UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
--------------------------------------------------------------------------------


                                   FORM 10-KSB/A

(Mark One)

[X]  Annual Report under Section 13 or 15(d) of the  Securities  Exchange Act of
     1934 for the fiscal year ended March 31, 1999.

                                       Or

[]   Transition Report under Section 13 or 15(d) of the Securities  Exchange Act
     of  1934  for  the   transition   period   from -------- to --------.

                       -----------------------------------
                         Commission file number 0-24005
                       -----------------------------------

                                UBARTER.COM INC.
                 (Name of small business issuer in its charter)

          NEVADA                                         91-1739746
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   21400 International Blvd. #207
          Seattle, WA                                         98198
---------------------------------------                -------------------
(Address of principal executive offices)                    (Zip Code)

                                 (206) 870-9290
                           (Issuer's telephone number)
                           ---------------------------

         Securities Registered Under Section 12(b) of the Exchange Act:
                                      None
         Securities Registered Under Section 12(g) of the Exchange Act:
                         Common Stock, $0.001 par value
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
         Yes  [X]                No [ ]

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 the  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.    [X]

State issuer's revenues for most recent fiscal year: $504,500

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  based on the average bid and asked price as of June 1, 1999:
$17,361,000.


<PAGE>


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date:  5,915,420 shares of Common Stock as
of March 31, 1999.

Documents Incorporated by Reference

Portions of Company's  Current Report on Form 8-K/A (for event on March 2, 1999)
dated May 14,  1999 are  incorporated  by  reference  into Part III of this Form
10-KSB.

Transitional Small Business Format.         Yes [  ]  No [X]










                                       2

<PAGE>


                                    PART III

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

     Directors and Executive Officers

     The following  table provides  information as of March 31, 1999  concerning
our directors and executive officers.

Name                        Age                     Position
----                        ---                     --------

Steven M. White             40               Chief Executive Officer, President,
                                             Director and Chairman of the Board
Richard L. Mayer            59               Vice President, Chief Credit
                                             Officer, Secretary and Director
Alan Zimmelman              54               Vice President and Director
Glen T. White               45               Director
Kevin R. Andersen           47               Chief Financial Officer
Bob Bagga                   29               Chief Operating Officer

     Following  is a  discussion  of the  business  background  of  each  of our
directors and executive officers.

     Steven M. White has been a member of the Board of Directors  and has served
as President and Chief  Executive  Officer since  September 1996. From July 1983
until its merger  with  Ubarter.com  in November of 1996,  Mr.  White  served as
President of Cascade Trade Association, a private company involved in the barter
business.  He has  over  nineteen  years  experience  in sales  and  management,
including over fifteen years  affiliated  with companies  involved in the barter
business.  He is currently  serving as Chairman of the Board of Directors of the
National Association of Trade Exchanges for the 1999-2000 term and served as its
President for the 1998-1999 term.

     Richard  L.  Mayer  has  been a member  of the  Board  of  Directors  since
September  1996.  Mr. Mayer joined  Ubarter.com  as a Vice President in November
1996 and was  appointed  Corporate  Secretary in November  1998 and Chief Credit
Officer in March 1999. From November 1995 until its merger with Ubarter.com,  he
was Vice President of Marketing for Cascade Trade Association, a private company
involved in the barter  business.  He has over thirty years  experience in sales
and management,  including over six years affiliated with companies  involved in
the barter business. From April 1989 to November 1995, he was the owner of Money
Mailer of the Sound, a private company  involved in direct mail. From 1960 until
1989, he was employed by General Electric Capital Corp.

     Alan  Zimmelman has been a member of the Board of Directors  since November
1997. Mr.  Zimmelman  joined  Ubarter.com as its Vice President of Operations in
November  1997.  From November 1987 to August 1996, he was President of BXI West
Los Angeles,  a private  company  involved in the barter  business.  He has over
twenty-six  years  experience in sales and management,  including over ten years
affiliated  with  companies  involved  in  the  barter  business,  twelve  years
affiliated  with companies in the hotel industry and five years  affiliated with
companies in hospital administration.

     Glen T. White has been a member of the Board of  Directors  since  November
1997.  Since June 1977, he has been in the US Navy and currently  holds the rank
of Commander. Glen T. White is the brother of Steven M. White.

     Kevin R.  Andersen  has served as Chief  Financial  Officer  since  joining
Ubarter.com  in August  1998.  Mr.  Andersen  has been  partner with the firm of
Andersen,  Andersen & Strong L.C.  since 1990. He was formerly with the national
accounting firm of Laventhol & Horwath where he served in the Las Vegas,


                                       3

<PAGE>


Nevada  office and in the firm's  national  tax office in  Washington  D.C.  Mr.
Andersen  was on the  Laventhol  &  Horwath  Teaching  Faculty  and  has  been a
Professor of Taxation at the Washington  College of Law. Mr. Andersen received a
B.S.  degree in  Accounting  from the  University  of Utah in 1977,  a Master of
Accountancy (Taxation) from UNLV in 1988, and has been a CPA since 1980.

     Bob Bagga has served as Chief Operating  Officer since joining  Ubarter.com
in March  1999.  Prior to joining  Ubarter.com,  Mr.  Bagga was Chief  Executive
Officer of Barter  Business  Exchange  Inc. from 1997 and prior to that was Vice
President  from 1992 to 1997. See "Item 12.  Certain  Relationships  and Related
Transactions - Acquisition of Barter Business Exchange Inc."

     Significant Employees and Consultants

     We employ several  administrative,  technical,  sales and support personnel
who perform  various  day-to-day  tasks and  conduct  operations.  In  addition,
Ubarter.com  from time to time uses consultants or consulting firms to assist us
in developing our business plan and  operations.  The following  individuals are
significant employees or consultants of Ubarter.com.

     Liad Y. Meidar,  24, is President of Astra  Ventures LLC and since  October
1998,  has performed the duties of our Vice  President,  Strategic  Development.
Ubarter.com  retained  Astra  Ventures  in  October  1998 to  advise  the  Chief
Executive  Officer and Board of  Directors on  corporate  planning,  mergers and
acquisitions.  From July 1997 to September  1998,  Mr.  Meidar was an investment
banker in the Financial  Sponsors Group at BT Alex. Brown  Incorporated where he
served  financial  sponsor  clients in  transactions  involving  high yield debt
issuances,   senior  debt   underwriting   and  syndication  and   international
acquisitions.  Mr. Meidar  received a B.A.  degree in Economics  from  Princeton
University  in June  1997.  See  "Item 12.  Certain  Relationships  and  Related
Transactions Relationship with Astra Ventures LLC."

     Dan C. Schneider,  45, has served as Chief Technology Officer since joining
Ubarter.com  in August 1998.  From 1985 to 1998,  he worked at Darigold  Inc. as
manager of its PC-related  activities.  He was responsible for the deployment of
UNIX-based,  DOS-based,  and  Windows-based  systems and  networks,  and managed
hardware and software  support.  In 1997, he developed the corporate website for
Darigold, and established a password-protected  database allowing milk producers
to check daily quality  control  testing  data.  Mr.  Schneider  received a B.A.
degree in Business Administration from Central Washington University in 1977.

     Board Committees and Meetings

     During the fiscal year ended March 31, 1999,  the Board of  Directors  held
six meetings. During this period, each of the directors attended or participated
in more than 75% of the  total  number of  meetings  of the Board of  Directors.
Ubarter.com's  Board of Directors  also acts from time to time by written action
in lieu of meetings.

     The Board of Directors has not yet established a Compensation  Committee or
an Audit  Committee.  Ubarter.com  does not  intend to  establish  a  Nominating
Committee.   When   established,    the   Compensation   Committee   will   make
recommendations  concerning the salaries and incentive compensation of employees
of, and consultants to,  Ubarter.com,  and will  administer  Ubarter.com's  1998
Stock Option Plan. When established, the Audit Committee will be responsible for
reviewing  the  results  and scope of  audits  and other  services  provided  by
Ubarter.com's independent auditors.

     Director Compensation

     Except  for  grants  of  stock  options  and   reimbursement  of  expenses,
Ubarter.com  generally  does not  compensate  our  directors or officers for the
services  they  render us as  directors.  Ubarter.com  does not  compensate  our
directors for committee  participation or for performing special assignments for
the Board of Directors.



                                       4


<PAGE>


Under our 1998 Stock  Option  Plan,  non-employee  directors  receive  automatic
grants of stock options to purchase  5,000 shares of common stock each year upon
their re-election at the annual meeting of shareholders, exercisable at not less
than the fair market value of our common stock on the day of grant.  The options
vest and  become  exercisable  on the one  year  anniversary  of the  director's
election  or  reelection  to the Board of  Directors.  Mr.  Glen White  received
options to purchase  5,000 shares of common stock at an exercise  price of $.813
per  share  upon his  election  as a  director  at the 1998  annual  meeting  of
shareholders.  Mr.  Steven White and Messrs.  Zimmelman  and Mayer each received
options to purchase  5,000 shares of common stock at an exercise  price of $.813
per share for their  service as  directors.  In the future,  employees  who also
serve as directors of Ubarter.com  will receive no additional  compensation  for
their service as directors.

     Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive  officers and all persons who beneficially own more than
10 percent of the outstanding  shares of the Company's Common Stock to file with
the Securities and Exchange  Commission initial reports of ownership and reports
of changes in ownership of such Common Stock. Directors,  executive officers and
such  beneficial  owners are also required to furnish the Company with copies of
all Section 16(a) reports they file.  To the Company's  knowledge,  based solely
upon a review of the copies of such reports furnished to the Company and written
representations that no other reports were required during the fiscal year ended
March 31, 1999,  all Section  15(a)  reporting  requirements  applicable  to the
Company's directors, executive officers and such beneficial owners were complied
with.

Item 10. Executive Compensation

     Executive Compensation

     The  following  table  sets  forth  all  compensation  paid to or earned by
Ubarter.com's  President and Chief Executive Officer. No other executive officer
of Ubarter.com  received total annual salary,  bonus and other  compensation  in
excess of $100,000 in the fiscal year ended March 31, 1999.

                           Summary Compensation Table
                           --------------------------
                                                                    Long-Term
                                                                   Compensation
                             Annual Compensation                     Awards
                             -------------------                     -------
                                                                   Securities
Name and Principal                                                 Underlying
Position                   Year        Salary       Bonus           Options
--------                   ----        ------       -----           -------

Steven M. White,           1999        $85,000        -             45,000
President and CEO          1998         75,000        -



Employment Contracts and Change in Control Agreements

     Steven White.  Pursuant to an Employment Agreement effective as of November
24, 1998, we employ Steven White as our President and Chief  Executive  Officer.
His term of employment  commenced on December 1, 1998 and continues for a period
of three years. Mr. White's salary is $85,000 per annum,  which may be increased
annually at the discretion of the Board of Directors.



                                       5

<PAGE>


     Richard L.  Mayer.  Pursuant to an  Employment  Agreement  effective  as of
November 24, 1998, we employ  Richard  Mayer as our Vice  President of Marketing
and  Operations.  His term of  employment  commenced  on December  1, 1998,  and
continues for a period of three years. Mr. Mayer's initial salary is $50,000 per
annum,  which  may be  increased  annually  at the  discretion  of the  Board of
Directors.

     Alan  Zimmelman.  Pursuant  to  an  Employment  Agreement  effective  as of
November 24, 1998, we employ Alan Zimmelman as our Vice President of Area Broker
Relations.  His term of employment  commenced on December 1, 1998, and continues
for a period of three  years.  Mr.  Zimmelman's  initial  salary is $50,000  per
annum,  which  may be  increased  annually  at the  discretion  of the  Board of
Directors.

     Kevin R.  Andersen.  Pursuant to an  Employment  Agreement  effective as of
August 1, 1998,  we employ  Kevin  Andersen  on a  part-time  basis as our Chief
Financial  Officer.  His term of  employment  commenced  on August 1, 1998,  and
continues for a period of three years. Mr. Andersen's base salary is $75,000 per
annum,   which  may  be   increased   on  a  temporary   basis  for   additional
project-related  accounting  duties, or increased  annually at the discretion of
the Board of Directors.

     Bob Bagga.  Pursuant to an  Employment  Agreement  effective as of March 1,
1999,  we employ Bob Bagga as our Chief  Operating  Officer  for a period of two
years.  Mr.  Bagga's base salary is  CD$120,000  (approximately  US$80,000)  per
annum,  which  may be  increased  annually  at the  discretion  of the  Board of
Directors.

     Each of the agreements for Messrs.  White,  Zimmelman,  Mayer, Andersen and
Bagga entitle them to receive  options to purchase 40,000 shares of common stock
for each year of employment, which will vest 50% on the first anniversary of the
date of grant,  75% on the date  which is 18 months  from the grant  date and be
fully vested on the second anniversary of the grant date. All agreements contain
a change of control provision that provides for the continuing employment of the
officer for the duration of the term of the  agreement in the event of a merger,
acquisition of Ubarter.com or sale of substantially all of its assets.  Upon the
change of control event the agreements  provide that in addition to any payments
made for continued employment, individuals will receive additional payments from
us as follows:  $150,000 each for Messrs. White, Bagga, Mayer and Zimmelman, and
$50,000 for Kevin Andersen.

Stock Options

     The  following  tables  summarize  option grants made by the Company to its
Chief  Executive  Officer  during the fiscal year ended March 31, 1999,  and the
value of options granted during fiscal 1999 and held by such person at March 31,
1999. No stock options were exercised during fiscal 1999.










                                       6
<PAGE>


                Option Grants in Fiscal Year Ended March 31, 1999

<TABLE>

                                                   Percent of
                                                      Total
                                                     Options
                            Number of                Granted          Exercise
                            Securities            To Employees         or Base
                        Underlying Options          In Fiscal           Price           Expiration
Name                         Granted                Year 1998         ($/Share)           Date(2)
----                         -------                ---------         ---------           ------

<S>                         <C>                        <C>             <C>                  <C>
Steven M. White,            45,000(1)                  14.4%           $0.8125         June 1, 2003
President and CEO

</TABLE>
-----------------------------
(1)  The options are 50% vested on June 1, 1999,  75% vested on December 1, 1999
     and are fully  vested  on June 1,  2001.  Upon the  occurrence  of  certain
     defined   accelerating  events,  these  options  would  become  immediately
     exercisable.


                  Aggregated Option Exercises During Year Ended
              March 31, 1999 and Value of Options at March 31, 1999

<TABLE>

                                                            Number of Securities            Value of Unexercised
                            Shares                         Underlying Unexercised               In-the-Money
                          Acquired on        Value                 Options                        Options
                           Exercise        Realized           at March 31, 1999            at March 31, 1999 (1)
                           --------        --------           -----------------            ---------------------
         Name                                             Exercisable  Unexercisable     Exercisable  Unexercisable
         ----                                             -----------  -------------     -----------  -------------
<S>                        <C>               <C>              <C>         <C>              <C>          <C>
Steven M. White               -               -                -          45,000             -          $75,960

</TABLE>

-----------------------------
(1)  "Value" has been determined based upon the difference between the per share
     exercise price and the market value of the Common Stock at March 31, 1999.

Item 11. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain information regarding the beneficial
ownership of our common stock as of June 30, 1999 for (a) each person we know to
be a  beneficial  owner of five  percent or more of our common  stock,  (b) each
executive  officer named in the Summary  Compensation  Table above and director,
and (c) all  directors and  executive  officers as a group.  Except as otherwise
indicated,  the shareholders listed in the table have sole voting and investment
power with respect to the Common Stock owned by them.





                                       7

<PAGE>


                                       Amount and Nature
Name and Address(1)                      of Beneficial             Percentage
of Beneficial Owner                        Ownership               of Shares
-------------------                        ---------               ---------


Steven M. White(2)                         1,419,196                 23.8%

Richard L. Mayer(2)                           36,500                    *

Alan Zimmelman(2)                             41,400                    *

Glen T. White(2)                              10,000                    *

New Horizons LP(3)                         1,214,800                 19.2%
248 West Park Avenue
Long Beach, NY 11561

Astra Ventures LLC(4)                        631,500                  9.6%
140 West 57th Street, Suite 8D
New York, NY  10019

All executive officers and                 1,679,596                 28.1%
directors as a  group(2)
(6 persons)
---------------------------------
*  Less than one percent.

(1)  The business  address of Steven White and all other directors and executive
     officers is 21400 International Blvd., Suite 207, Seattle, WA 98198.

(2)  Includes the following  number of shares which could be acquired  within 60
     days of June 30, 1999, through the exercise of stock options: Steven White,
     22,500 shares;  Mr. Zimmelman, 22,500 shares; Mr. Mayer, 22,500 shares; and
     all directors and executive officers, 107,500 shares.

(3)  Sors Inc., as general  partner,  is also deemed the beneficial owner of the
     shares of the common stock owned by New Horizons LP because of its power to
     vote and dispose of those shares.  Includes  400,000  shares which could be
     acquired through the exercise of outstanding warrants.

(4)  Includes  630,000 shares which could be acquired within 60 days of June 30,
     1999, through the exercise of stock options. Liad Y. Meidar,  President and
     controlling  equity  owner  of  Astra  Ventures  LLC  is  also  deemed  the
     beneficial  owner of the options owned by Astra Ventures LLC because of his
     power  to  vote  and  dispose  of  those  shares.  See  "Item  12.  Certain
     Relationships  and Related  Transactions - Relationship with Astra Ventures
     LLC."

Item 12. Certain Relationships and Related Transactions

Merger with Cascade Trade Association.

     Prior to the  November  1996  merger  of  Ubarter.com  with  Cascade  Trade
Association,  Steven White and Richard Mayer were executive  officers of Cascade
Trade  Association.  In September  1996, Mr .White and Mr. Mayer were  appointed
directors of Ubarter.com  and Mr. White was appointed an officer.  Mr. White was
the principal  shareholder of Cascade Trade Association.  In connection with the
merger, Mr. White was issued 1,800,000 shares of common stock of Ubarter.com.


Acquisition of Barter Business Exchange Inc.

     In  connection  with our  acquisition  of  Barter  Business  Exchange  Inc.
effective  March 1,  1999,  Mr.  Bagga,  our Chief  Operating  Officer  received
consideration  of CD$2,450,000  (US$1,641,500)(subject  to



                                       8

<PAGE>


certain adjustments) consisting of: (i) cash payments of CD$850,000 (US$563,300)
and US$100,000 at closing;  (ii) issuance of a promissory  note in the principal
amount  of  CD$850,000  (US$563,300),   which  is  subject  to  adjustment,   if
applicable, as discussed below; (iii) payment of CD$250,000 (US$167,500) Ubarter
Dollars at  closing;  and (iv)  issuance of 150,000  shares of our common  stock
(having a value of US$375,000 as of the closing date). The promissory note bears
no interest and is payable March 1, 2000. The principal  amount of the note will
be reduced by the amount,  if any, that 10% of the consolidated cash revenues of
Ubarter.com  for the period  from  March 1, 1999 to March 1, 2000,  is less than
CD$750,000.  The 10% cash revenues do not include trade dollar revenues but will
include any incremental  cash revenues to Ubarter.com from any acquisitions of a
majority  interest in any entities  during the period and cash revenues  derived
from strategic  alliances or joint ventures  during the period.  Our obligations
under the note are secured by a share  pledge  agreement  under which we pledged
the BBE  shares  to Mr.  Bagga.  If 10% of the  consolidated  cash  revenues  of
Ubarter.com  during  the  period  from  March 1, 1999 to March 1,  2000,  exceed
CD$750,000  (US$500,000),  we must pay Mr.  Bagga such  amount  over  CD$750,000
(US$500,000)  in equivalent  value of our common  stock.  These shares are to be
registered  and freely  tradeable,  with a value per share  equal to the closing
trading price on the business day immediately proceeding March 1, 2000.

     We agreed to register the resale of the 150,000  shares issued to Mr. Bagga
after the closing of the  acquisition.  Upon  registration,  those shares are to
have a minimum  aggregate value of $350,000.  If the minimum  aggregate value is
below this amount, then we must make up the difference by making, at our option,
a cash payment or through  issuing  additional  shares of our common stock.  Mr.
Bagga has agreed not to sell any of those  shares  prior to  September  1, 1999,
and, thereafter,  not to sell more than 25,000 of those shares per month without
prior notice to Ubarter.com. As a part of the acquisition, we entered into a two
year  employment  agreement with Mr. Bagga and named him as our Chief  Operating
Officer.

Relationship with Astra Ventures LLC.

     We have entered into a consulting  agreement with Astra Ventures LLC. Astra
Ventures has agreed to serve as our advisor through December 31, 2001,  focusing
on potential acquisitions,  strategic planning and business development. Liad Y.
Meidar is the President and controlling equity owner of Astra Ventures LLC. As a
part of the consulting  arrangement with Astra Ventures,  Mr. Meidar acts as our
Vice President,  Strategic Development.  For their services, Astra Ventures will
receive cash compensation of $100,000 per year and an aggregate total of 630,000
stock options on a fully diluted basis. All such options were fully vested as of
their date of grant and terminate on October 1, 2003. Of these  options,  50,000
are exercisable at the price of $4.00;  40,000 at $6.00; 60,000 at $8.00; 80,000
at $10.00;  160,000 at $12.00;  and 240,000 at $14.00. If we consummate a merger
or acquisition  transaction  during the term of the agreement or within one year
thereafter,  Astra Ventures will receive a fee equal to 3% of the  consideration
paid by us,  payable  in cash or, at Astra  Ventures'  option,  in shares of our
common stock valued at fair market value.  In connection with our acquisition of
Barter Business  Exchange Inc. in March 1999,  Astra Ventures elected to receive
options to purchase  40,000  shares of our common stock at an exercise  price of
$2.75 per share in lieu of cash compensation. These options become 50% vested on
March 2, 2000,  75%  vested on  September  2, 2000 and fully  vested on March 2,
2001.  The  options  expire upon the earlier of (i) March 2, 2004 or (ii) in the
event the consulting agreement with Astra Ventures is terminated or not renewed,
on the expiration of 90 days from the date of termination of such agreement.

Relationship With New Horizons L.P.

     New  Horizons  L.P.  is one of our  significant  shareholders.  The general
partner of New Horizons LP is Sors Inc.,  which is managed by Joseph  MacDonald.
The spouse of Mr. MacDonald,  Mary Martin,  entered into a consulting  agreement
with us in August  1998.  In exchange  for  investor  relations  and  consulting
services rendered and for  reimbursement of expenses,  we paid Ms. Martin $2,000
per month and granted her 40,000  options,  which were fully  vested as of their
grant  date,  and are  exercisable  at  $.8125  per  share.  The  agreement  was
terminated in April 1999.




                                       9

<PAGE>


     In July 1998, New Horizons LP purchased  400,000  units,  consisting of one
share of common stock and one Warrant,  offered by us in a private placement for
$1.25 per unit. The Warrants  entitle New Horizons LP to purchase 400,000 shares
of common stock at a price of $1.50 per share.















                                       10


<PAGE>





                          INDEPENDENT AUDITORS' REPORTS
                                       and
                        CONSOLIDATED FINANCIAL STATEMENTS


                             MARCH 31, 1999 AND 1998






<PAGE>



                          INDEPENDENT AUDITOR'S REPORT

To the Stockholders and Board of Directors
     of Ubarter.com Inc.

We  have  audited  the  consolidated  balance  sheet  of  Ubarter.com  Inc.  and
subsidiary  as of March 31, 1999,  and the related  consolidated  statements  of
operations,  stockholders'  equity and cash flows for the year then ended. 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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Ubarter.com Inc.
and  subsidiary as of March 31, 1999,  and the results of their  operations  and
their cash flows for the year then ended, in accordance with generally  accepted
accounting principles.



/s/ Moss Adams LLP
Seattle, Washington
June 16, 1999





                                       1


<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors
     of Ubarter.com Inc. (formerly International Barter Corp.) and Subsidiary
Seattle, Washington

We have audited the consolidated  financial statements of Ubarter.com  (formerly
International  Barter Corp.) and  subsidiary  for the year ended March 31, 1998.
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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  consolidated  financial  position of International
Barter  Corp.  and  subsidiary  as of March 31,  1998 and the  results  of their
operations  and their cash flows for the year then  ended,  in  accordance  with
generally accepted accounting principles.

/s/ Andersen Andersen & Strong L.C.

June 19, 1998
Salt Lake City, Utah







                                       2


<PAGE>


                                                                UBARTER.COM INC.
                                                      CONSOLIDATED BALANCE SHEET
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------

<TABLE>

                                     ASSETS
                                                                                   1999          1998
                                                                               -----------    -----------
<S>                                                                            <C>            <C>
CURRENT ASSETS
     Cash and cash equivalents .............................................   $   442,700    $   382,600
     Accounts receivable, net ..............................................       305,700         63,300
     Inventory .............................................................       310,400              -
     Other current assets ..................................................         9,200          2,900
                                                                               -----------    -----------
             Total current assets ..........................................     1,068,000        448,800
                                                                               -----------    -----------

EQUIPMENT AND LEASEHOLDS, net ..............................................       383,600         42,300
                                                                               -----------    -----------

OTHER ASSETS
     Goodwill ..............................................................     2,750,900              -
     Prepaid advertising ...................................................       135,000              -
     Notes receivable ......................................................        23,500         32,800
     Other assets ..........................................................        28,700          1,200
                                                                               -----------    -----------
                                                                                 2,938,100         34,000
                                                                               -----------    -----------
                                                                               $ 4,389,700    $   525,100
                                                                               ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable ......................................................   $   111,400    $     9,300
     Accrued liabilities ...................................................        28,200          7,700
     Unearned revenue ......................................................       186,300              -
     Trade dollars issued in excess of earned ..............................     2,147,900          5,400
     Note payable to shareholder ...........................................        66,200              -
     Current portion of long-term obligations ..............................        35,400         13,100
                                                                               -----------    -----------
             Total current liabilities .....................................     2,575,400         35,500
                                                                               -----------    -----------
LONG-TERM OBLIGATIONS ......................................................        81,600         19,100
                                                                               -----------    -----------

COMMITMENTS (Note 9)

STOCKHOLDERS' EQUITY
     Common stock
                                                                                     5,900          3,800
     Additional paid-in capital ............................................     2,649,300        540,700
     Subscribed stock ......................................................             -         37,500
     Accumulated deficit ...................................................      (909,500)      (111,500)
     Treasury stock ........................................................       (13,000)             -
                                                                               -----------    -----------
                                                                                 1,732,700        470,500
                                                                               -----------    -----------
                                                                               $ 4,389,700    $   525,100
                                                                               ===========    ===========

</TABLE>


See accompanying notes.
                                                                               3
--------------------------------------------------------------------------------


<PAGE>


                                                                UBARTER.COM INC.
                                            CONSOLIDATED STATEMENT OF OPERATIONS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------

<TABLE>


                                                                                   1999           1998
                                                                               -----------    -----------
 REVENUE
<S>                                                                             <C>           <C>
      Trade exchange revenue .................................................  $ 460,600     $ 540,600
      Corporate trading revenue ..............................................     43,900        45,500
                                                                               -----------    -----------
                                                                                  504,500       586,100
                                                                               -----------    -----------
 COSTS AND OPERATING EXPENSES
      Cost of corporate trading revenue ......................................     43,900        45,500
      Sales and marketing ....................................................     94,700        73,900
      Product development ....................................................    216,300        29,900
      General and administrative .............................................    990,600       407,000
                                                                               -----------    -----------
                                                                                1,345,500       556,300
                                                                               -----------    -----------
 INCOME (LOSS) FROM OPERATIONS ...............................................   (841,000)       29,800
                                                                               -----------    -----------
 OTHER INCOME (EXPENSE)
      Interest income ........................................................     45,700         8,800
      Interest expense .......................................................     (2,700)       (4,900)
                                                                               -----------    -----------
                                                                                   43,000         3,900
                                                                               -----------    -----------
 INCOME (LOSS) BEFORE INCOME TAXES ...........................................   (798,000)       33,700
 INCOME TAXES ................................................................          -         1,200
                                                                               -----------    -----------
 NET INCOME (LOSS) ...........................................................  $(798,000)    $  32,500
                                                                               ===========    ===========
 AVERAGE COMMON AND EQUIVALENT SHARES
      Basic ..................................................................  5,521,583     2,632,424
                                                                               ===========    ===========
      Diluted ................................................................  5,521,583     2,949,942
                                                                               ===========    ===========
 NET INCOME (LOSS) PER COMMON SHARE
      Basic .................................................................. $    (0.14)    $    0.01
                                                                               ===========    ===========
      Diluted ................................................................ $    (0.14)    $    0.01
                                                                               ===========    ===========

</TABLE>


See accompanying notes.
                                                                               4
--------------------------------------------------------------------------------


<PAGE>


                                                                UBARTER.COM INC.
                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                             YEARS ENDED MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------

<TABLE>

                                                            Additional
                                        Common Stock         Paid-In     Subscribed   Accumulated      Treasury Stock
                                     Shares     Amount       Capital       Stock       Deficit      Shares     Amount      Total
                                     ------     ------       -------       -----       -------      ------     ------      -----
<S>                                <C>        <C>          <C>         <C>           <C>              <C>       <C>        <C>
BALANCE, March 31, 1997 .......    1,250,000  $  1,300     $ 131,900     $ 150,000    $ (144,000)       --        --      $ 139,200
  2-for-1 common stock split
    effective July 24, 1998 ...    1,250,000     1,300        (1,300)         --            --          --        --             --
                                   ---------  ---------   ------------   ---------    -------------  -------  ---------  ----------
BALANCE, March 31, 1997 .......    2,500,000     2,600       130,600       150,000      (144,000)       --        --        139,200
  Issuance of subscribed stock       600,000       600       149,400      (150,000)         --
  Exercise of "A" and "B"            492,900       400       188,900        37,500          --          --        --        226,800
warrants
  Issuance of stock ...........      240,000       200        71,800          --            --          --        --         72,000
  Net income ..................         --        --            --            --          32,500        --        --         32,500
                                   ---------  ---------   ------------   ---------    -------------  -------  ---------  ----------
BALANCE, March 31, 1998 .......    3,832,900     3,800       540,700        37,500      (111,500)       --        --        470,500

  Issuance of subscribed stock       100,000       100        37,400       (37,500)         --          --        --             --
  Exercise of "B" warrants ....      563,500       500       278,000          --            --          --        --        278,500
  Exercise of  "C" and "D"
    warrants ..................      480,000       500       228,300          --            --          --        --        228,800
  Issuance of stock ...........      800,000       800       999,200          --            --          --        --      1,000,000
  Issuance of stock in
    connection with acquisition      150,000       200       374,800          --            --          --        --        375,000
  Stock options granted .......         --        --         190,900          --            --          --        --        190,900
  Treasury stock acquired .....         --        --            --            --            --        10,980   (13,000)     (13,000)
  Net loss ....................         --        --            --            --        (798,000)       --        --       (798,000)
                                   ---------  ---------   ------------   ---------    -------------  -------  ---------  ----------
BALANCE, March 31, 1999 .......    5,926,400  $  5,900    $2,649,300      $   --       $(909,500)     10,980  $(13,000) $ 1,732,700
                                   =========  =========   ============   =========    =============  =======  =========  ==========

</TABLE>



See accompanying notes.                                                        5
--------------------------------------------------------------------------------


<PAGE>


                                                                UBARTER.COM INC.
                                            CONSOLIDATED STATEMENT OF CASH FLOWS
                                             YEARS ENDED MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------

<TABLE>


                                                                                          1999               1998
                                                                                     ---------------    ---------------
<S>                                                                                      <C>                  <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
      Net income (loss)                                                                  $(798,000)          $ 32,500
      Adjustments to reconcile net income (loss) to net cash
              provided by operating activities
          Depreciation                                                                      18,400             10,800
          Non-cash charges related to stock option grants                                  172,800                  -
          Net trade dollars earned                                                          (3,700)          (106,600)
          Accrued interest on notes receivable                                              (2,400)                 -
      Change in operating assets and liabilities
          Accounts receivable                                                               38,700             (2,400)
          Prepaid advertising and other assets                                            (133,100)             4,800
          Accounts payable and other liabilities                                             7,300             12,900
                                                                                     ---------------    ---------------
                                                                                          (700,000)           (48,000)
                                                                                     ---------------    ---------------

 CASH FROM INVESTING ACTIVITIES
      Acquisition of equipment and leaseholds                                              (84,800)           (13,900)
      Purchase of Barter Business Exchange Inc. stock                                     (647,300)                 -
      Notes receivable collections                                                          11,700                  -
                                                                                     ---------------    ---------------
                                                                                          (720,400)           (13,900)
                                                                                     ---------------    ---------------

 CASH FROM FINANCING ACTIVITIES
      Proceeds from issuance of common stock                                             1,507,300            298,900
      Treasury stock acquired                                                              (13,000)                 -
      Repayment of notes payable                                                           (13,800)           (16,700)
                                                                                     ---------------    ---------------
                                                                                         1,480,500            282,200
                                                                                     ---------------    ---------------

 NET CHANGE IN CASH AND CASH EQUIVALENTS                                                    60,100            220,300

 CASH AND CASH EQUIVALENTS
      Beginning of period                                                                  382,600            162,300
                                                                                     ---------------    ---------------
      End of period                                                                      $ 442,700           $382,600
                                                                                     ===============    ===============
 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the year for:
          Interest                                                                       $   2,700           $  5,100
                                                                                     ===============    ===============
          Income taxes                                                                   $       -              $   -
                                                                                     ===============    ===============
 NON-CASH INVESTING AND FINANCING ACTIVITIES
      Furniture purchased with trade dollars                                             $       -           $ 13,700
                                                                                     ===============    ===============
      See Note 3 for additional disclosure of noncash transaction

</TABLE>


See accompanying notes.                                                        6
--------------------------------------------------------------------------------


<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 1 -  Description Of Business And Organization

     Ubarter.com Inc., formerly  International Barter Corp., was incorporated on
     September  18,  1996,  in the  State  of  Nevada.  Ubarter.com  Inc.  ("the
     Company") operates a trade exchange offering bartering services for retail,
     professional,   media  and  corporate  clients.  Operations  are  primarily
     transacted  in  the  State  of  Washington.  Operations  of  the  Company's
     subsidiary,  Barter  Business  Exchange  Inc.  (see Note 3), are  primarily
     transacted in the Canadian  provinces of Ontario and British Columbia.  The
     Company acts as a third-party  record-keeper  of clients'  transactions and
     balances,  which are  denominated  in Trade  Dollars.  A Trade Dollar is an
     accounting  unit used to record  the value of trades as  determined  by the
     buying and selling parties in barter transactions. Trade Dollars denote the
     right to receive  goods or  services  available  from other  clients or the
     obligation to provide goods or services to other clients. Trade Dollars may
     not be redeemed for cash.  Trade Dollars are not legal tender,  securities,
     or  commodities.  Clients pay cash and Trade Dollar fees and commissions to
     the  Company.  The  Company  typically  receives a cash  commission  on all
     transactions  charging  both the buyer and  seller 5% on the  purchase  and
     sale.


Note 2 -  Summary of Significant Accounting Policies

     Principles of Consolidation - The consolidated financial statements include
     the accounts of the Company  and,  effective  March 31,  1999,  the balance
     sheet of its wholly-owned subsidiary,  Barter Business Exchange Inc. (BBE).
     The  Company's  fiscal  year  end is March  31.  BBE's  fiscal  year end is
     February  28.  For  purposes  of  consolidation  the  difference  in fiscal
     year-ends is not  significant.  All significant  intercompany  accounts and
     transactions have been eliminated.

     Stock Split - On July 9, 1998 the Board of  Directors  authorized a 2-for-1
     split of its common stock to be  distributed to  stockholders  of record at
     the  close  of  business  on  July  24,  1998.  All  per-share  and  shares
     outstanding data in the accompanying consolidated financial statements have
     been restated to reflect the stock split.

     Foreign  Currency  Translation  -  Financial  statements  of the  Company's
     Canadian  subsidiary,  BBE,  are  translated  into U.S.  dollars  using the
     exchange  rate at the balance  sheet date for assets and  liabilities.  The
     functional  currency of BBE is the local  currency,  the  Canadian  dollar.
     Translation adjustments, if necessary, are recorded as a separate component
     of Stockholders' Equity. There were no translation  adjustments required as
     of March 31, 1999 and 1998.

     Comprehensive  Income - In 1999, the Company adopted Statement of Financial
     Accounting  Standards ("SFAS") No. 130, "Reporting  Comprehensive  Income".
     This statement  establishes rules for the reporting of comprehensive income
     and its  components.  The  adoption  of SFAS No. 130 had no impact on total
     stockholders' equity as of March 31, 1999.



                                                                               7
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 2 -  Summary of Significant Accounting Policies  (Continued)

     Revenue  Recognition - The Company  recognizes revenue equal to the cash to
     be  received  from  the  commission  earned  when  the  buyer  has  made an
     unconditional commitment to pay and the earnings process has been completed
     by the  finalization  of a trade  transaction.  Revenue is  recognized  for
     monthly dues after the fees have been earned. Initiation and annual renewal
     fees are  nonrefundable,  and are  deferred  and  included in income over a
     twelve month period.

     Product  Development  Costs - Product  development  costs include  expenses
     incurred  by the  Company to  develop,  enhance,  monitor  and  operate the
     Company's website. Product development costs are expensed as incurred.

     Trade Dollar  Transactions - The Company uses the ratio of one Trade Dollar
     to one local  currency  dollar (United States or Canadian) in measuring and
     accounting for purchases and sales. This one-for-one ratio is the pervasive
     standard with the Company and throughout the barter  industry.  The Company
     does not recognize any accounting  implications if differences are observed
     between trade dollar and the applicable  local currency  dollar prices that
     are within  reasonable  ranges that might exist  between  prices of similar
     U.S. dollar or Canadian dollar transactions.

     The negative Trade Dollar balance of the Company is shown as a liability in
     the balance sheet. This occurs as a result of the Company "borrowing" trade
     dollars  through  the  issuance  of Trade  Dollars in excess of the amounts
     earned by the Company.

     Cash and  Cash  Equivalents  - The  Company  considers  all  highly  liquid
     investments  purchased  with a maturity of three  months or less to be cash
     equivalents.

     Inventory  - At times,  the  Company  acquires  inventory  for resale  from
     clients  of the  barter  exchange.  Inventory  is  stated  at lower of cost
     (first-in, first-out basis) or market.

     Allowance for  Uncollectible  Accounts - The Company  provides an allowance
     for accounts receivable which are doubtful of collection.  The allowance is
     based upon  management's  periodic  analysis of receivables,  evaluation of
     current economic conditions,  and other pertinent factors.  Ultimate losses
     may vary from the current  estimates  and, as  additions  to the  allowance
     become necessary,  are charged against earnings in the period in which they
     become  known.  Losses are  charged  and  recoveries  are  credited  to the
     allowance.  At March 31, 1999 and 1998, the allowance for doubtful accounts
     was $129,400 and $2,000, respectively.

     Depreciation  and  Amortization  - Equipment and  leaseholds  are stated at
     cost.  Depreciation  is  computed  on the  straight-line  method  over  the
     estimated  useful  lives of the  assets,  generally  five to  seven  years.
     Leasehold  improvements  are  amortized on a  straight-line  basis over the
     shorter of the estimated useful lives or the term of the lease.


                                                                               8
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 2 -  Summary of Significant Accounting Policies  (Continued)

     Goodwill - Goodwill  resulting from the acquisition of BBE was estimated by
     management  to  be  primarily   associated  with  the  acquired  workforce,
     infrastructure  and  technological  expertise.  As a  result  of the  rapid
     technological  changes  occurring in the Internet  industry and the intense
     competition  for  qualified  professionals,  goodwill  is  amortized  on  a
     straight-line  basis over the  estimated  life of the  benefit of 24 months
     (see Note 3).

     Income  Taxes - Income  taxes are  computed  using the asset and  liability
     method.  Under this method,  deferred income tax assets and liabilities are
     determined based on the differences between the financial reporting and tax
     bases of assets  and  liabilities  and are  measured  using  the  currently
     enacted tax rates and laws. Statement of Financial Accounting Standards No.
     109,  Accounting for Income Taxes,  requires a valuation  allowance against
     deferred tax assets if, based on the weight of  available  evidence,  it is
     more likely than not that some or all of its  deferred  tax assets will not
     be realized.

     Basic and Diluted Net Income (Loss) per Share - Basic net income (loss) per
     share is computed using the weighted  average number of shares  outstanding
     during the period.  Diluted net income  (loss) per share is computed  using
     the weighted average number of common shares and common  equivalent  shares
     outstanding  during the period.  Common equivalent shares consist of shares
     issuable upon the exercise of stock options and stock warrants.

     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 revenue and
     expenses during the reported period. Actual results could differ from those
     estimates.

     Concentration  of Credit  Risk -  Financial  instruments  that  potentially
     subject the Company to  significant  concentration  of credit risk consists
     primarily of cash and  accounts  receivable.  Cash is  deposited  with high
     credit, quality financial  institutions.  Accounts receivable are typically
     unsecured and are derived from  revenues  earned from  customers  primarily
     located in the Pacific Northwest and the Canadian  provinces of Ontario and
     British  Columbia.  The Company performs ongoing credit  evaluations of its
     customers and maintains reserves for potential credit losses; historically,
     such losses have been within management's  expectations.  At March 31, 1999
     and  1998,  no one  customer  accounted  for 10% or  more  of the  accounts
     receivable balance.



                                                                               9
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 2 -  Summary of Significant Accounting Policies  (Continued)

     Fair Value of Financial Instruments - The Company's financial  instruments,
     including cash, accounts  receivable,  accounts payable,  notes payable and
     long-term  obligations are carried at cost, which  approximates  their fair
     value because of the short-term maturity of these instruments.

     Advertising  - The Company  recognizes  advertising  expenses in accordance
     with Statement of Position 93-7, "Reporting on Advertising Costs". As such,
     the Company expenses the cost of communicating advertising in the period in
     which  the  advertising  space or  airtime  is used.  Advertising  expenses
     amounted  to $51,700  and  $22,800  for the years  ended March 31, 1999 and
     1998, respectively.

     Stock-based  Employee  Compensation - The Company  accounts for stock-based
     employee  compensation  arrangements  in accordance  with the provisions of
     Accounting  Principles  Board Opinion (APB) No. 25,  "Accounting  for Stock
     Issued to Employees",  and complies with the disclosure  provisions of SFAS
     No.  123,  "Accounting  for  Stock-Based   Compensation".   Under  APB  25,
     compensation  cost is  recognized  over  the  vesting  period  based on the
     difference,  if any,  on the date of grant  between  the fair  value of the
     Company's stock and the amount an employee must pay to acquire the stock.

     Impairment of Long-Lived Assets - The Company evaluates the  recoverability
     of long-lived assets in accordance with "SFAS" No. 121, "Accounting for the
     Impairment of  Long-Lived  Assets to be Disposed of". SFAS No. 121 requires
     recognition  of impairment  of long-lived  assets in the event the net book
     value  of  such  assets   exceeds  the  future   undiscounted   cash  flows
     attributable to such assets.

     Recent Accounting Pronouncements - In March 1998, the American Institute of
     Certified Public  Accountants issued Statement of Position 98-1 (SOP 98-1),
     "Accounting  for the Costs of Computer  Software  Developed or Obtained for
     Internal Use". This standard  requires  companies to capitalize  qualifying
     computer   software  costs  which  are  incurred   during  the  application
     development  stage and amortize them over the software's  estimated  useful
     life. SOP 98-1 is effective for fiscal years  beginning  after December 15,
     1998. The Company does not expect that the adoption of SOP 98-1 will have a
     material impact on its consolidated financial statements.

     In April 1998,  the  American  Institute of  Certified  Public  Accountants
     issued SOP 98-5,  "Reporting on the Costs of Start-Up Activities." SOP 98-5
     is effective for the Company's  fiscal year ending March 31, 2000. SOP 98-5
     requires costs of start-up activities and organization costs to be expensed
     as  incurred.  Adoption is not  expected  to have a material  effect on the
     Company's consolidated financial statements.


                                                                              10
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 2 -  Summary of Significant Accounting Policies  (Continued)

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
     Instruments and Hedging  Activities."  SFAS No. 133 is effective for fiscal
     years  beginning  after  June 15,  1999.  SFAS No.  133  requires  that all
     derivative  instruments  be  recorded  on the  balance  sheet at their fair
     value. Changes in the fair value of derivatives are recorded each period in
     current  earnings or other  comprehensive  income,  depending  on whether a
     derivative  is designed as part of a hedge  transaction  and, if it is, the
     type of hedge transaction. The Company does not expect that the adoption of
     SFAS No.  133 will have a  material  impact on its  consolidated  financial
     statements  because  the Company  does not  currently  hold any  derivative
     instruments.

     Reclassifications  - Certain prior year balances have been  reclassified to
     conform to the current year presentation.


Note 3 -  Acquisition

     Acquisition  of Barter  Business  Exchange,  Inc. - On March 2,  1999,  the
     Company  entered  into a stock  purchase  agreement  to acquire  all of the
     outstanding  capital  stock of  Barter  Business  Exchange  Inc.  (BBE),  a
     privately-held  Canadian  corporation  which  presently  operates  a  trade
     exchange in the  Canadian  Provinces of Ontario and British  Columbia.  The
     total  purchase price of  approximately  $1,270,200 is comprised of cash in
     the  amount of  $663,300;  a  promissory  note in the  principal  amount of
     $66,200 (Note 7); Ubarter.com Trade dollars in the amount of $165,700;  the
     issuance of 150,000 shares of Ubarter.com common stock which had a value of
     $375,000 at the  acquisition  date.  In addition,  the  purchase  agreement
     provides  for  contingent  consideration.  The  terms of the  note  payable
     provide for additional payments of up to $500,000 dependent upon attainment
     of certain operating results. Additionally, if 10% of the cash revenues, as
     defined in the agreement,  exceed $500,000, the Company will be required to
     pay the amount exceeding $500,000 in common shares of the Company.

     The  purchase  has  been  accounted  for  under  the  purchase   method  of
     accounting.  Under the purchase method of accounting, the purchase price is
     allocated to the assets  acquired and  liabilities  assumed  based on their
     estimated fair values at the date of the  acquisition.  The excess purchase
     price over the estimated fair value of the assets  acquired and liabilities
     assumed has been allocated to goodwill.  The Company estimated the economic
     useful life of the goodwill to be two years.



                                                                              11
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 3 -  Acquisition  (Continued)

     The consolidated  financial  statement combines the Company's balance sheet
     as of March 31, 1999 with the balance sheet of BBE as of February 28, 1999.
     The consolidated statement of operations presents the results of operations
     of the Company and excludes the results of  operations  of BBE.  Results of
     operations  of BBE will be  consolidated  with the Company from the date of
     purchase,  March 1, 1999.  However,  due to the  differing  year-ends,  the
     results of operations of BBE for the fiscal year from March 1, 1999 through
     February  28,  2000 will be  consolidated  with the  Company's  results  of
     operations for the fiscal year ended March 31, 2000.

     Statement  of Cash Flows - The  acquisition  of BBE  resulted in a non-cash
     transactions  which  increased  assets  in the  amount  of  $3,069,700  and
     liabilities in the amount of $2,610,400.  Non-cash  consideration  included
     150,000 shares of the Company's  common stock,  trade  dollars,  and a note
     payable (Note 7).

     Unaudited Pro Forma Disclosures of Significant  Acquisition - The following
     unaudited pro forma  consolidated  results of operations give effect to the
     acquisition of BBE as if it had occurred as of the beginning of the period.

<TABLE>

                                                                                      Year Ended
                                                                                       March 31,
                                                                        ---------------------------------------
                                                                        -------------------  ------------------
                                                                               1999                1998
                                                                        -------------------  ------------------
<S>                                                                         <C>                 <C>
 Revenue                                                                    $ 3,289,900         $ 3,219,900
 Net loss                                                                   $(2,682,100)        $(1,739,800)
 Net loss per share - basic                                                 $     (0.49)        $     (0.66)
 Net loss per share - diluted                                               $     (0.49)        $     (0.66)
 Shares used in per share calculation - basic and diluted                     5,521,583           2,632,424

</TABLE>


Note 4 -  Notes Receivable

     At March 31, 1999 and 1998, the Company had notes  receivable  amounting to
     $23,500  and  $32,800  which  bear  interest  ranging  from 10% to  10.75%.
     Although  the  Company  periodically  receives  payments,   the  notes  are
     currently in default. The notes are collateralized by real estate.




                                                                              12
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 5 -  Equipment and Leaseholds

     At March 31,  1999 and 1998,  equipment  and  leaseholds  consisted  of the
     following:

<TABLE>

                                                                1999                1998
                                                          ----------------    ----------------

<S>                                                       <C>                  <C>
     Computer equipment                                   $    183,100         $    13,900
     Equipment                                                 121,800              81,200
     Furniture and fixtures                                    141,500              29,000
     Leasehold improvements                                     57,100              19,700
     Automobile                                                 25,600              25,600
                                                          ----------------    ----------------
                                                               529,100             169,400
     Less:  accumulated depreciation                          (145,500)           (127,100)
                                                          ----------------    ----------------
                                                          $    383,600         $    42,300
                                                          ================    ================

</TABLE>


Note 6 -  Excess of Trade Dollars Issued Over Trade Dollars Earned

     In  accordance  with  the  guidelines   established  by  the  International
     Reciprocal Trade Association,  the Company has the right to borrow from the
     exchange and spend within the exchange systems.  Such a practice is used by
     barter  exchanges,   worldwide,  to  cover  inventory  purchases,   capital
     purchases, operating expenses and to control the supply of trade dollars in
     the  exchange  economy.  The  Company is  obligated  to  provide  goods and
     services to clients to offset any amounts of Trade Dollars issued in excess
     of earned. At March 31, 1999 and 1998, the Company had expended  $2,147,900
     and $5,400  Trade  Dollars  respectively,  in excess of the amount of Trade
     Dollars earned by the Company.


Note 7 -  Notes Payable

     The Company has a $67,000  revolving note payable with a Canadian bank. The
     note  payable  is  subject  to annual  renewal.  There  were no  borrowings
     outstanding  as of March 31,  1999.  Borrowings  on the line of credit  are
     secured by cash and cash equivalents on deposit with the bank.

     In  connection  with the  acquisition  of BBE (Note 3), the  Company  has a
     $66,200 note payable to a shareholder. The non-interest bearing note is due
     on March 1, 2000.



                                                                              13
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 8 -  Long-Term Obligations

     At  March  31,  1999  and  1998,  long-term  obligations  consisted  of the
     following:

<TABLE>

                                                                                   1999                1998
                                                                             ----------------    ----------------
<S>                                                                          <C>                 <C>
     Note payable to Financial Services, Inc. at $800 per
     month, including interest at 10% per annum
     (collateralized by real estate), due 2002                               $     18,400        $     26,300

     Note payable to bank, interest at prime plus 2 1/2%,
     payable in monthly installments of $1,400 plus
     interest, maturing July 2004, partially guaranteed
     by a stockholder and collateralized by equipment                              73,800                   -

     Capital lease for leasehold improvements, due in
     monthly installments of $900, including imputed
     interest of 19%, due December 2001                                            21,800                   -

     Note payable to bank, paid in full in 1999                                         -               5,900

     Other                                                                          3,000                   -
                                                                             ----------------    ----------------
                                                                                  117,000              32,200
     Less current portion                                                         (35,400)            (13,100)
                                                                             ----------------    ----------------
                                                                             $     81,600         $    19,100
                                                                             ================    ================
</TABLE>


     Maturities of long-term obligations for future years ending March 31 are as
     follows:

<TABLE>

                                                                      Capital
                                                  Principal            Lease
                                                  Payments           Obligation             Total
                                             ---------------    ----------------    ----------------
<S>                                             <C>                <C>                 <C>
     2000                                       $     28,400       $      10,800       $      39,200
     2001                                             25,400              10,800              36,200
     2002                                             17,800               7,600              25,400
     2003                                             16,700              -                   16,700
     2004                                              6,900              -                    6,900
                                             ---------------    ----------------    ----------------
                                                      95,200              29,200             124,400
     Amount representing interest                     -                   (7,400)             (7,400)
                                             ---------------    ----------------    ----------------

                                                $     95,200       $      21,800       $     117,000
                                             ===============    ================    ================

</TABLE>

                                                                              14
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 9 -  Commitments

     The Company  leases  office  space under  non-cancelable  operating  leases
     expiring in May 2003. Future minimum lease payments under the leases are as
     follows for the years ending March 31:


          2000                                           $     119,100
          2001                                                  91,400
          2002                                                  79,300
          2003                                                  75,500
          2004                                                  18,900
                                                         -------------

                                                         $     384,200

     Rent expense  amounted to $23,500 and $20,900 for the years ended March 31,
     1999 and 1998, respectively.


Note 10 - Stockholders' Equity

     The Company is  authorized  to issue  25,000,000  shares of $.001 par value
     common stock.  As of March 31, 1999 and 1998, the Company has 5,915,420 and
     3,832,900 shares of common stock outstanding, respectively.

     During fiscal 1997, the Company completed a private placement (Offering) of
     its common  stock  pursuant to which  600,000  shares were  subscribed  for
     $150,000.  Under the terms of the  Offering,  one "A"  warrant  and one "B"
     warrant were issued with each issued share of common stock  issued.  During
     fiscal 1998,  "A" and "B" warrants  were  exercised  for 492,900  shares of
     common  stock for  $226,800.  During the fiscal  year 1999,  the  remaining
     outstanding  "B" warrants were exercised for 563,500 shares of common stock
     with proceeds totaling $278,500.

     During fiscal 1998, the Company completed a private  placement  (Placement)
     of its common stock  pursuant to which 240,000  shares of common stock were
     issued for $72,000.  Under the terms of the Placement,  one "C" warrant and
     one "D"  warrant  was issued  with each one share of common  stock  issued.
     During fiscal 1999, all outstanding "C" and "D" warrants were exercised for
     480,000 shares of common stock with proceeds totaling $228,800.



                                                                              15
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 10 - Stockholders' Equity  (Continued)

     During fiscal 1999, the Company received cash for common stock and warrants
     through a private placement  whereby,  800,000 units were sold at $1.25 per
     unit.  Each unit  consists of one share of common stock and one "E" warrant
     exercisable at $1.50 per share. The warrants expire June 20, 2000. At March
     31, 1999, there were 800,000 "E" warrants issued and outstanding.

     During fiscal 1999, a brokerage  account was opened and funded for the sole
     purpose of repurchasing up to 250,000 shares of the Company's  common stock
     in the open market.  In October of 1998, 10,980 shares were repurchased for
     approximately $13,000 and classified as treasury stock.


Note 11 - Stock Options

     The Company adopted a Stock Option Plan ("the Plan") effective June 1, 1998
     whereby,  non-qualified  and  incentive  stock  options for up to 1,155,040
     shares of common stock may be granted to Directors, Officers, Employees and
     Consultants.  Options  granted  under  the  Plan  are not to have a life in
     excess of five  years  from the date of grant and vest 50% after 12 months,
     75%  after 18  months,  100%  after 24 months  from the date of grant.  The
     provisions  of the Plan allow the  administrators  to determine the vesting
     period of options  granted.

     In June 1998, the Company granted options under the Plan to purchase 55,000
     shares  of  common  stock at an  exercise  price of $0.82  per share to the
     Company's  non-employee  Director and to certain  consultants.  The options
     granted to the  non-employee  Director vest 100% in November  1999, and the
     options  granted to the  consultants  are fully vested.  The options expire
     five years  from the date of grant and were  valued at  $11,400,  which was
     recognized as expense in 1999.

     In October 1998, the Company granted options to purchase  630,000 shares of
     common stock to a consultant.  The options are fully vested and expire five
     years from the date of grant. The exercise prices of the options range from
     $4.00 to $14.00 per share and have a  weighted  average  exercise  price of
     $11.11 per share.  The  options  were  valued at  $243,800.  The Company is
     recognizing  consulting  expense  related to these options granted over the
     consultant's  contractual  period  of  39  months.  In  1999,  the  Company
     recognized  consulting expense of $37,500 related to the stock options. The
     consulting  agreement also contains an anti-dilutive  provision whereby the
     consultant will be granted additional options from time to time so that the
     options will equal  approximately  10.4% of common stock  outstanding  on a
     fully diluted basis.


                                                                              16
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 11 - Stock Options  (Continued)

     In November  1998, the Company  granted  options under the Plan to purchase
     25,000  shares  of  common  stock at  $2.00  per  share  to  other  service
     providers.  The  options  vest over one year and expire five years from the
     date of grant. The options were valued at $11,400,  which was recognized as
     consulting expense during 1999.

     The following table summarizes the Company's stock option activity:

<TABLE>

                                                                               Weighted-
                                                            Number             Average
                                                              of               Exercise
                                                            Shares               Price
                                                       ----------------    ----------------
<S>                                                       <C>                     <C>
     Balance, April 1, 1998                                       -           $      -
         Options granted                                  1,069,000               7.80
         Options forfeited                                   (1,000)              2.75
         Options exercised                                        -                  -
                                                       ----------------    ----------------
     Balance, March 31, 1999                              1,068,000           $   7.17
                                                       ================    ===============
</TABLE>


     The following table summarizes  information  about options  outstanding and
     exercisable at March 31, 1999:

<TABLE>

                                              Options Outstanding                        Options Exercisable
                               -------------------------------------------------   -------------------------------
                                                    Weighted-
                                                     Average         Weighted-                         Weighted-
                                                    Remaining         Average                           Average
          Range of                 Number          Contractual       Exercise          Number          Exercise
      Exercise Prices            Outstanding          Life             Price         Exercisable         Price
----------------------------   ---------------   ---------------   -------------   ---------------   -------------

<S>                                   <C>             <C>              <C>               <C>             <C>
    $ 0.8125   -     $ 2.75           438,000         4.5 years        $   1.49           90,000         $   0.81
    $ 4.00     -     $ 6.00            90,000         4.5 years            4.89           90,000             4.89
    $ 8.00     -     $10.00           140,000         4.5 years            9.14          140,000             9.14
    $12.00     -     $14.00           400,000         4.5 years           13.20          400,000            13.20
                               ---------------   ---------------   -------------   ---------------   -------------
                                    1,068,000         4.5 years        $   7.17           720,000        $   9.82
                               ===============                                     ===============

</TABLE>



                                                                              17
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 11 - Stock Options (Continued)

     The Company applies Accounting Principles Board Opinion No. 25 (APB No. 25)
     in accounting  for stock  options.  Accordingly,  no  compensation  cost is
     recognized  from options  issued under the Company stock option plan if the
     exercise  price  equals the fair value at the date of grant.  During  1999,
     40,000  options were granted to one employee that were fully vested and had
     an exercise  price less than the fair value of the common stock on the date
     of grant.  Using the  intrinsic  value  method  required  by APB No. 25 the
     Company  has  recorded  compensation  expense in the amount of  $112,500 in
     1999.

     An alternative method of accounting for stock options is SFAS No. 123 (Note
     2).  Under SFAS No. 123,  employee  stock  options are valued at grant date
     using  the  Black-Scholes  option-pricing  model and  compensation  cost is
     recognized  ratably over the vesting period.  Had compensation cost for the
     Company's  stock  option plan been  determined  based on the  Black-Scholes
     value at the grant  dates for awards as  prescribed  by SFAS No.  123,  pro
     forma statement of operations for fiscal 1999 would have been as follows:

          Year Ended March 31, 1999
          ----------------------------------------------------------------------
          Net loss
             As Reported                                            $ (798,000)
             Pro forma                                              $ (836,800)
          Net loss per common share
             As Reported                                            $    (0.14)
             Pro forma                                              $    (0.15)
          ----------------------------------------------------------------------

     The effects of applying SFAS No. 123 for the pro forma  disclosures are not
     representative  of the  effects  expected  on  reported  net  earnings  and
     earnings per share in future years.  In addition,  valuations  are based on
     highly  subjective  assumptions  about the  future,  including  stock price
     volatility and exercise patterns.

     The weighted average fair market value of an option granted during 1999 was
     $1.69  using  the   Black-Scholes   option-pricing   model.  The  following
     assumptions were applied in determining the pro forma compensation cost:

          Year Ended March 31, 1999
          ----------------------------------------------------------------------
          Interest rate                                                   6.0%
          Dividend yield                                                  0.0%
          Expected volatility                                           122.8%
          Expected useful life in years                                   5
          ----------------------------------------------------------------------




                                                                              18
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 12 - Income Taxes

     The components of the provision for income taxes at March 31, 1999 and 1998
     are as follows:

<TABLE>

                                                                    1999                1998
                                                              ----------------    ----------------
     <S>                                                       <C>                  <C>
     Current - Federal                                         $      -             $         -
     Deferred - Federal                                               -                   1,200
                                                              ----------------    ----------------
     Income tax provision                                      $      -             $     1,200
                                                              ================    ================
</TABLE>


     A  reconciliation  of the  consolidated  income tax provision to the amount
     expected using the U.S. Federal statutory rate follows:


<TABLE>

                                                                     1999                1998
                                                              ----------------    ----------------
     <S>                                                       <C>                  <C>
         Expected amount using
             U.S. Federal statutory rate                       $      -             $         -
         Non-deductible expenses                                      -                       -
         Depreciation and bad debts allowance                         -                    1,200
                                                              ----------------    ----------------
         Effective tax                                         $      -             $      1,200
                                                              ================    ================
</TABLE>


     Deferred tax assets  (liabilities)  consisted of the following at March 31,
     1999 and 1998:

<TABLE>

                                                                     1999                1998
                                                              ----------------    ----------------
<S>                                                            <C>                        <C>
     Deferred tax assets
        Bad debt allowance                                     $    11,900                700
        Stock options                                               58,800                  -
        Net operating loss carryforwards                           746,100             10,100
                                                              ----------------    ----------------
                                                                   816,800             10,800
     Deferred tax liability
        Property and equipment                                        (500)              (300)
                                                              ----------------    ----------------
                                                                   816,300             10,500
     Valuation allowance                                          (816,300)           (10,500)
                                                              ----------------    ----------------
                                                               $         -         $        -
                                                              ================    ================

</TABLE>

        As of March 31,  1999,  the  Company has  domestic  net  operating  loss
        carryforwards of approximately  $646,000 and Canadian net operating loss
        carryforwards of approximately  $1,212,200.  The domestic  carryforwards
        begin to expire in fiscal year 2012. The Canadian carryforwards begin to
        expire in fiscal year 2000.  Deferred  tax assets have been reduced by a
        valuation allowance because of uncertainties as to future recognition of
        taxable income to assure realization.


                                                                              19
--------------------------------------------------------------------------------

<PAGE>


                                                                UBARTER.COM INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------


Note 13 - Income (Loss) Per Share

     Following is a  reconciliation  of the  numerators of the basic and diluted
     income (loss) per share for the years ended March 31, 1999 and 1998:

<TABLE>

                                                                              1999                1998
                                                                        ----------------    ----------------
<S>                                                                     <C>                  <C>
      Net income (loss) available to common stockholders                $    (798,000)       $       32,500
                                                                        ================    ================
      Weighted average shares                                               5,521,583             2,632,424
      Effect of dilutive securities:
          Options                                                                   -                     -
          Warrants                                                                  -               317,518
                                                                        ----------------    ----------------
                                                                            5,521,583             2,949,942
                                                                        ================    ================
      Basic income (loss) per share (based on weighted
          average shares)                                               $        (.14)                  .01
                                                                        ================    ================
</TABLE>


     1,028,000  options and 800,000  warrants to purchase shares of common stock
     were  excluded from the  computation  in 1999 because their effect would be
     anti-dilutive.


Note 14 - Geographic Segment Information


<TABLE>
                                                                              1999                1998
                                                                        ----------------    ----------------
<S>                                                                     <C>                  <C>
    Assets
        U.S. operations                                                 $      700,700       $     525,100
        Canadian subsidiary                                                  3,689,000                   -
                                                                        ----------------    ----------------
                                                                        $    4,389,700       $     525,100
                                                                        ================    ================
</TABLE>


Note 15 - Revenue

     The following  table  summarizes  the cash and trade dollars  components of
     revenue for the years ended March 31, 1999 and 1998:

<TABLE>

                                                                              1999                1998
                                                                        ----------------    ----------------
<S>                                                                            <C>                 <C>
    Trade                                                               $      263,900             279,100
    Cash                                                                       240,600             307,000
                                                                        ----------------    ----------------
                                                                        $      504,500         $   586,100
                                                                        ================    ================
</TABLE>


                                                                              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.

                                      UBARTER.COM INC.
                                      (Registrant)

                                      By: /s/ Steven M. White
                                          ------------------------------------
                                          Steven M. White
                                          President and Chief Executive Officer











<PAGE>