UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   FORM 10-KSB

 [X]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                                   For the fiscal year ended   December 31, 1999
                                                             -------------------

 [  ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the transition period from _______________________ to _____________

                      Commission file number   0-27807
                                              ---------


                                CybeRecord, Inc.
  ---------------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

             Florida                                      91-1985843
-------------------------------           --------------------------------------
(State or other jurisdiction of           (I. R. S. Employer Identification No.)
 incorporation or organization)

800 Bellevue Way NE, 4th Floor, Bellevue, WA                 98004
--------------------------------------------             -------------
 (Address of principal executive offices)                  (Zip Code)

 Issuer's telephone number (425) 990-5593
                            -------------

 Securities registered pursuant to Section 12(b) of the Act.

      Title of each class              Name of each exchange on which registered

             None                                          None
  ---------------------------          -----------------------------------------
  ---------------------------          -----------------------------------------

Securities registered pursuant to Section 12(g) of the Act.

                           Common Stock $.01 par value
 ------------------------------------------------------------------------------
                                (Title of Class)




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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. [X] Yes [ ] No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant'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. [ ]

Issuer's revenues for its most recent fiscal year.   None
                                                   --------

As of March 31,  2000 the  aggregate  market  value of the  9,906,864  shares of
CybeRecord,   Inc.'s   Common  Stock,   par  value  $.01  per  share,   held  by
non-affiliates  was  approximately  $65,013,795.  In  determining  the number of
shares held by non-affiliates, we assumed that all of the individuals identified
in the  beneficial  ownership  table set forth under Item 11 of Part III of this
report are affiliates  for purposes of determining  the number of shares held by
non-affiliates.  As of March 31, 2000, these individuals  beneficially  owned an
aggregate total of 6,840,000 shares. (This number excludes shares the identified
beneficial  owners do not currently own but may acquire  within 60 days from the
filing  date of this  report.) We further  assumed  (and had no basis to believe
otherwise)  that there are no affiliates of CybeRecord,  Inc. for these purposes
other than the individuals  identified in the beneficial  ownership  table.  The
determination  of  affiliate  status for these  purposes  is not  necessarily  a
conclusive determination for other purposes.

As of March 31, 2000, there were 16,746,864 shares of CybeRecord,  Inc.'s Common
Stock, par value $.01 per share, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (Check one): Yes ____; No _X_





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                                Table of Contents

PART I

Item 1.   Description of Business.............................................1

Item 2.   Description of Property.............................................9

Item 3.   Legal Proceedings...................................................9

Item 4.   Submission of Matters to a Vote of Security Holders.................9

PART II

Item 5.   Market for Common Equity and Related Stockholder Matters............9

Item 6.   Plan of Operation..................................................12

Item 7.   Financial Statements...............................................13

Item 8.   Changes In and Disagreements With Accountants on Accounting and
          Financial Disclosure...............................................13

PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance With Section 16(a) of the Exchange Act..................13

Item 10.  Executive Compensation.............................................16

Item 11.  Security Ownership of Certain Beneficial Owners and Management.....17

Item 12.  Certain Relationships and Related Transactions.....................18

Item 13.  Exhibits and Reports on Form 8-K...................................20

SIGNATURES...................................................................21





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                                     PART I

Item 1.  Description of Business.

Form and Year of Organization

CybeRecord,  Inc.  (which we refer to in this report as "we" or the "Company" or
"CybeRecord")  is the  continuation  of a  corporation  that was first formed on
February 17, 1969 under  Florida  law.  Our Company was first named  Flexi-Built
Modular  Housing  Corporation.  In March 1984, we changed our name to Flexicare,
Inc.,  and then in  September  1996 we changed it again to Pillar  Entertainment
Group  Inc.  In  November  1997 we  acquired  all of the  outstanding  stock  of
Chrysalis  Hotels and Resorts Corp. and changed our name to Chrysalis Hotels and
Resorts Corp.  None of our predecessor  corporations  engaged in any significant
business activities.

In  April  1999  we  acquired  a group  assets  from  people  who  were  working
independently  to develop  technology  relating  to  microfilm  scanning  device
design.  The people from whom we acquired the assets were James J. Lucas,  Glenn
and  Paulette  Kimball,  Marek  Niczyporuk,  James L. and Barbara  Baker  Quinn,
Herbert and Patricia Walker, and Alva D. and Kirsten Cravens.  These people were
not part of a company, but they were coordinating their work and for convenience
we will refer to them as the "Kristal Group."

The assets we acquired  from the Kristal  Group in April 1999 all related to the
development,   production,  and  marketing  of  our  key  product:  a  low-cost,
high-speed   automated   microfilm   scanning   device,   which  we  have  named
"ScanServer."  The  assets  we  acquired   included:   (a)  owned  and  licensed
intellectual  property rights for the device's overall design,  and all hardware
design; (b) computer  programming code and all software developed including (but
not limited to) all software needed to allow  ScanServer to operate reliably and
with commercial  quality and efficiency;  (c) programs  software,  including all
related  trademarks  and  intellectual  property,  in machine  readable or human
readable  form (or  both);  (d)  rights  to,  and any  rights  to apply  for and
register, patents and patent applications, copyrights, trademarks, trade secrets
and all other proprietary rights relating the intellectual property we acquired;
(e)  records  and files  relating  to  manufacturing,  quality  control,  sales,
marketing,  customer  support,  and  designs  for the  intellectual  property we
acquired;  (f) derivative  works of intellectual  property;  and (g) all related
documentation.  We also acquired hardware  patents,  rights to hardware patents,
customer  lists,   contracts,   agreements,   licenses  or  license  agreements,
commitments,  warranties,  claims,  and other existing and inchoate  rights.  We
treated the costs of these asset as research and development expenses because we
determined  that the  assets  had not,  at the time we  acquired  them,  reached
technological feasibility.

We  issued  Company  common  stock to pay for the  assets we  acquired  from the
Kristal Group in April 1999. In May 1999 we changed our name to CybeRecord, Inc.
Since April 1999 we have continued to conduct our research and  development  and
marketing  activities under the name  CybeRecord,  Inc. As of the filing date of
this report,  we are in the early stages of starting to manufacture  ScanServers
for commercial distribution.

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Forward-Looking Statements

In  explaining  our  business  in this  report,  some  of  what  we say  will be
"forward-looking  statements." Words such as "expect,"  "anticipate,"  "intend,"
"believe,"  "plan,"  "objective,"  "target,"  "goal,"  and  similar  expressions
indicate that a statement is  forward-looking.  Our  forward-looking  statements
reflect our  management's  beliefs and  assumptions  based on the information we
currently have available.  Because our  forward-looking  statements are based on
what we know and expect at the time we are preparing  this report,  we cannot be
sure that the actual course of our business  activities  will correspond to what
we say in our forward-looking statements. There are many risks and uncertainties
that could cause the assumptions we have used to formulate our business plans to
turn out to be wrong.  If our assumptions  turn out to be wrong,  our business's
actual  performance  could be much worse than we anticipate based on our current
assumptions.  If our business does not perform as well as investors  expect,  or
analysts or investors develop concerns about how well our business will perform,
the trading prices for our stock are likely to decline, perhaps substantially.

As explained in more detail below, our business is to develop,  manufacture, and
market a low- cost,  high-speed  automated microfilm scanner.  The following are
some of the key risks  and  uncertainties  that  could  have a serious  negative
effect  on our  business,  or at  least  delay  our  progress.  While we are not
currently aware of circumstances  that would produce the potential  problems and
delays we describe  below,  we  recognize  that we cannot  foresee  what adverse
events our business might encounter.  If our business does encounter  unexpected
problems because of risks and uncertainties, investors could lose some or all of
their investments in our business.

Potential Risks Relating to Production

As reflected in our financial  statements,  we are currently a development stage
company.  As of the filing date of this  report,  we are in the early  stages of
moving to limited production of ScanServers for commercial distribution. We have
never  generated any revenues from sales.  If, as we begin our transition to the
initial  stages of commercial  production,  we encounter  problems,  we will not
progress  from  development  to  revenue-generation  in the  time  frame we have
planned on as set forth in Part II, Item 6 below. Problems could come from being
unable to identify reliable and affordable sources of quality parts necessary to
build our scanners,  being unable to assemble scanners on schedule even if parts
arrive on time and in sufficient  quantities,  or producing scanners that do not
meet necessary quality-control standards.

Potential Risks Relating to Cash-Flow

We need cash to continue  funding our operations.  If we have problems moving to
commercial  production,  it will delay our  ability  to  generate  revenue  from
operations.  If during a delay,  we cannot  obtain  sufficient  funding  to keep
operating our  business,  our business will most likely fail or have to be sold.
Furthermore,  even if the  beginning  of our  commercial  production  phase goes
smoothly,  there will be a delay  before we can  generate  sufficient  cash from


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operations to meet our on-going expenses. If we cannot obtain adequate credit or
sufficient  cash from selling  additional  stock while we are trying to build up
our  production  and revenue  stream,  it will delay or limit our activities and
hurt  our  business.  Also,  if the  securities  markets  in the  United  States
experience  a  downturn,  it will most  likely be harder for us to raise cash by
selling stock than it would be if securities markets were strong and rising.

Potential Risks Relating to Key Technology

We have  developed  our key  technology  with the goal of  creating a  microfilm
scanner  that  can  automatically   recognize  individual  images,   locate  the
boundaries  between images,  and accurately convert images into digital form. We
have been testing and refining our technology,  but we cannot be certain that we
have  identified  and corrected  all the  potential  problems that could prevent
ScanServer's  hardware or software from functioning properly. If we do encounter
serious  problems  with our  critical  technology,  it will hurt our  ability to
market the ScanServer to new customers and our existing  customer  relationships
are likely to suffer also.

Potential Risks Relating to Key Personnel

Our current  engineering and technical  employees,  as well as our President and
Chief Executive Officer,  have specialized  knowledge and experience relating to
the  ScanServer  and to the microfilm  scanner  industry  generally.  Our future
success  depends  heavily  on our  ability  to  retain  our key  management  and
technical personnel.  Competition for skilled technical and management employees
is intense within and among high-technology  industries. We therefore may not be
able to retain our existing key management and technical personnel.  We also may
not be able to attract additional  qualified employees in the future. If we lose
key management or technical employees or cannot attract qualified new employees,
it could have a serious  negative  effect on our  business's  future  growth and
operating results.

Potential Risks Relating to Patent Protection

We have applied for patents to protect technology relating to the ScanServer. If
the United  States  Patent and  Trademark  Office does not grant the patents for
which we have applied,  that will expose us to competition from other businesses
that try to take advantage of our technology. Even if we receive all the patents
for which we have  applied,  if are not able to protect  our rights  under those
patents,  we could be  seriously  hurt by  competitors  taking  advantage of our
patented technology.

Need for Governmental Approvals and Agency Listings

Our ScanServers include electronic  components for which we must obtain evidence
of  compliance  with  Federal   Communications   Commission   ("FCC")  standards
concerning  radio frequency  emissions  (under Part 15 of the FCC's rules).  Our
electrical  components  should also receive safety  listings from  Underwriters'
Laboratories ("UL"). To the extent we seek to place our ScanServers into service


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in Canada,  the United  Kingdom,  and other  parts of Europe and the rest of the
world, there are similar requirements for testing and approval.  We have not yet
applied  for FCC  approval  or a UL listing in the United  States or for similar
approvals in any other country.

If we are delayed in obtaining necessary approvals or clearances,  it will delay
our ability to  distribute  ScanServers  in the  affected  locations.  If we are
unable to obtain a required approval or clearance, we will either have to forego
marketing our ScanServer in the affected  locations or expend the time and money
to change our ScanServer  until it meets the applicable  requirements.  Delay or
failures in obtaining  governmental or agency approvals or listings could have a
significant negative impact on the development of our business.

Potential Risks Relating to General Economic Conditions

Like many other  businesses,  our business will be sensitive to general economic
conditions  that affect us or our potential  customers or both. For example,  if
interest rates rise and our expenses in running our business increase because of
that,  it will be harder  for us to price our  scanner  competitively  and still
generate a profit. If the businesses,  agencies,  and organizations that we plan
to target as our customers experience financial constraints for any reason, they
may decide that using our scanner to convert their microfilm  records to digital
form is an expense  they prefer to forego or delay.  If we are not able to place
as many scanners with customers as we expect, our revenues will be lower than we
anticipate and this will impede the continuing development of our business.

Principal Product

Our  business  is to  develop,  manufacture,  and market a  low-cost  high-speed
automated microfilm scanner. We believe the key drivers for microfilm conversion
are the desire to have speedier and more convenient  access to records,  and the
desire to share and transmit images  electronically.  Our ScanServer  technology
create images that can be transmitted  across the Internet or placed on a server
and made  accessible  by intra-net.  Users can select the standard  image format
they wish to use for their  converted  microfilm  images,  which are stored on a
computer  hard-drive.  Among the standard  image  formats  available  are "tif,"
"jpg,"  and bit map files.  The stored  images  can be  cataloged,  viewed,  and
transmitted electronically using standard "off-the-shelf" software.

Our  ScanServer  does not produce a computer  file that can be edited as text or
other types of data. The digital record is essentially an electronic  picture of
the original  microfilm image. A converted image, if it consists of text, could,
if a customer  chose,  be loaded  into an optical  character  recognition  (OCR)
device or  program.  This step is not part of what  ScanServer  provides  to its
users, however. It would require customers to use separate applications with the
necessary capabilities. We envision that in the future we may find opportunities
to develop alliances with other types of information management businesses, such
as in the areas of conversion to  word-processible  documents or databases  that
could be edited,  sorted, or searched. We do not presently have any alliances of
this  type in place or under  development.  We have  incorporated  nothing  into


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ScanSaver's  current design to mesh with or enable other  conversion  processes,
except the ability of ScanServer software to improve the clarity and contrast of
imperfect or deteriorated microfilm images.

We plan to rent our microfilm  scanners to customers who can use them to convert
their microfilm records to digital form. We currently do not intend to encourage
customers  to  purchase  ScanServers.  We plan to base  the fees we  charge  our
customers on the number of images they convert from microfilm to digital format.
We call this per-image fee a "click- charge."

Competitive Business Conditions, Position in Industry, and Methods of
Competition

Offering  customers the ability to rent rather than buy or lease our ScanServer,
and to pay based on the number of images  converted,  are two of the key factors
we believe will allow us to offer an  attractive  alternative  to other  options
customers may consider.  We believe our target  customers have  essentially  two
alternatives  to renting our  ScanServer:  outsourcing  their records to a third
party (such as a service  bureau) for  conversion or purchasing or leasing other
producers' microfilm scanners.

In our  view,  outsourcing  has the  drawback  of taking  critical,  potentially
irreplaceable  records  away  from  the  customer's  premises  and  out  of  the
customer's control.  This means that while the records are being converted,  the
customer does not have access to them. In addition,  the charges for  conversion
through  outsourcing  can be  significant  for  customers  that have millions of
records to convert.  The  information we have from potential  customers on their
expected costs for service bureau  conversion range from 5(cent) to 15(cent) per
image  converted or more. We plan to offer a "click  charge"  pricing  structure
with a sliding scale based on the number of images converted. We expect that the
high end of our pricing  scale will meet the lowest prices  service  bureaus can
offer.  We expect that for  customers  whose volume places them in the middle or
lower end of our  sliding  scale,  the  per-image  charge will be lower than the
least expensive service bureau charges. At the same time, our customers will not
need to surrender  control of and access to their records  during the conversion
process.  Our  customers  will be able to use the  ScanServer at their places of
business.

A  chief   drawback  we  perceive  with  respect  to  purchase  or  leasing  our
competitors'  scanners is the need for businesses to include purchase or leasing
costs in their capital  planning  cycles.  Another  drawback is the  potentially
limited  usefulness  of any  purchased  or leased  scanners  after  the  initial
conversion process is completed. A business may be required to purchase or lease
a large number of scanners to complete  initial  conversion in a timely  manner,
but need fewer machines to keep up with on-going microfilm conversion.  With our
proposed rental arrangement based on click-charges, there is no need for capital
budget  treatment and no need to procure more scanners than are required to meet
a business's current needs. We envision that many potential customers may prefer
to rent several  ScanServers  for a limited  period to facilitate  conversion of
microfilm  images over a shorter time period.  In this way, a customer  does not
have to endure an  extended  disruption  to records  access and does not have to
devote as much personnel attention to the conversion  process.  Our click-charge
approach  facilitates use of multiple  scanners in a way we believe  purchase or
lease arrangements do not.

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Our currently  available  information on prices for other  companies'  microfilm
scanners  indicates  that they  range  from  $50,000  to  $160,000  for a single
scanner.  We believe that SunRise  Imaging,  Inc.  and Mekel are  presently  the
leaders in the microfilm scanner market.  Fuji also offers a proprietary scanner
limited to its own 16mm blipped roll film.

Both SunRise  Imaging and Mekel have recently been acquired by other  companies.
We  believe  that the effect of these  acquisitions  is likely to make them less
competitive  than  they were  before.  So far as we know,  none of the  existing
microfilm  scanner  companies  place their products  without a sales contract or
third party lease,  both of which require capital purchase approval and capital.
The  exception  is a Fuji film scanner  that sells for around  $16,000,  but the
scanner is limited  to16mm Fuji blipped  roll-film  and is therefore in our view
not a competitor for the general microfilm scanning market.

The other important  distinctions between our ScanServer and the other microfilm
scanners with which we are familiar are the degree of automation,  simplicity of
use,  multiple  film format  capability,  and quality of converted  images.  Our
ScanServer  incorporates  two key software  components that we believe will give
our product a significant  competitive advantage. We call them "ImageFinder" and
"ImageRestore."

ImageFinder is designed to automatically  detect and distinguish  between images
on  microfilm.  As  explained  in a November  30, 1999 press  release  available
through our Website (www.cyberecord.com), we tested ImageFinder in November 1999
using  microfilm  samples we selected  specifically  to challenge  ImageFinder's
capabilities.  The  sample  included  overlapping  images  and  films  that  had
different size images  intermixed with each other. We were very pleased with the
results of our test. Our ImageFinder software partitioned the images on the test
samples with 100% accuracy, without the need for operator intervention.

ScanServer's ability to accurately locate and distinguish among microfilm images
is  central  to our  marketing  strategy.  Our goal is to offer a  scanner  that
requires  minimal  human  supervision,  so that our  customers  will incur lower
personnel costs and less work disruption than will other scanners. To accomplish
this goal, our scanner has to provide reliable, automatic image recognition. Our
ImageFinder software is designed to meet this need. Furthermore,  the ScanServer
works with a range of microfilm formats, including fiche, jacketed and cut film,
reel and cartridge formats, and aperture cards.

The ScanServer's second key software component is ImageRestore.  ImageRestore is
designed to  automatically  restore  contrast,  clarity,  and content to digital
images produced from microfilm records.  As described in an August 3, 1999 press
release available through our Website,  when we tested ImageRestore on a variety
of microfilm  samples,  we obtained very good results.  The images we tested not
only had improved clarity, but extraneous marks such as scratches and specks had
been removed.


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Another advantage we believe we can offer customers with ScanSaver is simplicity
of use.  We have  designed  ScanServer  to be easy enough to operate to allow an
unskilled clerk to use it correctly with minimal training.  Our ScanServer is no
more difficult to operate than a simple photocopier.  A set of microfilm records
is placed into the ScanServer, the operator chooses the copying options, presses
the  start  button,  and  the  ScanServer  carries  out the  conversion  process
automatically.  We  consider  this  is  a  significant  improvement  over  other
currently available scanners, which we believe are complicated and cumbersome to
operate and require substantial  training.  Our competitors' scanners require an
operator  to  manually  process  each image in  microfilm  format,  particularly
difficult  images.  By  "difficult," we mean images that are  overlapping,  have
unclear  borders,  are  non-standard  shapes or sizes or are skewed within their
frames.  Our  ScanServer  is designed  to  automatically  detect even  difficult
images.  If other  scanners are less  reliable in  accurately  and  consistently
recognizing  individual  microfilm  images,  they have to be much  more  closely
attended  because an operator has to manually check and compensate for any image
recognition errors.

Even though we believe that our  click-charge  approach will enable customers to
more quickly and efficiently convert existing microfilm records to digital form,
we  anticipate  that many  businesses  and  agencies  will  continue to generate
records on microfilm in the future.  This is because microfilm is considered one
of the most  durable  and  economical  methods of storing  large  quantities  of
information.  Microfilm  has been in  successful  use for more than  one-hundred
years,  and does not  depend  on  computer  programming  to make it  accessible.
Microfilm  therefore does not carry the risk that it could become  unretrievable
because of outmoded software the way computer-generated  data can. Therefore, we
believe  businesses  will most  likely  continue  to keep  critical  records  on
microfilm  because of its durability.  At the same time, we expect that for ease
of access, management, and distribution, they will also want to create duplicate
records in digital form.

Potential Customers and Markets

In identifying the scope of our target market and potential  customers,  we have
relied on widely- recognized sources in the  information-management  field (such
as the  Association for  Information  and Image  Management or "AIIM"),  as well
direct contacts with customers and the substantial experience of our management,
research and development,  and sales personnel.  According to information posted
on AIIM's public Website  (www.aiim.org),  AIIM is the successor to the National
Microfilm Association, which was founded in 1945. AIIM claims membership of more
that 650 corporations  and 9,000  individuals.  Based on our  management's  long
experience in the information and imaging industries and the information we have
about  AIIM,  we  believe  AIIM  to  be  a  respected  and  reliable  source  of
information.  AIIM has  commissioned  and published  substantial  studies of the
magnitude,  make-up,  and growth  rate of the market for  document  imaging  and
information management, which are available through AIIM's Website.

The  information   published  by  AIIM  and  other  industry   sources  provides
independent  confirmation of what our own experience and marketing  efforts have
indicated:  that  a  vast  array  of  businesses,  organizations,  and  agencies
worldwide have stored and continue to generate  enormous  quantities of critical
information  in various  microfilm  formats.  These  include banks and financial
services  institutions,  insurance  companies,  libraries,  government  and  law

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enforcement  agencies  (federal,  state,  and local),  educational  and research
institutions,  and private businesses.  The types of information these potential
customers  have in their  microfilm  records  include such documents as mortgage
records,  customer service and loan records,  insurance policies,  personnel and
human resources records,  claims files,  intelligence data, IRS records,  birth,
death,  and  marriage  certificates,  arrest and  fingerprint  records,  medical
records of all kinds, and so forth.  Initially, we expect to focus our marketing
efforts  most  heavily  on  government  agencies  (including  law  enforcement),
banking, insurance, and title companies. To help us establish ourselves in these
areas,  we have focused on recruiting  and hiring sales and marketing  personnel
with experience and contacts in each of these sectors.

Methods of Distribution and Marketing

We currently  expect to distribute our ScanSaver  through direct sales channels.
We also  plan  to work to  develop  relationships  with  resellers,  value-added
resellers,  and system integrators as viable opportunities emerge. Our marketing
strategy is to use  in-person  and telephone  sales calls,  advertising,  direct
mail,  and trade show  appearances.  We plan to target our  advertising in trade
magazines  aimed at the types of businesses and agencies we have  identified for
our initial marketing focus, such as government,  banking,  insurance, and title
companies.

Sources and Availability of Raw Materials

Manufacturing  the  ScanServer  requires three types of basic  materials:  metal
parts for the structural and exterior components, optical elements, and computer
parts.  We  expect to  purchase  optical  components  for our  ScanServers  from
commercially   available   sources.   The  computer  parts  are  available  from
over-the-counter  computer stores.  Most of the metal components  require custom
manufacturing,  for which we have arranged with a third-party contractor.  We do
not expect to be dependent on any single or few sources for raw materials.

Dependence on One or a Few Major Customers

We do not anticipate  that we will be dependent on a single or very small number
of customers.

Patent, Trademark, and Service Mark Applications and Research and Development
Activities

We  currently  have a number of United  States and foreign  patent  applications
pending with respect to our  ScanServer's  technology.  We have also applied for
trademark and service mark  protection for the words  "cyberecord"  and "4eyes."
Since  acquiring the assets of the Kristal Group in April 1999,  essentially all
of our activities have been focused on research and development, but none of the
associated costs have been or will be borne directly by our customers.

                                        8


<PAGE>



Governmental Regulation and Environmental Compliance

We  are  not  aware  of  any  current  or  pending  federal,   state,  or  local
environmental  laws or regulations that are likely to have a significant  impact
on our business  operations.  We do not anticipate any significant  governmental
regulation unique to our business,  other than the matters described above under
the  subheadings  "Need for  Governmental  Approvals  and Agency  Listings"  and
"Patent,  Trademark,  and Service Mark Applications and Research and Development
Activities."

Employees

We currently have 18 employees, all of whom work full time for CybeRecord or one
of its wholly owned subsidiaries.

Item 2.  Description of Property.

The Company  leases  offices at 800 Bellevue  Way,  N.E.,  Suite 400,  Bellevue,
Washington  under a written  lease,  which runs through  December 31, 2000.  The
Company  has the  right to  terminate  the  lease  early  (on June 30,  2000) by
providing 30 days' prior written notice.  Unless terminated,  after December 31,
2000 our lease will  automatically  renew for successive  one-year  terms,  with
annual  seven-percent  increases in the monthly  rental.  The terms of our lease
provide for office space,  communication  services,  and office  furniture.  Our
lease is with  Vantas  Bellevue,  800  Bellevue  Way,  NE, 4th Floor,  Bellevue,
Washington 98004, telephone number (425) 462-4059.

Item 3.  Legal Proceedings.

The Company is not  presently a party to any  material  litigation,  and, to the
Company's  knowledge,  there  is no  material  litigation  currently  threatened
against the Company.

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

There were no  matters  submitted  to a vote of  CybeRecord's  security  holders
during the fourth  quarter of our most  recently  completed  fiscal year,  which
ended on December 31, 1999.

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

Market Information

The  Company's  Common  Stock  ($.01  par  value)  is  publicly  traded  on  the
over-the-counter  market.  Under its Articles of  Incorporation,  the Company is
also  authorized to issue  1,500,000  shares of Class B Common Stock,  par value


                                        9


<PAGE>



$.10 per share.  The Company has not,  however,  issued any Class B Common Stock
and has not  registered  any  Class  B  Common  Stock  under  Section  12 of the
Securities  Exchange Act of 1934. The Company's Common Stock ($.01 par value) is
presently traded in the OTC "Pink Sheets." The Company's principal market makers
are Olsen Payne & Company,  Paragon Capital  Corporation,  Sharpe Capital Corp.,
and Hill,  Thomson  Magid and  Company.  The high-low  bid  information  for the
Company's  stock for the period January 1998 to December 1999 as reported by the
"Wall Street City" website (www.wallstreetcity.com) of Telescan, Inc. follows:

Monthly prices (January 1998 to December 1999)

Date              High         Low          Close

Dec-99            2.125        0.812        2.125
Nov-99            1.375        0.625        1.250
Oct-99            1.750        0.625        1.062
Sep-99            1.000        0.500        0.875
Aug-99            1.250        0.937        1.000
Jul-99            1.562        1.125        1.187
Jun-99            1.875        0.937        1.625
May-99            1.437        0.500        1.093
Apr-99            1.000        0.406        0.875
Mar-99            0.812        0.125        0.562
Feb-99            0.375        0.187        0.375
Jan-99            0.250        0.125        0.250
Dec-98            0.375        0.125        0.218
Nov-98            0.593        0.250        0.312
Oct-98            0.531        0.218        0.218
Sep-98            0.750        0.250        0.500
Aug-98            0.937        0.500        0.625
Jul-98            1.125        0.750        0.937
Jun-98            1.250        0.687        0.900
May-98            1.187        0.437        1.000
Apr-98            0.687        0.500        0.500
Mar-98            0.750        0.375        0.593
Feb-98            0.750        0.500        0.687
Jan-98            0.750        0.375        0.640

Holders

The  approximate  number of record  holders of the Company's  Common Stock as of
December  31,  1999  was  330,   inclusive  of  those   brokerage  firms  and/or
clearinghouses  holding the Company's  common shares for their  clientele  (with
each such brokerage house and/or  clearinghouse being considered as one holder).
The aggregate  number of shares of Common Stock  outstanding  as of December 31,
1999 was 15,471,864 shares.

                                       10


<PAGE>



Dividends

The Company  has not paid or declared  any cash  dividends  on its Common  Stock
since its  inception  and does not  anticipate  paying cash any dividends on its
Common Stock in the foreseeable future.

Recent Sales of Unregistered Securities:

The  Company has issued the  following  shares of its Common  Stock  during past
three years without  registration  under the  Securities Act of 1933, as amended
(the "Act"):

1.       On October 1, 1997,  the Company issued  4,000,000  shares to fifty-one
         non-affiliates at a price of $.06 per share for aggregate consideration
         of $240,000 pursuant to an exemption from registration under Regulation
         D,  Rule 504 of the Act.  In  connection  with  this  October  1,  1997
         transaction,  the Company redeemed and canceled (without  compensation)
         700,000 of the 4,000,000 shares that were issued.

2.       On October 11, 1997, the Company issued  8,000,000  shares to seventeen
         affiliates.   These  shares  were  issued  by  one  of  the   Company's
         predecessor corporations,  Pillar Entertainment Group Inc., in exchange
         for all of the outstanding shares of Chrysalis Hotels and Resorts Corp.
         Following the exchange Pillar Entertainment Group Inc. changed its name
         to  Chrysalis  Hotels  and  Resorts  Corp.  The  shares  issued in this
         exchange transaction were exempt from registration  pursuant to Section
         4(2) of the Act.

3.       On  March  24,  1999,  the  Company  issued  1,970,000  shares  to  ten
         non-affiliates   pursuant  to  an  exemption  from  registration  under
         Regulation  D,  Rule 504 of the Act,  at a price of $.50 per  share for
         total  consideration of $985,000.  In consideration  for legal services
         rendered,  46,000 shares were issued to two non-affiliates  pursuant to
         an exemption from registration under Regulation D, Rule 504 of the Act.

4.       On April  20,  1999,  the  Company  issued  6,000,000  shares  to seven
         affiliates.   These  shares  were  issued  by  one  of  the   Company's
         predecessor  corporations,  Chrysalis  Hotels  and  Resorts  Corp.,  in
         exchange for assets  acquired  from the Kristal  Group.  An  additional
         50,000  shares  were  issued  as a  finder's  fee in  the  transaction.
         Following  the asset  acquisition,  Chrysalis  Hotels and Resorts Corp.
         changed  its  name  to  CybeRecord,  Inc.  The  shares  issued  in this
         transaction were exempt from  registration  pursuant to Section 4(2) of
         the Act.

5.       In  November   1999,   the  Company   issued   70,000   shares  to  two
         non-affiliates  in exchange for legal services.  The shares were exempt
         from registration pursuant to Section 4(2) of the Act.

                                       11


<PAGE>



6.       Between  February 11 and March 3, 2000,  the Company  issued  1,275,000
         shares to 17 non-affiliates  pursuant to an exemption from registration
         under  Regulation D, Rule 506 of the Act, at a price of $1.75 per share
         for aggregate consideration of $2,231,250.

Item 6.  Plan of Operation.

In February  2000 we produced two  prototype  ScanServers  that will be used for
testing  and  evaluation.  Over the next 12  months,  our goal is to move from a
development stage company to commercial production of the ScanServer.  As of the
beginning  of April 2000,  we have ordered  sufficient  hardware  components  to
assemble 30 ScanServers and sufficient computer and electronic components for 10
ScanServers.  (We ordered  hardware for a larger number of  ScanServers  because
these  components  require  custom   manufacturing.)  We  have  arranged  for  a
subcontractor  in southern  California to build  ScanServer units for commercial
shipping  with an initial  target of 10 units to be  completed by the end of May
2000.  After  May,  our  goal is to  achieve  a  continuing  production  rate of
approximately 20 units per month. If the parts arrive as expected,  the assembly
process  proceeds  without  significant  delays,  and we  obtain  necessary  FCC
approval  and UL listings,  we expect to begin  shipping  commercial  production
units by the end of May 2000.  Our  initial  target  geographical  market is the
United States, to be followed by Canada, the United Kingdom,  Columbia,  Brazil,
and Mexico.  Based on cash raised from stock sales between February 11 and March
3, 2000 (as described in Part II, Item 5 below),  we believe we have  sufficient
cash available to meet our current manufacturing and marketing schedule.

If we are able to implement our production  plans as we intend,  we believe that
we will be able to generate adequate revenues from placing ScanServer units into
service to maintain  operations  at the modest level  described in the preceding
paragraph.  Without  raising  additional  funds through  stock sales,  we do not
expect to be able to expand the scale of our  production  and marketing  efforts
quickly,  but we  believe  we  could  sustain  our  business  and  grow  slowly.
Additional  capital  investment in our business  during the next 12 months would
influence our activities in three key respects: how much advertising we are able
to do, how quickly we can expand the scale of our production operations, and how
quickly we can enter additional  geographical  markets. If we are able to secure
additional funding through stock sales, we would expect to pursue these areas to
the extent we considered it feasible. We cannot,  however, be certain of placing
enough  ScanServers  into service over the next 12 months to meet our  operating
requirements.  If we do not  place  enough  units,  then we will  need to either
obtain adequate  commercial credit arrangements or sell additional stock to fund
our continuing  operations.  We do not currently  have  commitments in place for
obtaining credit or selling additional stock.

As of April  2000,  we do not intend to conduct  significant  new  research  and
development  efforts  over the next 12 months.  We plan to focus our  efforts on
manufacturing  ScanServers  and  placing  them into  commercial  service.  As an
integral part of moving from product  development  to  production,  we expect to
conduct  on-going  evaluation of possible ways to improve  production  and lower
costs. We will also be watching for opportunities to further develop or build on
our core technology in ways that complement our microfilm scanning business.  We
do not currently have any concrete plans in this regard, however.

                                       12


<PAGE>



We do not anticipate  acquiring  significant  new plant or equipment  during the
next 12  months.  We  plan to  contract  with  third  parties  to  assemble  our
ScanServers, rather than acquiring infrastructure to build them ourselves.

We do not currently expect to hire a significant number of additional  employees
during  the  next  12  months.  We  believe  that  overall,  the  complement  of
management,  technical,  and sales and marketing  personnel we currently  employ
should enable us to proceed with  production and marketing at our initial target
levels over the next 12 months.

Item 7.  Financial Statements.

The Company's  financial  statements required by this item begin on page F-1 and
are incorporated into Item 7 of this report by this reference.

Item 8.   Changes In and Disagreements With Accountants on Accounting and
          Financial Disclosure.

The  Company  has  had  no  changes  in or  disagreements  with  accountants  on
accounting or financial disclosure.

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance With Section 16(a) of the Exchange Act.

The  directors  and  executive  officers of the Company and their ages as of the
filing date of this report are as follows:

Name                   Age      Position
----                   ---      --------
William S. Altieri     71       Director
Alva D. Cravens        59       Director
James J. Lucas         58       Director, Chief Executive Officer, and President
Brent Nelson           38       Director and Secretary
James L. Quinn         63       Vice President of Sales
Glenn S. Kimball       67       Vice President of Engineering
Marek Niczyporuk       34       Vice President of Software Development

William S. Altieri, Director -- Mr. Altieri was appointed a Director on November
15, 1999. Since 1975, he has been a self-employed marketing and sales consultant
for  clients in a variety of business  areas,  including  franchising,  computer
services,  soft drinks,  automobile products,  and food products.  Mr. Altieri's
experience  encompasses domestic and international  product branding,  corporate



                                       13


<PAGE>



and product  positioning,  and advertising  and general  marketing for consumer,
industrial,  and  high-technology  products.  He has  been  employed  as a Brand
Manager for Procter and Gamble's Joy detergent.  He later joined  Norman,  Craig
and Kummel  Advertising in New York City as a Vice President and was promoted to
Senior Vice President of European  Operations  directing  marketing programs for
Colgate Palmolive,  Chesebrough-Ponds,  and American-Cyanamid.  Subsequently, he
became  a  senior  partner  and  Managing   Director  of  London's  Jack  Tinker
Advertising,  where he was responsible for adapting U.S.  marketing efforts into
European  marketing  programs for  Coca-Cola,  Exxon,  Miles  Laboratories,  and
Nabisco. Mr. Altieri holds an MBA from Stanford  University.  As a Lieutenant in
the United States Navy, he served on an UDT (Underwater  Demolition  Team),  now
called a SEAL (Sea Air Land) team.  Mr.  Altieri's term as Director runs through
the next annual shareholders' meeting. As of the filing date of this report, the
Company's  Board  of  Directors  has  not yet set a date  for  the  next  annual
shareholders' meeting.

Alva D. Cravens, Director -- Mr. Cravens was appointed a Director of the Company
on November 15, 1999. Since January 1999 he has been Vice President of Worldwide
Marketing for AdForce,  an Internet  ad-serving  firm  recently  ranked ninth in
Inter@ctive  Week magazine's top ten advertising and marketing  companies.  From
March 1998 to January  1999,  Mr.  Cravens was  President of OpenGrid  (formerly
Ensemble Solutions,  Inc.), an electronic  distribution company. From April 1996
to January  1998, he served as Vice  President of Marketing at Adaptec,  Inc., a
manufacturer of SCSI, fiber channel, and RAID products.  Between August 1992 and
March 1996, Mr.  Cravens was Vice  President of Marketing for Radius,  Inc. (now
Digital Origin,  Inc.), a developer and  manufacturer  of computer  displays and
graphic and video technologies.  Mr. Cravens has more than 20 years of executive
experience in strategic marketing,  communications,  positioning,  branding, and
advertising for technology companies.  Mr. Cravens holds both a B.A. and an M.A.
in communications from San Jose State University.  Mr. Cravens' term as Director
runs through the next annual shareholders' meeting.

James J. Lucas,  Director,  Chief Executive Officer,  and President -- Mr. Lucas
has more  than 20 years of  senior  management  experience  in  digital  imaging
markets. He joined CybeRecord as President and CEO May 1999, and was appointed a
Director  on  November  15,  1999.  From June 1998 to May  1999,  Mr.  Lucas was
Director of National Sales,  Seybold Seminars,  for ZD Events.  From May 1996 to
October  1998,  Mr. Lucas served as Vice  President of Sales and  Marketing  for
SunRise Imaging, Inc. in Foster City, California,  and from May 1994 to May 1996
he was Vice President of Sales and Marketing for ScanView,  Inc. in Foster City,
California.  Mr.  Lucas'  career  highlights  also  include  positions  as  vice
president of product  marketing  and vice  president of  advertising  and public
relations for General Electric  Company,  Calma Division,  and vice president of
special markets for Eastman Kodak Company,  Atex Division. In 1981, he developed
the  original  business  and  product  concepts  for Qubix  Graphic  Systems,  a
venture-funded  company  that went  public and was  subsequently  acquired.  Mr.
Lucas' term as Director runs through the next annual shareholders' meeting.

Brent Nelson, Director and  Secretary -- Mr. Nelson has served as a Director and
as  Secretary of the Company  since  October  1997.  For more than the past five
years, Mr. Nelson has been president of Northwest  Capital  Partners,  L.L.C., a



                                       14


<PAGE>



venture capital firm located in Bellevue, Washington. Within the past five years
Mr. Nelson has also been Chief Executive Officer of PanPacific Containers L.L.C.
and Director of Business  Development for Waterwood  Mountain Hotel Resort & Spa
Ltd. and Waterwood International Spa Resorts, Inc. (both Canadian companies). In
addition to CybeRecord,  Mr. Nelson  presently serves on the boards of directors
of the following  reporting  companies:  Interactive  Objects,  Inc., a software
development  firm,  Eclipse  Entertainment  Group,  Inc.,  a  film  development,
production,  and distribution  company, and Mobile PET Systems,  Inc., a medical
company. He earned a diploma in marketing from Douglas College, Vancouver, B.C.,
Canada in 1983. Mr. Nelson has over 15 years of experience in corporate  project
financing.   Mr.  Nelson's  term  as  Director  runs  through  the  next  annual
shareholders' meeting.

James  Quinn,  Vice  President of Sales --  From  December  1994 until he joined
CybeRecord  in August 1999,  Mr. Quinn was Director of  International  Sales for
Tally Printer Corporation,  Kent, Washington.  Mr. Quinn graduated from Franklin
Marshall University in 1958.

Glenn Kimball,  Vice President of Engineering -- For more than five years before
joining  CybeRecord in May 1999, Mr. Kimball operated an independent  consultant
business, Kimball Engineering.  Mr. Kimball has more than 20 years of experience
in imaging product development, primarily for large government organizations. He
developed  image-processing  techniques  to separate and enhance  poor  quality,
overlapping  bank  endorsements  and  a  series  of  test  documents,   enabling
performance  of high-speed  check reader-  sorters for the Federal  Reserve.  He
managed development and production of seven multimillion-dollar  topographic map
compilation  systems  that  performed at micron  accuracy for the United  States
Defense Mapping Agency.

Marek Niczyporuk,  Vice President of Software  Development -- Mr. Niczyporuk was
appointed Vice President of Software  Development on April 7, 2000.  From May 1,
1999 until April 7, 2000, he served as CybeRecord's Director of Imaging Systems.
For more than five years before joining CybeRecord,  Mr. Niczyporuk  conducted a
private  software  consulting  business.  He is a  leading  machine  vision  and
computer image  processing  scientist with expertise in  incorporating  advanced
image processing  methods into successful  medical,  commercial,  and industrial
applications.  His  cardiovascular  imaging  systems to detect  and  reconstruct
real-time,  three-dimensional  shapes  of the heart  surface  have been in daily
operation  since 1989.  Mr.  Niczyporuk  has also  developed a system to analyze
Doppler ultrasound  images,  software to interpret retinal  topography,  machine
vision systems for inspection and quality control in the printing industry,  and
color image analysis programs for a variety of manufacturing environments.

             Section 16(a) Beneficial Ownership Reporting Compliance

The Company filed an initial  registration  under  Section 12 of the  Securities
Exchange  Act of 1934 on Form 10-SB on October 26,  1999.  The Company  believes
that as a  result  of that  filing,  the  following  persons  became  "reporting
persons" for purposes of Section 16(a) of the Securities Exchange Act of 1934 on


                                       15


<PAGE>



the 60th day after that filing:  James J. Lucas,  Glenn  Kimball,  Brent Nelson,
James L. Quinn,  Alva D. Cravens,  and William S. Altieri.  The Company believes
that none of these  reporting  persons  filed  Initial  Statements of Beneficial
Ownership of Securities on Form 3 with the Securities and Exchange Commission or
with the Company when they became reporting persons or at any time since then up
to the date of this report.  The Company also believes that one of the reporting
persons identified above,  William S. Altieri,  would have reported that he does
not beneficially own any of the Company's  securities if he had filed an Initial
Statements of Beneficial  Ownership of Securities on Form 3 with the  Securities
and Exchange Commission.  The Company does not believe that any of the reporting
persons  identified  above filed an Annual  Statement  of Changes in  Beneficial
Ownership  on Form 5 with the  Securities  and Exchange  Commission  or with the
Company  within the 45-day  period  following  the  December 31, 1999 end of the
Company's most recently completed fiscal year.

The  Company  does not  know of any  purchases  or  sales or other  transactions
carried out by any of the  reporting  persons  identified  above that would have
been  required to be reported on Form 4 or Form 5. So far as the Company  knows,
only Initial  Statements  of  Beneficial  Ownership of Securities on Form 3 were
required  to be (and  were  not)  filed  during  1999 by the  reporting  persons
identified above.

Item 10.  Executive Compensation.

The table  below sets forth all  compensation  paid to the  Company's  executive
officers during 1999 (the Company's most recently  completed fiscal year). Other
than as indicated in the table below, none of the Company's  executive  officers
received  any  benefits or  compensation  in any form  (including  stock,  stock
options, stock appreciation rights,  long-term incentive plan payouts, etc.) for
service as executive officers of the Company during 1999.

                          Compensation Paid During 1999
<TABLE>
<CAPTION>

Position                                              Salary                  Bonus       Other Compensation
--------                                              ------                  -----       ------------------
<S>                                                  <C>                     <C>                 <C>
James Lucas, Pres. & CEO*                            $ 105,000               $12,500
Glenn Kimball, VP Engineering*                       $  72,000               $12,500
James Quinn, VP Sales*                               $  55,000
Tom Morikawa, Exec. VP of Operations**               $  71,875                                   $25,000
     and Chief Financial Officer
Brent Nelson, Secretary***                                                                       $ 5,000
</TABLE>

    * Salary payments to Mr. Lucas began on May 16, 1999. Salary payments to Mr.
Kimball  began on May 1, 1999.  Salary  payments to Mr. Quinn began on August 1,
1999.  The amounts  stated in the table above  reflect  actual  payments made to
these officers from the beginning of their salary payments  through December 31,
1999. Had the Company's executive officers been on the Company's payroll for the
entire 1999 fiscal year at the same salary rate they received from the beginning
of their salary payments through  December 1999, their annual base  compensation
would have been as follows:  $168,000 for Mr. Lucas;  $108,000 for Mr.  Kimball,
and $132,000 for Mr. Quinn.

                                       16


<PAGE>



** Mr.  Morikawa  was a Director  and the Chief  Executive  Officer of Chrysalis
Hotels and Resorts  Corp.  (which was the name under which the Company  operated
until  April  1999)  through  April  1999,  and then  Director,  Executive  Vice
President  of  Operations,  and Chief  Financial  Officer for  CybeRecord  until
November 15, 1999.  Since November 15, 1999, Mr.  Morikawa has been a consultant
to the Company and during 1999 received  retainer  payments under his consulting
agreement  of $25,000.  These  consulting  payments  are  included  under "Other
Compensation" in the table above.

*** Mr.  Nelson was a Director and  Secretary  of  Chrysalis  Hotels and Resorts
Corp.  (the last name under which the Company  operated before changing its name
to CybeRecord, Inc. in April 1999). He is one of the Company's current Directors
and  shareholders,  as well as its Secretary.  Mr. Nelson received  compensation
through payments the Company made to Northwest  Capital Partners,  L.L.C.  under
the  Consulting  Agreement  described  below  under  Item 12.  These  consulting
payments are included under "Other Compensation" in the table above.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The following  table sets forth,  as of March 31, 2000,  the stock  ownership of
each executive officer and director of CybeRecord, of all executive officers and
directors of CybeRecord as a group, and of each person known by CybeRecord to be
a  beneficial  owner of five  percent  or more of its  common  stock.  Except as
otherwise  noted,  each person listed below is the sole beneficial  owner of the
shares listed  opposite his or her name and has sole investment and voting power
for those  shares.  No person listed below has any options,  warrants,  or other
rights to acquire  additional  securities  of the  Company  except as  otherwise
indicated.

   Name and Address             Number of Shares
of Beneficial Owner (1)        Beneficially Owned           Percentage of Class
--------------------------------------------------------------------------------
James J. Lucas
401 -- 100th NE, #316               1,500,000                       8.96
Bellevue, WA  98004-5456

Glenn Kimball*
2850 College Avenue                 1,500,000                       8.96
Modesto, CA  95350

Marek A. Niczyporuk
962 Elsinore Drive                  1,300,000                       7.77
Palo Alto, CA  94303

Brent Nelson
5395 176th Place                    1,225,000**                     6.90
Bellevue, WA  98004



                                       17


<PAGE>
   Name and Address             Number of Shares
of Beneficial Owner (1)        Beneficially Owned           Percentage of Class
--------------------------------------------------------------------------------
Thomas Morikawa
1737  14th Avenue                    1,115,000                       6.66
Seattle, WA  98122

James L. Quinn***
3419 Evergreen Point Road            1,100,000                       6.57
Medina, WA  98039

Alva D. Cravens
17235 Deerpark Road                    100,000                       0.60
Los Gatos, CA  95032

William S. Altieri
675 Sharon Park Drive                     none                        n/a
Menlo Park, CA  94025

All directors and executive
officers as a group (7 persons)      6,725,000                      37.89


   *     Shares held jointly with Mr. Kimball's wife, Paulette Kimball
  **     Includes  1,000,000  shares that may be acquired by  Northwest  Capital
         Partners,  L.L.C. for $.01 per share under a consulting  agreement with
         CybeRecord  if  conditions  specified in the  consulting  agreement are
         satisfied.  Mr.  Nelson is the  president  and sole owner of  Northwest
         Capital Partners, L.L.C.
 ***     Shares held jointly with Mr. Quinn's wife, Barbara Quinn

(1)      For purposes of this table,  a person is  considered  to  "beneficially
         own" any shares with respect to which he or she directly or  indirectly
         has or shares voting or investment  power or of which he or she has the
         right to  acquire  the  beneficial  ownership  within  60 days.  Unless
         otherwise indicated above and subject to applicable  community property
         law,  voting and  investment  power are exercised  solely by the person
         named above or shared with members of his or her household.

Item 12.  Certain Relationships and Related Transactions.

1.       As  described  above  under Part I, Item 1, in April  1999 the  Company
         issued stock to acquire a group assets from the Kristal Group.  Several
         members of the Kristal Group are now officers or directors,  as well as
         shareholders,  of the Company.  These  include  James J. Lucas,  who is
         President and CEO of CybeRecord as well as a director;  James L. Quinn,
         who is Vice President of Sales for  CybeRecord;  Glenn S. Kimball,  our
         Vice President of Engineering;  Marek Niczyporuk, our Vice President of
         Software Development;  and Alva D. Cravens, who is one of the Company's
         current directors.

                                       18


<PAGE>



         The Company issued  6,000,000  shares of common stock to acquire assets
         from the Kristal Group.  The common stock was valued at $.50 per share,
         based on stock  sales in the same  time  period.  The  number of shares
         issued  was  based  on   negotiations   between  the  Company  and  the
         individuals   who  made  up  the  Kristal  Group.   As  part  of  these
         negotiations,  certain  shareholders  contributed  5,000,000  shares of
         common  stock back to the  Company so that,  when the  transaction  was
         completed, the parties' ownership percentages in CybeRecord would be as
         agreed upon within the Kristal Group.

2.       In March 1999, the President of CybeRecord,  Inc., a Nevada corporation
         ("CybeRecord Nevada") executed a Consulting Agreement (the "Agreement")
         with  Brent  Nelson on behalf of  Northwest  Capital  Partners,  L.L.C.
         ("Northwest").  Brent  Nelson is the sole  member of  Northwest.  Brent
         Nelson is also a director and officer of CybeRecord  Nevada.  The Board
         of Directors of CybeRecord Nevada has not yet approved the Agreement.

         The Agreement, which runs through February 2002, provides for Northwest
         to assist in obtaining  financing for CybeRecord  Nevada. In return for
         consulting  services under the Agreement,  CybeRecord  Nevada agreed to
         pay the consultant  $500 per month.  Provision is made for this payment
         to increase to $1,000 per month.  The Agreement  also provides that the
         consultant is to be issued 500,000 shares of common stock for $0.01 per
         share when the  market  capitalization  of  CybeRecord  Nevada  reaches
         $100,000,000 and is to be issued an additional 500,000 shares of common
         stock at $0.01 per share when the market  capitalization  of CybeRecord
         Nevada reaches $200,000,000. Any shares issued under the Agreement will
         be restricted  shares,  and will have "piggy-back"  rights, so that the
         shares will be registered upon CybeRecord  Nevada's first  registration
         after the shares are issued.

         Two CybeRecord,  Inc. exist in the United States:  CybeRecord,  Inc., a
         Florida  corporation  ("CybeRecord  Florida") and CybeRecord Nevada. We
         are CybeRecord Florida.  Brent Nelson is a director and officer of both
         corporations. Brent Nelson is also a shareholder of CybeRecord Florida.
         Both companies share the same President. Neither company owns the stock
         of the  other.  However,  both  companies  have  taken  steps  to merge
         CybeRecord  Florida into CybeRecord Nevada, but the merger has not been
         completed.

         While  Northwest's  contract is with CybeRecord  Nevada,  Northwest has
         performed services for CybeRecord Florida.  CybeRecord Florida has paid
         Northwest $500 per month ($5,000 in 1999).  CybeRecord  Florida's Board
         of Directors  has not approved a contract  with  Northwest.  CybeRecord
         Florida and Northwest are working to identify the terms upon  Northwest
         will provide services to CybeRecord Florida.

         Since  December  31,  1999,  CybeRecord  Florida  has  reached a market
         capitalization  that exceeds  $200,000,000.  If CybeRecord  Florida and
         Northwest  enter into a  consulting  agreement  with  stock  provisions
         similar to the provisions  contained in CybeRecord  Nevada's Agreement,
         or CybeRecord Florida assumes CybeRecord Nevada's obligations under the
         Agreement,  then  Northwest  will have the right to purchase  the stock
         from CybeRecord Florida.

                                       19


<PAGE>



3.       Tom Morikawa,  one of the shareholders named in the table of beneficial
         security  owners under Part III,  Item 11 and also former  director and
         chief  executive  officer of the Company,  is currently a consultant to
         the Company.  Under our consulting agreement with Mr. Morikawa,  we pay
         Mr. Morikawa a monthly  retainer of $12,500.  The consulting  agreement
         with Mr. Morikawa remains in effect through May 15, 2000.

4.       After January 1, 2000, the Company borrowed $100,000 from Brent Nelson,
         who is one of the Company's directors and shareholders,  as well as its
         secretary.  The Company has repaid this loan,  which was due on demand,
         unsecured, and bore no interest.

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

(a)      Exhibits.

3.1      Articles of Incorporation with Amendments
3.2      By-Laws
10.2     Consulting Agreement with Northwest Capital Partners, L.L.C.
10.3     Asset Purchase Agreement Relating to Purchase of Kristal Group Assets
27       Financial Data Schedule

(b)      Reports on Form 8-K.

The Company did not file any reports on Form 8-K during the last  quarter of the
period covered by this report.

                                       20


<PAGE>


                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                     CybeRecord, Inc.
                -------------------------------------------------
                                      (Registrant)

                    By           /s/  JAMES J. LUCAS
                       -----------------------------------------
                             James J. Lucas, President & CEO

                Date                 April 8, 2000
                     ----------------------------------------


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.

                    By           /s/  JAMES J. LUCAS
                       -----------------------------------------
                            James J. Lucas, President & CEO
                      (Director, Principal Executive Officer, and
                             Principal Financial Officer)

                Date                 April 8, 2000
                     ----------------------------------------


                     By          /s/  WILLIAM S. ALTIERI
                        ---------------------------------------
                               William S. Altieri, Director

                Date                 April 7, 2000
                     ----------------------------------------


                      By          /s/  ALVA D. CRAVENS
                         ---------------------------------------
                               Alva D. Cravens, Director

                Date                  April 9, 2000
                     ----------------------------------------


                                       21


<PAGE>







                                CYBERECORD, INC.

                                FINANCIAL REPORT

                                DECEMBER 31, 1999







<PAGE>














                                 C O N T E N T S

                                                                         Page

INDEPENDENT AUDITORS' REPORT                                              F-1

FINANCIAL STATEMENTS

    Balance sheets                                                        F-2
    Statements of operations                                              F-3
    Statements of stockholders' equity                                    F-4
    Statements of cash flows                                              F-5
    Notes to financial statements                                  F-6 - F-12



<PAGE>







                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
CybeRecord, Inc.
Bellevue, Washington

We  have  audited  the  accompanying  balance  sheets  of  CybeRecord,  Inc.  (a
development  stage  company) as of December  31, 1999 and 1998,  and the related
statements of  operations,  stockholders'  equity,  and cash flows for the years
ended  December 31, 1999 and 1998, and for the period from September 27, 1996 to
December 31, 1999.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about 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,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of CybeRecord, Inc. (a development
stage  company)  as of  December  31,  1999 and  1998,  and the  results  of its
operations  and its cash flows for the years ended  December  31, 1999 and 1998,
and for the period from  September  27, 1996 to December 31, 1999, in conformity
with generally accepted accounting principles.

March 15, 2000





                                       F-1
<PAGE>
                              CYBERECORD, INC.
                       (A Development Stage Company)

                               BALANCE SHEETS
                         December 31, 1999 and 1998


<TABLE>
<CAPTION>

              ASSETS                                                               1999                1998
                                                                             -----------------   -----------------
<S>                                                                          <C>                 <C>
Current Assets
     Cash                                                                    $         111,154   $           1,307
     Prepaid expenses and deposits                                                      15,194
                                                                             -----------------   -----------------
              Total current assets                                                     126,348               1,307

Furniture and Equipment, at cost,
     less accumulated depreciation of $3,940                                            25,328
                                                                             -----------------   -----------------
                                                                             $         151,676   $           1,307
                                                                             =================   =================

              LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
     Accounts payable                                                        $          21,436   $               -

Stockholders' Equity
     Common stock, par value $.01                                                      154,719             123,359
     Additional paid-in capital                                                      4,342,269             309,079
     Deficit accumulated during the
        development stage                                                           (4,366,748)           (431,131)
                                                                             -----------------   -----------------
                                                                                       130,240               1,307
                                                                             -----------------   -----------------
                                                                             $         151,676   $           1,307
                                                                             =================   =================
</TABLE>









                     See Notes to Financial Statements


                                       F-2
<PAGE>
                                CYBERECORD, INC.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
         For the Years Ended December 31, 1999 and 1998, and the Period
                  From September 27, 1996 to December 31, 1999

<TABLE>
<CAPTION>
                                                                                                      Total
                                                                                                    Accumulated
                                                                                                      During
                                                                                                    Development
                                                                                                       Stage
                                                                                                  (September 27,
                                                                                                      1996 to
                                                                                                   December 31,
                                                                1999                1998               1999)
                                                         -----------------   -----------------   -----------------
<S>                                                      <C>                 <C>                 <C>
Revenues                                                 $               -   $               -   $               -

Expenses

     Write-off of acquired research
        and development                                          3,000,000                               3,000,000
     Research and development                                      175,425                                 175,425
     General and administrative                                    760,192              82,251           1,191,323
                                                         -----------------   -----------------   -----------------
                                                                 3,935,617              82,251           4,366,748
                                                         -----------------   -----------------   -----------------
              Net loss                                   $      (3,935,617)  $         (82,251)  $      (4,366,748)
                                                         =================   =================   =================

Basic loss per share of common stock                     $           (0.27)  $           (0.01)  $           (0.36)
                                                         =================   =================   =================
</TABLE>










                        See Notes to Financial Statements

                                       F-3
<PAGE>
                                CYBERECORD, INC.
                          (A Development Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY
         For the Years Ended December 31, 1999 and 1998, and the Period
                  From September 27, 1996 to December 31, 1999

<TABLE>
<CAPTION>

                                                                                                          Deficit
                                                                                                        Accumulated
                                                                                          Additional    During the
                                                                 Common        Common       Paid-in    Development
                                                                 Shares         Stock       Capital        Stage         Total
                                                              ------------   ----------   ----------   ------------  ------------
<S>                                                             <C>          <C>          <C>          <C>           <C>
Balances, September 27, 1996                                       335,864   $    3,359   $      769   $         -   $      4,128

Issuance of common stock (October and November 1996)             8,700,000        8,700       49,410                       58,110

Net loss                                                                                                    (3,192)        (3,192)
                                                              ------------   ----------   ----------   -----------   ------------
Balances, December 31, 1996                                      9,035,864       12,059       50,179        (3,192)        59,046

Issuance of common stock, net of effects of exchange
     of Chrysalis shares for Pillar shares (October 1997)        3,300,000      111,300      128,700                      240,000

Additional capital contributed by shareholders                                                46,700                       46,700

Net loss                                                                                                  (345,688)      (345,688)
                                                              ------------   ----------   ----------   -----------   ------------
Balances, December 31, 1997                                     12,335,864      123,359      225,579      (348,880)            58

Additional capital contributed by shareholders                                                83,500                       83,500

Net loss                                                                                                   (82,251)       (82,251)
                                                              ------------   ----------   ----------   -----------   ------------
Balances, December 31, 1998                                     12,335,864      123,359      309,079      (431,131)         1,307

Issuance of common stock in exchange for cash (March 1999)       1,970,000       19,700      965,300                      985,000

Issuance of common stock in exchange for services
     (March and April 1999)                                         96,000          960       39,040                       40,000

Contribution of shares back to the corporation
     by shareholders (April 1999)                               (5,000,000)     (50,000)      50,000

Issuance of common stock in exchange for
     Kristal Group assets (April 1999)                           6,000,000       60,000    2,940,000                    3,000,000

Issuance of common stock in exchange for services
     (November 1999)                                                70,000          700       30,800                       31,500

Additional capital contributed by shareholders                                                 8,050                        8,050

Net loss                                                                                                (3,935,617)    (3,935,617)
                                                              ------------   ----------   ----------   -----------   ------------
Balances, December 31, 1999                                     15,471,864   $  154,719   $4,342,269   $(4,366,748)  $    130,240
                                                              ============   ==========   ==========   ===========   ============
</TABLE>





                        See Notes to Financial Statements

                                       F-4
<PAGE>
                                CYBERECORD, INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS
         For the Years Ended December 31, 1999 and 1998, and the Period
                  From September 27, 1996 to December 31, 1999
<TABLE>
<CAPTION>

                                                                                                       Total
                                                                                                    Accumulated
                                                                                                      During
                                                                                                    Development
                                                                                                       Stage
                                                                                                  (September 27,
                                                                                                      1996 to
                                                                                                   December 31,
                                                                1999                1998               1999)
                                                         -----------------   -----------------   -----------------
<S>                                                      <C>                 <C>                 <C>
Cash Flows From Operating Activities
     Net loss                                            $      (3,935,617)  $         (82,251)  $      (4,366,748)
     Adjustments to reconcile net loss to net
        cash used in operating activities
        Depreciation                                                 3,940                                   3,940
        Write-off of purchased in-process
           research and development that had
           not reached technological feasibility                 3,000,000                               3,000,000
        Professional fees exchanged for
           common stock                                             71,500                                  71,500
        Changes in operating assets and liabilities
           Prepaid expenses and deposits                           (15,194)                                (15,194)
           Accounts payable                                         21,436                                  21,436
                                                         -----------------   -----------------   -----------------
              Cash used in operating activities                   (853,935)            (82,251)         (1,285,066)

Cash Flows From Investing Activity

     Purchase of equipment                                         (29,268)                                (29,268)

Cash Flows From Financing Activities

     Issuance of common stock                                      985,000                               1,283,110
     Capital contribution                                            8,050              83,500             138,250
                                                         -----------------   -----------------   -----------------
              Cash provided by financing activities                993,050              83,500           1,421,360
                                                         -----------------   -----------------   -----------------
              Net increase in cash                                 109,847               1,249             107,026

Cash, beginning of period                                            1,307                  58               4,128
                                                         -----------------   -----------------   -----------------
Cash, end of period                                      $         111,154   $           1,307   $         111,154
                                                         =================   =================   =================
</TABLE>






                        See Notes to Financial Statements


                                       F-5
<PAGE>

                          NOTES TO FINANCIAL STATEMENTS

Note 1.  Organization and Significant Accounting Policies

Organization/Development Stage Company

CybeRecord,  Inc.  ("CybeRecord")  was previously  known as Chrysalis Hotels and
Resorts,  Corp.   ("Chrysalis").   Chrysalis  was  previously  known  as  Pillar
Entertainment, Inc. ("Pillar").

Pillar was a corporation with very little financial  activity for many years. In
October 1997, Pillar exchanged its common stock for all the outstanding stock of
Chrysalis. As Pillar and Chrysalis were related corporations (Pillar's president
was a major  stockholder in Chrysalis),  the  transaction was accounted for at a
historical  cost  basis.  Pillar  then  changed  its  name to  Chrysalis.  These
financial  statements  are  prepared  as if the  companies  were  combined as of
September 27, 1996 (the date Chrysalis was incorporated).

In April 1999,  Chrysalis issued common stock to acquire in-process research and
development  from  ten  individuals:  Glenn  Kimball,  Paulette  Kimball,  Marek
Niczyporuk,  James J. Lucas,  James L. Quinn,  Barbara  Baker Quinn,  Herbert J.
Walker,  Patricia A. Walker, Alva D. Cravens,  and Kristin Cravens  (hereinafter
referred to as the "Kristal Group" for the sake of convenience).  Chrysalis then
changed its name to CybeRecord.

In conjunction with the acquisition of the Kristal Group's assets, CybeRecord is
working toward the  development of product that will enhance paper and microfilm
records when converted to digital documents. This will allow these records to be
shared  electronically over the Internet and within company Intranet systems. As
of December 31, 1999,  products  developed  by  CybeRecord  have not reached the
stage of  technological  feasibility  as  defined  by  Statements  of  Financial
Accounting  Standards ("SFAS") 86. Accordingly,  the cost of the assets acquired
from the Kristal Group and all costs  associated with product  development  have
been charged to expense as research and development.

CybeRecord intends to market the product it is developing.  Revenue  recognition
policies  for product  sales will be  established  when  products  are ready for
distribution.

These  financial   statements  have  been  prepared  treating  CybeRecord  as  a
development  stage company.  CybeRecord  has not generated any revenues  through
December 31, 1999. For the purpose of these financial statements,  it is assumed
the development stage started September 27, 1996, which is the date of inception
for Chrysalis.

                                       F-6


<PAGE>



Note 1.  (Continued)

Cash

Cash  includes  cash  balances  held  at a  bank  and  all  highly  liquid  debt
instruments with original  maturities of three months or less. Cash balances are
in excess of amounts insured by the Federal Deposit Insurance Corporation.

No cash  payments  for interest or income taxes were made during the years ended
December 31, 1999 and 1998.

Furniture and Equipment

Furniture and equipment are depreciated using the straight-line  method over the
estimated useful lives of the related assets.

Research and Development

Research and  development  costs are expensed as incurred.  When products  being
developed reach technological feasibility,  costs associated with these products
will be capitalized and amortized over their estimated useful lives.

Taxes on Income

CybeRecord  accounts for income taxes under an asset and liability approach that
requires the  recognition  of deferred tax assets and  liabilities  for expected
future tax  consequences  of events that have been  recognized  in  CybeRecord's
financial  statements  or tax returns.  In estimating  future tax  consequences,
CybeRecord  generally considers all expected future events other than enactments
of changes in the tax laws or rates.

Earnings Per Share

Basic  earnings  per share is computed by dividing  income  available  to common
shareholders by the weighted average number of common shares  outstanding in the
period.  Diluted  earnings  per share  takes into  consideration  common  shares
outstanding  (computed under basic earnings per share) and potentially  dilutive
common shares.  There are no potentially  dilutive common shares at December 31,
1999 and  1998.  The  weighted  average  number  of shares  was  14,559,531  and
12,335,864 for the years ended December 31, 1999 and 1998. The weighted  average
number of shares  was  12,004,685  for the period  from  September  27,  1996 to
December 31, 1999.

                                       F-7
<PAGE>

Note 1.  (Continued)

Stock-Based Compensation

Although there has been no  stock-based  compensation,  CybeRecord  accounts for
stock-based  compensation  using  Accounting  Principles  Board  Opinion No. 25,
"Accounting for Stock Issued to Employees."  Accordingly,  compensation cost for
stock  options  granted to employees  is measured as the excess,  if any, of the
quoted  market  price of  CybeRecord's  stock at the date of the grant  over the
amount an employee is required to pay for the stock.

Comprehensive Income

There are no reconciling  items between the net loss presented in the Statements
of  Operations  and  comprehensive  loss as defined by SFAS No. 130,  "Reporting
Comprehensive Income."

Segment Reporting

Management  considers  CybeRecord  to  operate  on only  one  business  segment.
Accordingly,  any  disclosures  required  by SFAS No.  131,  "Disclosures  About
Segments of an Enterprise and Related  Information," are already incorporated in
other financial statement disclosures.

New Accounting Standards

New accounting  standards  issued through the date of the independent  auditors'
report do not have an effect on these financial statements.

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  amounts of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenue  and  expenses  during the  reporting  period.
Accordingly, actual results could differ from the estimates that were used.

                                       F-8


<PAGE>


Note 2.  Capital Stock

                                        December 31, 1999     December 31, 1998
                                        -----------------     -----------------
Shares authorized                              20,000,000            20,000,000
                                        =================     =================

Shares issued and outstanding                  15,471,864            12,335,864
                                        =================     =================


Note 3.  Non-Cash Transactions

In 1999,  CybeRecord issued 6,000,000 shares of common stock in conjunction with
the acquisition of the Kristal Group's assets (See Note 1). The common stock was
valued at $.50 per share.  This value was based on stock  sales in the same time
period. The number of shares issued was based on negotiations between CybeRecord
and the  various  owners  of the  Kristal  Group's  assets.  As  part  of  these
negotiations,  certain shareholders contributed 5,000,000 shares of common stock
back to CybeRecord.  These shareholders contributed the stock back to CybeRecord
so that ownership  percentages in CybeRecord subsequent to this transaction were
in accordance with percentages that were agreed upon with the Kristal Group.

In 1999,  CybeRecord issued 46,000 shares in exchange for legal services.  These
shares were valued at $.50 per share, as they were issued at  approximately  the
same time that  shares  were issued for the  Kristal  Group's  assets.  In 1999,
CybeRecord  issued  50,000  shares in exchange for  consulting  services.  These
shares were valued at $12,000,  as they were issued to settle a $12,000 invoice.
In  November  1999,  CybeRecord  issued  70,000  shares  in  exchange  for legal
services.  These  shares were valued at the closing  market price on November 2,
1999, as discounted because the shares were restricted.

Note 4.  Income Taxes

The  reconciliation  of income tax on income  computed at the federal  statutory
rates to income tax expense is as follows:

                                    December 31, 1999       December 31, 1998
                                    -----------------       ------------------
Tax at statutory rate                $     (1,338,109)       $       (27,966)

Change in valuation allowance
   for deferred tax asset                   1,338,109                  27,966
                                    -----------------        ----------------
 Income tax expense                  $              -        $              -
                                    =================        ================

                                       F-9
<PAGE>

Note 4.  (Continued)

CybeRecord's deferred tax asset is as follows:
<TABLE>
<CAPTION>

                                                                     December 31,          December 31,
                                                                         1999                 1998
                                                                   ----------------    -------------------
<S>                                                                <C>                   <C>
Net operating loss carryforwards
   (before valuation allowance)                                    $      425,626        $       144,713

Acquired research and development
   costs expensed for financial
   statement purposes, but capitalized
   for income tax purposes                                              1,200,000

Other                                                                      39,068                  1,872

Less valuation allowance for deferred tax asset                        (1,484,694)              (146,585)
                                                                   --------------        ---------------
Net deferred tax asset                                             $            -        $             -
                                                                   ==============        ===============
</TABLE>

CybeRecord  has net operating loss  carryforwards  of $1,206,000 at December 31,
1999. Most of these losses expire in 2019.

Note 5.  Consulting Contracts

In  March  1999,  the  President  of  CybeRecord,  Inc.,  a  Nevada  corporation
("CybeRecord  Nevada")  executed a Consulting  Agreement (the  "Agreement") with
Brent Nelson on behalf of Northwest Capital Partners,  LLC ("Northwest").  Brent
Nelson is the sole  member of  Northwest.  Brent  Nelson is also a director  and
officer of CybeRecord  Nevada.  The Board of Directors of CybeRecord  Nevada has
not yet approved the Agreement.

The  Agreement,  which runs through  February  2002,  provides for  Northwest to
assist in obtaining  financing for CybeRecord  Nevada.  In return for consulting
services  under the  Agreement,  CybeRecord  Nevada agreed to pay the consultant
$500 per month.  Provision  is made for this  payment to  increase to $1,000 per
month.  The Agreement  also provides that the consultant is to be issued 500,000
shares of common  stock for $0.01 per share  when the market  capitalization  of
CybeRecord Nevada reaches $100,000,000 and is to be issued an additional 500,000
shares of common  stock at $0.01 per share  when the  market  capitalization  of
CybeRecord  Nevada reaches  $200,000,000.  Any shares issued under the Agreement
will be restricted shares, and will have "piggy-back" rights, so that the shares
will be registered upon CybeRecord  Nevada's first registration after the shares
are issued.

                                      F-10


<PAGE>


Note 5.  (Continued)


Two  CybeRecord,  Inc. exist in the United States:  CybeRecord,  Inc., a Florida
corporation  ("CybeRecord  Florida") and  CybeRecord  Nevada.  We are CybeRecord
Florida.  Brent  Nelson is a director  and officer of both  corporations.  Brent
Nelson is also a shareholder of CybeRecord  Florida.  Both  companies  share the
same  President.  Neither  company  owns the stock of the other.  However,  both
companies have taken steps to merge CybeRecord  Florida into CybeRecord  Nevada,
but the merger has not been completed.

While Northwest's  contract is with CybeRecord  Nevada,  Northwest has performed
services for CybeRecord Florida.  CybeRecord Florida has paid Northwest $500 per
month ($5,000 in 1999 and none in 1998). CybeRecord Florida's Board of Directors
has not approved a contract with Northwest. CybeRecord Florida and Northwest are
working to identify the terms upon Northwest will provide services to CybeRecord
Florida.

Since December 31, 1999,  CybeRecord Florida has reached a market capitalization
that exceeds  $200,000,000.  If CybeRecord  Florida and  Northwest  enter into a
consulting  agreement with stock provisions similar to the provisions  contained
in CybeRecord  Nevada's  Agreement,  or CybeRecord  Florida  assumes  CybeRecord
Nevada's obligations under the Agreement,  then Northwest will have the right to
purchase the stock from CybeRecord  Florida.  Emerging Issue Task Force ("EITF")
No.  96-18  states  that  CybeRecord   Florida  would  account  for  this  stock
arrangement  by  estimating  the  fair  value  of  the  arrangement  as  of  the
"measurement  date" and recognizing the consulting  expense over the term of the
consulting agreement.  Based on guidance contained in EITF No. 96-18, management
has determined that the appropriate date to measure the fair value of this stock
arrangement is March 1999 (If CybeRecord  Florida  assumes  CybeRecord  Nevada's
agreement),  or the  date  that  CybeRecord  Florida  enters  into a  consulting
agreement with Northwest.

CybeRecord  also has a consulting  agreement for services with a shareholder and
former chief executive officer. The consultant received $25,000 in 1999 and will
receive an additional $62,500 through May 2000.

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<PAGE>


Note 6.  Subsequent Events

Subsequent to December 31, 1999,  CybeRecord  issued  1,275,000 shares of common
stock to  unrelated  parties  at a price of $1.75 per share  resulting  in total
proceeds of $2,231,250.

In addition,  CybeRecord  borrowed  $100,000 from a company owned by a member of
the  board of  directors.  The loan is due on  demand,  unsecured  and  bears no
interest.











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