2.69. The total
         cost  computed  under the Black  Scholes  method  was an  aggregate  of
         $452,000 which was recorded as deferred consulting expense and is being
         expensed over the six month vesting  period.  This  transaction  has no
         impact on total stockholders' equity.

         In the nine months ended February 29, 2000, options to purchase 165,500
         shares of B2Bgalaxy  Common Stock were granted to certain  providers of
         outside  services who agreed to accept  compensation  in stock options.
         The  exercise  prices  range  from  $.60 to $2.00,  and the total  cost
         computed  under the Black Scholes  method was an aggregate of $273,902,
         which was recorded as deferred consulting expense and is being expensed
         over the shorter of the vesting  period or the period of service.  This
         transaction has no impact on total stockholders' equity.


10.      Subsequent Events
         Subsequent to February 29, 2000 and through April 7, 2000,  and options
         to  purchase  55,139  shares of  Common  Stock at an  average  price of
         $1.4335 were exercised.

11.      Segment Information
         The Company  adopted SFAS No. 131,  "Disclosures  about  Segments of an
         Enterprise and Related Information".  Reportable operating segments are
         determined based on the Company's management  approach.  The management
         approach,  as  defined  by SFAS No.  131,  is based on the way that the
         chief  operating   decision-maker  organizes  the  segments  within  an
         enterprise for making  operating  decisions and assessing  performance.
         While the Company's  results of operations are primarily  reviewed on a
         consolidated basis, the chief operating decision-maker also manages the
         enterprise in two segments:  (I) Internet Business  Solutions  Segment,
         (II) B2B Marketplace  Segment.  The Internet Business Solutions Segment
         provides  a  full  range  of  Internet  and   Intranet-based   business
         solutions,  including Web site design,  hosting and management,  design
         and  implementation of database and e-commerce  solutions,  educational
         programs and  Web-related  strategic  consulting.  The B2B  Marketplace
         Segment  creates  industry-specific   business-to-business   e-commerce
         marketplaces that link buyers and sellers through  competitive  on-line
         exchanges with a focus on improving profitability. Eliminations consist
         of intercompany balances.

                                       9

<PAGE>
                       Nine Months Ended February 29, 2000

<TABLE>
<CAPTION>

                                    B2B Marketplace      Internet Business   Eliminations        Total
                                         Segment            Solutions
                                                             Segment


<S>                                     <C>                <C>                                <C>
Net revenues                            $   41,323         $2,538,901                         $2,580,224

Operating loss                          (2,889,138)        (2,399,014)                        (5,288,152)

Interest income                             53,941             34,774                             88,715

Interest expense                                 -              4,666                              4,666

Depreciation and amortization              188,586            189,700                            378,286

Expenditures for long lived assets         903,118            181,539                          1,084,657

Total assets                            15,033,158          5,339,971        (1,480,050)      18,893,079
</TABLE>

                      Three Months Ended February 29, 2000
<TABLE>
<CAPTION>

                                    B2B Marketplace    Internet Business   Eliminations     Total
                                         Segment          Solutions
                                                           Segment

<S>                                    <C>                <C>                             <C>
Net revenues                           $   27,928         $514,715                        $542,643

Operating loss                         (1,564,259)      (1,504,354)                     (3,098,241)

Interest income                            29,966           21,566                          51,532

Interest expense                                -            1,021                           1,021

Depreciation and amortization              95,837           68,245                         164,082

Expenditures for long lived assets        304,128          105,820                         409,948

Total assets                           15,033,158        5,339,971        (1,480,050)   18,893,079
</TABLE>

In the prior year there was only the Internet Business Solutions segment.

12.      Comprehensive Income
         The  amounts  related to  investments  reported in net income and other
         comprehensive  income for the nine months  ended  February 29, 2000 are
         comprised of the following:
<TABLE>
<CAPTION>

         Net income:
<S>                                                                       <C>
              Gain on sale of investments                                 $  728,750
                                                                          ----------
         Other comprehensive income:
              Holding gain arising during period, net of tax                  96,203
              Reclassification adjustment, net of tax                       (296,345)
                                                                         -----------
                   Net loss recognized in other comprehensive income        (200,142)
                                                                         -----------
         Total impact on comprehensive income                             $  528,608
                                                                         ===========
</TABLE>

Item 2   Management's Discussion and Analysis of Financial Condition and Results
         of Operations
The discussion and analysis should be read in conjunction with the Consolidated
Financial Statements of Cornerstone Internet Solutions Company and Subsidiaries
and Notes to the Consolidated Financial Statements included elsewhere in this
Form 10-QSB.

Results of  Operations  - Nine Months  Ended  February 29, 2000 and February 28,
1999

Revenues-Revenues  were  $2,580,224  and  $2,407,339,  in the nine months  ended
February 29, 2000,  and February 28, 1999,  respectively.  Despite the year over
year increase in revenues during the third quarter,  Internet  Services revenues
for the quarter ended  February  29,2000 were lower than the same quarter of the
prior  fiscal  year.  This  decrease  reflects the reversal of $220,000 of prior
quarter  revenue due to a settlement  with a customer,  as well as the result of
not realizing  anticipated  contracts from both new and existing customers.  The
loss of  development  and  project  management  personnel  led to the  Company's
inability to efficiently  fulfill its  contracts.  Revenues  include  $41,323 of
subscription  revenue  derived  from its B2B  Marketplace  Segment.  The Company
anticipates  that  revenues  will be  impacted  in the future by its  ability to
expand its  services in  existing  accounts  in both  segments,  and to grow its
client base.  There were three customers that  individually  comprised more than
10% of revenue and in the aggregate amounted to 23% of accounts receivable as of
February 29, 2000,  and 43% of total revenues for the nine months ended February
29, 2000. Delays in meeting project  milestones in the Internet Services Segment
adversely  impacted  billing  and  collections,  resulting  in  higher  Accounts
Receivable.  The loss of any of these  customers  would have a material  adverse
effect on the results of operations of the Company.
                                       10

<PAGE>
Expenses
Cost of Services Cost of services were  $3,043,012 and  $3,129,354,  in the nine
months ended  February 29, 2000 and  February  28, 1999,  respectively.  Cost of
Internet Services revenues as a percentage of related revenues decreased to 118%
from 130% of related  revenues in the nine months  ended  February  29, 2000 and
February  28, 1999,  respectively,  due to  increased  volume and improved  cost
management. The Company expects that as it secures additional contracts the cost
of services as a percentage of revenues will continue to decrease.

Marketing,  sales,  and support  Marketing,  sales,  and support  expenses  were
$321,897  and  $383,260  for  the  Internet  Business  Solutions  Segment,   and
$1,318,743, and $0 for the Company's B2B Marketplace Segment for the nine months
ended  February  29, 2000 and  February  28,  1999,  respectively.  The increase
results from the  consolidation of B2B formed in the last quarter of fiscal 1999
and from  increases  in personnel to support the growth of the Company and B2B's
operations.

General and  Administrative  Expenses General and  administrative  expenses were
$2,515,840  and  $1,493,208  in the nine  months  ended  February  29,  2000 and
February 28, 1999, respectively. The 68% increase relates primarily to the added
cost  resulting  from  the  Company's  B2B  Marketplace  Segment  consisting  of
personnel  and  overhead  costs to support the  development  of the B2B segment.
During the nine months  ended  February  29,  2000,  general and  administrative
expenses incurred by the B2B Marketplace Segment were $1,244,555.

Research and Development  Research and development expenses were $228,774 in the
nine months ended February 29, 2000, and $0 in the same  nine-month  period last
year.  These  costs  are  related  to  the  development  of  the  Company's  B2B
Marketplace Segment.

Stock Compensation Stock compensation  expenses were $440,110 and $0,in the nine
months ended February 29,2000 and February 28,1999, respectively. These expenses
reflect  agreements  with  providers  of  certain  outside  services  to  accept
compensation in stock options.  Of this amount,  $301,332  applies to options in
the Company,  arising from services provided to the Internet Business Solutions,
and $138,389  applies to B2Bgalaxy  stock options,  granted in  compensation  of
services  provided to support  the B2B  Marketplace  Segment.  The total cost of
these  non-cash  items was  computed  under the  Black  Scholes  method to be an
aggregate of  $725,902,  and is being  expensed  over the shorter of the service
period or the vesting period, which varies by vendor.

Other Income and (Expense) Other income and (expense) was $773,427 and ($16,330)
in the nine months ended  February 29, 2000 and February 28, 1999  respectively.
The  primary  factor in the other  income for the  current  fiscal  year was the
$728,750 gain on sale of investments.

Gain on sale --In November 1999 the Company received $728,750 in income from the
sale of common  stock  from the  exercise  of  warrants  held by the  Company in
another entity.

Income tax benefit No income tax benefit was  recorded in the nine months  ended
February  29, 2000 and  February  29,  1999.  Using the  standards  set forth in
Financial  Accounting  Standard No. 109,  management cannot currently  determine
whether the Company  will  generate  taxable  income  during the period that the
Company's net operating loss carry forward may be applied  towards the Company's
taxable  income,  if any.  Accordingly,  the Company has established a valuation
allowance against all of its deferred tax assets.


Quarterly results -Quarter Ended February 29, 2000 and February 28, 1999

The Company expects its quarterly  results to vary  significantly in the future.
The number of customer  contracts  signed and the ability of the solutions to be
readily implemented by the development staff  significantly  influence revenues.
Further  market  acceptance of the  Company's  offerings is dependent on (1) the
growth and utilization of the Internet as a medium for commerce, (2) the success
of  marchFIRST.com in establishing and positioning the  marchFIRST.com  brand in
the territories  where the Company operates (3) the degree of market  acceptance
of the Company's offerings and (4) the success of offerings by competitors.  The
Company  does not expect  seasonal  factors  to be a  significant  influence  on
revenues.

Revenues-Revenues were $542,643 and $835,839, in the quarters ended February 29,
2000 and February 28, 1999, respectively. The decrease in revenues is the result
of a reversal of $220,000 of prior  quarter  revenue due to a settlement  with a
client.  Revenue also includes $27,928 of subscription  revenue derived from its
B2B Marketplace  Segment. The Company anticipates that revenues will be impacted
in the future by its ability to expand its  services in  existing  accounts  and
grow its client base. There were four customers that individually comprised more
than 10% of revenue for the  quarter,  and in the  aggregate  amounted to 48% of
accounts  receivable as of February 29, 2000, and 94% of gross  revenues  before
settlement  for the three  months ended  February  29, 2000.  The loss of any of
these  customers  would  have  a  material  adverse  effect  on the  results  of
operations of the Company.
                                       11

<PAGE>

Expenses
Cost of Services Cost of services were $1,094,120 and $891,337,  in the quarters
ended February 29, 2000, and February 28, 1999,  respectively.  Cost of Services
expenses as a percentage  of related  revenues  increased to 202 % from 107 % of
related  revenues in the quarters ended February 29, 2000 and February 28, 1999,
respectively due to decreased volume and personnel turnover. The Company expects
that as it secures additional  contracts the cost of revenues as a percentage of
revenues will decrease.

Marketing,  Sales, and Support  Expenses-Marketing,  sales, and support expenses
were $167,294,  and $124,731 for the Internet Business Segment, and $915,096 and
$0 for the B2B Marketplace  Segment, in the quarters ended February 29, 2000 and
February 28, 1999,  respectively.  The increase  results from the initial sales,
marketing, and support expenses for the B2B Segment.

General and  Administrative  Expenses General and  administrative  expenses were
$870,824 and $ 414,304 in the quarters ended February 29, 2000, and February 28,
1999,  respectively.  The 110% increase relates primarily to the added personnel
and overhead costs to support the growth of the B2B operation.  During the three
months ended February 29, 2000, general and administrative  expenses incurred by
the Company's B2B Marketplace Segment were $341,260.

Stock  Compensation  Stock  compensation  expenses  were  $364,776 and $0,in the
quarters  ended  February  29,2000 and  February  28,1999,  respectively.  These
expenses reflect agreements with providers of certain outside services to accept
compensation in stock options.  Of this amount,  $226,387  applies to options in
the Company,  arising from services provided to the Internet Business Solutions,
and $138,389  applies to B2Bgalaxy  stock options,  granted in  compensation  of
services  provided to support  the B2B  Marketplace  Segment.  The total cost of
these  non-cash  items was  computed  under the  Black  Scholes  method to be an
aggregate of  $725,902,  and is being  expensed  over the shorter of the service
period or the vesting period, which varies by vendor.

Other Income and (Expense)  Other income and (expense) was $29,628 and ($ 1,284)
in the quarters ended February 29, 2000 and February 28, 1999 respectively.

Income tax  benefit No income tax benefit was  recorded  in the  quarters  ended
February  29, 2000 and  February  28,  1999.  Using the  standards  set forth in
Financial  Accounting  Standard No. 109,  management cannot currently  determine
whether the Company  will  generate  taxable  income  during the period that the
Company's net operating loss carry forward may be applied  towards the Company's
taxable  income,  if any.  Accordingly,  the Company has established a valuation
allowance against all of its deferred tax assets.


Liquidity and Capital Resources
Since June 1, 1999,  the  Company's  principal  sources of capital  have been as
follows:

     (i)    On July 24, 1998,  the Company  consummated  a private  placement of
            1,768,750  unregistered  shares of Common Stock for $1.00 per share.
            The net proceeds of the offering were approximately $1,487,900.

    (ii)    On November 10, 1998, the Company consummated a private placement of
            1,600 shares of newly created Class D Preferred Stock for $1,250 per
            share. Net proceeds to the Company were $1,969,900.

    (iii)   In fiscal 1999, the Company  received  $991,373 from the exercise of
            warrants  and  options,  and in the nine months  ended  February 29,
            2000, the Company received  $3,661,993 from the exercise of warrants
            and options.  Subsequent to February 29, 2000, the Company  received
            $79,039.75 from the exercise of options and warrants.

     (iv)   On April  30,1999,  B2B  received net  proceeds of  $2,122,957  in a
            private  placement  from the sale of 2,400  shares of B2B  Preferred
            Stock.

      (v)   On February 29, 2000  B2Bgalaxy.com  consummated a private placement
            of  5,357,180  shares of Common  Stock for $2.80 per share.  The net
            proceeds of the offering were  approximately  $14,975,113,  of which
            $14,040,112 was received by February 29, 2000.

The Company had cash and cash  equivalents  of  $15,359,193  and  $2,939,596  at
February 29, 2000 and May 31, 1999,  respectively.  The increase of  $12,419,597
primarily  reflects the B2Bgalaxy private placement of 5,357,180 shares,  offset
by the funding of operating activities,  purchases of property and equipment and
payments  of  long-term  debt of $80,317.  Accounts  receivable  increased  from
$1,024,624 as of May 31, 1999 to $1,449,769 as of February 29, 2000, an increase
of 41%,  due to delays in meeting  projects  milestones,  which in turn  delayed
billing and collections. Capital expenditures were $1,084,657 and $40,073 in the
nine months ended  February 29, 2000 and  February  28, 1999  respectively.  The
increase is primarily related to the development of the B2B Marketplace Segment.
                                       12

<PAGE>

The Company  anticipates that capital  expenditures will continue to increase as
revenues  increase  as a result of  equipping  staff or  contractors  to service
customers.

The  Company's  continuing  losses from  operations  could impact the  Company's
ability to meet its  obligations as they become due. The  Independent  Auditors'
report for the fiscal year ended May 31, 1999 includes an explanatory  paragraph
regarding the Company's  ability to continue as a going concern.  As part of its
business  plan to enhance  liquidity,  the Company  has  reduced  its  operating
expenses related to its Internet Business Solutions Services,  and is continuing
its  activities  designed to increase its revenues.  The Company or B2B also may
also seek to obtain  additional funds for operations.  However,  these funds may
not be sufficient to meet the Company's or B2B's  longer-term cash  requirements
for  operations.  In addition  there can be no assurance that the Company or B2B
will be able to obtain additional financing. Based on management's assessment of
the  demand  for  Internet  based   professional   services,   the  Company  may
significantly  alter the level of expenses.  Management  believes  that based on
funds on hand at February  29, 2000 and  anticipated  revenues,  operations  can
continue until at least through December 2000.

New Accounting Pronouncement
The Company will implement the  provisions of Statement of Financial  Accounting
Standards  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities",  as amended by Statement of Financial Accounting Standards No. 137,
in fiscal year 2001, for which the Company is presently  assessing its impact on
the consolidated financial statements, if any.

Year 2000 Compliance
To date, the Company has not  encountered  any  significant  effects of the Year
2000 problem,  either internally or with third parties.  This does not guarantee
that problems will not occur in the future or have not yet been detected.

Forward looking statements
This Form 10-QSB contains certain forward-looking  statements within the meaning
of Section 27A of the  Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the  safe  harbors   created   thereby.   Investors  are   cautioned   that  all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the ability of the Company to develop its products,  the success of
its marchFIRST.com  Cornerstone subsidiary and of its B2Bgalaxy.com  subsidiary,
as well as general  market  conditions,  competition  and pricing.  Although the
Company believes that the assumptions underlying the forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
included in this Form 10-QSB will prove to be accurate.  In light of significant
uncertainties  inherent in the  forward-looking  statements included herein, the
inclusion of such information  should not be regarded as a representation by the
Company,  or any other person, that the objectives and plans of the Company will
be achieved.

Inflation
The past and expected future impact of inflation on the financial statements is
not significant.

Item 1.     Legal Proceedings

None

Item 2.     Change in Securities and Use of Proceeds
The Company  issued  479,503  shares of Common Stock pursuant to the exercise of
options in the quarter  ended  February  29,  2000.  The options had an exercise
price ranging from $.813 to $3 per share.  The Common Stock was issued  pursuant
to the exemption  contained in Section 4 (2) of the  Securities  Act of 1933, as
amended.  The  Company  issued  87,500  shares of Common  Stock  pursuant to the
exercise of warrants at a price of $4 in the quarter ended February 29,2000.

Item 3.     Defaults upon Senior Securities

None

Item 4.     Submissions of Matters to a Vote of Security Holders

None

Item 5.     Other Information

None
                                       13

<PAGE>

Item 6.     Exhibits and Reports on Form 8-K
(a)         Exhibits
                  Exhibit 27--Financial Data Schedule

            (b)  Reports on Form 8-K - None



                                       14
<PAGE>

SIGNATURES

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

                               CORNERSTONE INTERNET SOLUTIONS COMPANY
                               -----------------
                               (Registrant)



                               /S/ Ken Gruber
Date: April 14, 2000           ------------------------------
                               Ken Gruber
                               Executive Vice President
                               And Chief Financial and Accounting Officer





                                       15