UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(Mark One)

[x]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 or 15 (d)  OF  THE  SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended - September 30, 1998

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ___________________________to____________________

                        Commission File Number: 000-24929

                         PLAYSTAR WYOMING HOLDING CORP.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


            Antigua                                       52-209-8787
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

 The Dollar Building, Top Floor, Nevis Street, St. John's, Antigua, West Indies
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (268) 562-0075
                           ---------------------------
                           (Issuer's telephone number)


               ---------------------------------------------------
               (Former name, former address and former fiscal year
                          if changed since last report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
12, 13 or 15 (d) of the  Exchange Act during the past 12 months (or 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 [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of October 26, 1998: 28,592,644 ordinary shares, $ .01 par value.

Transitional Small Business Disclosure Format (check one) Yes [ ] No [X]


<PAGE>

                                   FORM 10-QSB

                         PLAYSTAR WYOMING HOLDING CORP.
                               TABLE OF CONTENTS
                                                                            PAGE


PART I.      Financial Information

  Item 1     Financial Statements

             Unaudited Consolidated Balance Sheet as of September 30, 1998
             and June 30, 1998.................................................3

             Unaudited Consolidated  Statements of Operations for the three
             months ended September 30, 1998 and September 30, 1997 and for
             the period from inception
             (October 3, 1996) to September 30, 1998...........................4

             Unaudited Consolidated  Statements of Shareholders' Equity for
             the three months ended September 30, 1998 and for the period
             from inception (October 3, 1996) to June 30, 1998.................5

             Unaudited Consolidated  Statements of Cash Flows for the three
             months ended September 30, 1998 and September 30, 1997 and for
             the period from inception (October 3, 1996) to
             September 30, 1998................................................9

             Notes to Consolidated Financial Statements.......................11

  Item 2       Management's Discussion and Analysis
             or Plan of Operation.............................................14

PART II.     Other Information................................................18

  Item 2     Changes in Securities
  Item 6     Exhibits and Reports on Form 8-K

Signatures   .................................................................19


<PAGE>
                         PLAYSTAR WYOMING HOLDING CORP.
                (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                          (A Development Stage Company)
                           Consolidated Balance Sheets


                                     ASSETS
<TABLE>
<CAPTION>
                                                                                  September 30,       June 30,
                                                                                      1998             1998
                                                                                   (Unaudited)      (Audited)
                                                                                   -----------    -----------
<S>                                                                                <C>            <C>        
Current assets:
        Cash and cash equivalents                                                  $ 1,634,016    $   182,219
        Subscriptions receivable                                                         1,350         21,350
        Prepaid expenses and other current assets                                      157,900        150,922
                                                                                   -----------    -----------
                    Total current assets                                             1,793,266        354,491

        Property and equipment, net                                                    294,911        242,410

        Deferred offering costs                                                             --          6,795

        Security deposits                                                               71,009         75,000
                                                                                   -----------    -----------
                                                                                   $ 2,159,186    $   678,696
                                                                                   -----------    -----------

                      LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:
        Accounts payable - affiliate - Dreamplay Research
              Corp                                                                 $    58,955    $    53,702
        Accrued expenses and other current liabilities                                 155,080        264,374
                                                                                   -----------    -----------
                    Total current liabilities                                          214,035        318,076

Shareholders' equity
        Preferred stock, $.0001 par value:
              Authorized - 1,000,000 shares; none
              issued or outstanding at September 30, 1998
              and June 30, 1998                                                             --             --
        Common stock, $.0001 par value:
              Authorized - 50,000,000 shares Issued and outstanding
              - 28,592,644 shares at September 30, 1998 and 
              19,661,274 shares at June 30, 1998                                         2,859          1,966
        Additional paid-in capital                                                   5,567,374      3,448,895
        Deficit accumulated in the development stage                                (3,625,082)    (3,090,241)
                                                                                   -----------    -----------
                    Total shareholders' equity                                       1,945,151        360,620
                                                                                   -----------    -----------
                                                                                   $ 2,159,186    $   678,696
                                                                                   ===========    ===========
</TABLE>

                                       3
<PAGE>

                                 PLAYSTAR WYOMING HOLDING CORP.
                        (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                                 (A Development Stage Company)
                             Consolidated Statements of Operations
                                          (Unaudited)
<TABLE>
<CAPTION>

                                                                                   Period from
                                                                                   October 3,
                                                                                       1996
                                                   Three Months   Three Months     (Inception)
                                                      Ended          Ended             to
                                                  September 30,   September 30,    September 30,
                                                      1998            1997             1998
                                                  ------------    ------------    ------------
                                                                    (Restated)      (Restated)
                                                                     (Note 6)        (Note 6)
<S>                                                     <C>              <C>          <C>      
Revenue:
        Casino testing                             $      3,068    $         --    $      3,068
        Interest income                                  16,468             271          27,539
                                                   ------------    ------------    ------------
                                                         19,536             271          30,607

Expenses:
        Development costs                               326,622          92,596       2,110,572
        Credit issued against prior development
              costs                                          --        (171,489)       (171,489)
        Professional fees                               108,798          17,734         751,862
        Options granted as employee compensation         70,225              --         752,725
        General and administrative                       28,394           6,392         154,801
        Bank charges and processing fees                  4,169              --           4,169
        Depreciation and amortization                    16,169           2,593          49,593
        Incorporation costs                                  --              --           3,456
                                                   ------------    ------------    ------------
                    Total expenses                      554,377         (52,174)      3,655,689
                                                   ------------    ------------    ------------

        Net income  ( loss)                        $   (534,841)   $     52,445    $ (3,625,082)

        Basic loss per share                       $       (.02)   $        .00

        Weighted average number of shares            23,426,752      15,812,500
                                                   ============    ============
</TABLE>

                                       4
<PAGE>
                                        PLAYSTAR WYOMING HOLDING CORP.
                               (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                                        (A Development Stage Company)
                                          Consolidated Statements of
                               Shareholders' Equity For the Period from October
                                     3, 1996 (Inception) to June 30, 1998
                                and the Three Months ended September 30, 1998
                                                 (Unaudited)

<TABLE>
<CAPTION>
                                                                                    Deficit
                                                                                  Accumulated
                                                Common Stock          Additional     in the         Total
                                         -------------------------     Paid-in    Development   Shareholders'
                                            Shares       Amount        Capital        Stage         Equity
                                         -----------   -----------   -----------   -----------    -----------

<S>                                     <C>            <C>           <C>           <C>            <C>        
October 3, 1996 (inception)                       --   $        --   $        --   $        --    $        --

Common stock issued in exchange
   for all of the issued and
   outstanding  shares of Playstar
   Limited in October 1996 (at $.0001
   per share)                             12,000,000         1,200            --            --          1,200

Options granted to employees
   and consultants for
   development costs and
   services                                        --            --     1,143,500            --      1,143,500

Issuance of common stock in
   October 1996 and January 1997
   for development  costs based
   on fair market value of
   services performed                      1,750,000           175       174,825            --        175,000

Issuance of common stock
   in November 1996 at $.40
   per share in a private
   placement offering, less
   costs of $163,015                       2,062,500           206       661,779            --        661,985

Net loss, June 30, 1997
   (restated)                                     --            --            --    (1,926,732)    (1,926,732)
                                         -----------   -----------   -----------   -----------    -----------

Balance at June 30, 1997
   (restated) (carried forward)           15,812,500         1,581     1,980,104    (1,926,732)        54,953
                                         -----------   -----------   -----------   -----------    -----------
</TABLE>
                                       5

<PAGE>

<TABLE>
<CAPTION>

                                           PLAYSTAR WYOMING HOLDING CORP.
                                  (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                                            (A Development Stage Company)
                                   Consolidated Statements of Shareholders' Equity
                                   (continued) For the Period from October 3, 1996
                                            (Inception) to June 30, 1998
                                      and the Quarter ended September 30, 1998
                                                     (Unaudited)

                                                                                        Deficit
                                                                                      Accumulated
                                                  Common Stock          Additional       in the          Total
                                            -------------------------     Paid-in      Development    Shareholders'
                                               Shares        Amount       Capital        Stage           Equity
                                            -----------   -----------   -----------    -----------    -----------
<S>                                          <C>          <C>           <C>            <C>            <C>        
Balance at June 30, 1997
   (restated) (brought forward)              15,812,500   $     1,581   $ 1,980,104    $(1,926,732)   $    54,953

Issuance of common stock in
   November 1997 in connection with
   a private placement offering at
   $.40 per share, less related
   costs of $50,000                           1,250,000           125       449,875             --        450,000

Issuance of common stock in
   December  1997, in a private
   placement  offering at $.50 per
   share, less related costs of $36,211         724,274            72       325,854             --        325,926

Issuance of common stock in January
   1998, in a private placement
   offering at $.50 per share, less
   related costs of $14,250                     285,000            29       128,221             --        128,250

Issuance of common stock in January
   1998, as a fee in connection with the
   November 1997 private placement
   offering (fair market value $.85 per
   share $212,500)                              250,000            25           (25)            --             --

Options granted during December 1997
   through April 1998 for the purchase of
   315,000 common shares to consultants
   as compensation for development costs,
   less unearned portion ($173,409)                  --            --        51,530             --         51,530
                                            -----------   -----------   -----------    -----------    -----------

Totals carried forward                       18,321,774   $     1,832   $ 2,935,559    $(1,926,732)   $ 1,010,659
                                            -----------   -----------   -----------    -----------    -----------
</TABLE>

                                                         6
<PAGE>
<TABLE>
<CAPTION>

                                             PLAYSTAR WYOMING HOLDING CORP.
                                    (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                                              (A Development Stage Company)
                                     Consolidated Statements of Shareholders' Equity
                                     (continued) For the Period from October 3, 1996
                                              (Inception) to June 30, 1998
                                        and the Quarter ended September 30, 1998
                                                       (Unaudited)

                                                                                              Deficit
                                                                                            Accumulated
                                                        Common Stock          Additional      in the          Total
                                                  -------------------------    Paid-in      Development   Shareholders'
                                                     Shares       Amount       Capital         Stage         Equity
                                                  -----------   -----------   -----------   -----------   -------------

<S>                                                <C>          <C>           <C>           <C>            <C>        
Totals brought forward                             18,321,774   $     1,832   $ 2,935,559   $(1,926,732)   $ 1,010,659

Issuance of common stock in
   January 1998, in connection
   with exercise of stock options
   at $.05 per share                                   30,000             3         1,497            --          1,500

Issuance of common stock in
   February 1998, in connection
   with exercise of stock options
   at $.05 per share                                   27,000             2         1,348            --          1,350

Issuance of common stock in May
   1998, at $.50 per share, less
   costs of $15,936                                   437,000            44       202,520            --        202,564

Issuance of common stock in May
   1998, at $.40 per share, less
   costs of $14,441                                   445,500            45       163,714            --        163,759

Issuance of common stock in May
   1998, in connection with exercise
   of stock options, at $.05 per
   share                                              400,000            40        19,960            --         20,000

Current year amortization of cost of
   options granted in prior periods                        --            --        45,617            --         45,617

Options granted in October 1998 to
   consultants for the purchase of 300,000
   shares of common stock for services provided
   through June 30, 1998                                   --            --        78,680            --         78,680

Net loss, June 30, 1998                                    --            --            --    (1,163,509)    (1,163,509)
                                                  -----------   -----------   -----------   -----------    -----------
Balance at June 30, 1998
   (carried forward)                               19,661,274   $     1,966   $ 3,448,895   $(3,090,241)   $   360,620
                                                  -----------   -----------   -----------   -----------    -----------
</TABLE>

                                                          7
<PAGE>
<TABLE>
<CAPTION>

                                            PLAYSTAR WYOMING HOLDING CORP.
                                   (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                                            (A Development Stage Company)
                                   Consolidated Statements of Shareholders' Equity
                                   (concluded) For the Period from October 3, 1996
                                             (Inception) to June 30, 1998
                                       and the Quarter ended September 30, 1998
                                                     (Unaudited)

                                                                                           Deficit
                                                                                         Accumulated
                                                      Common Stock          Additional      in the         Total
                                               -------------------------     Paid-in      Development  Shareholders'
                                                  Shares        Amount       Capital         Stage         Equity
                                               -----------   -----------   -----------    -----------  -------------
<S>                                             <C>          <C>           <C>            <C>            <C>        
Balance at June 30, 1998
   (brought forward)                            19,661,274   $     1,966   $ 3,448,895    $(3,090,241)   $   360,620

Issuance of common stock in July
   1998 in a private placement
   offering at $.50 per share, less
   related costs of $750                            30,000             3        14,247             --         14,250

Issuance of common stock in August
   1998 in a private placement
   offering at $.40 per share, less
   related costs of $100                             5,000             1         1,899             --          1,900

Issuance of common stock in August
   and September 1998, in a private
   placement offering at $.2580645
   per share, less related costs of
   $144,077                                      7,967,000           796     1,911,127             --      1,911,923

Issuance of common stock in September 1998,
   as fees in respect of private
   placement  offerings in May, July, August
   and September 1998 (fair market value
   $.39 per share $362,454)                        929,370            93           (93)            --             --

Current three months amortization of cost
   of options granted in prior periods-                 --       191,299            --             --        191,299

Net loss September 30, 1998                             --            --            --       (534,841)      (534,841)
                                               -----------   -----------   -----------    -----------    -----------

Balance at September 30, 1998                   28,592,644   $     2,859   $ 5,567,374    $(3,625,082)   $ 1,945,151
                                               ===========   ===========   ===========    ===========    ===========
</TABLE>

                                       8

<PAGE>
<TABLE>
<CAPTION>

                                  PLAYSTAR WYOMING HOLDING CORP.
                         (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                                  (A Development Stage Company)
                              Consolidated Statements of Cash Flows
                                           (Unaudited)

                                                                                    Period from
                                                                                    October 3,
                                                                                       1996
                                                      Three Months   Three Months   (Inception)
                                                         Ended          Ended           to
                                                      September 30,  September 30, September 30,
                                                          1998          1997           1998
                                                      -------------  -----------    -----------
                                                                     (Restated)     (Restated)
                                                                      (Note 6)       (Note 6)
<S>                                                   <C>            <C>            <C>         
Cash flows from operating activities:
     Income (Net loss)                                $  (534,841)   $    52,445    $(3,625,082)
     Adjustments to reconcile net loss to
        net cash used in operating activities:
            Depreciation and amortization                  16,169          2,593         49,593
            Development costs and professional fees
               paid through the issuance of common
               stock and granting of stock options        121,074         11,310        932,901
            Options granted as employee
               compensation                                70,225             --        752,725
            Change in assets and liabilities:
               Prepaid expenses and other
                   current assets                          (6,978)         1,013       (157,900)
               Accounts payable - affiliate -
                   Dreamplay Research Corp.                 5,253        (57,554)        58,955
               Accrued expenses                          (109,294)       (43,495)       155,080
                                                      -----------    -----------    -----------
        Net cash used in operating activities            (438,392)       (33,688)    (1,833,728)
                                                      -----------    -----------    -----------

Cash flows from investing activities:
     Return (Payment) of security deposits                  3,991             --        (71,009)
     Purchase of property and equipment                   (68,670)       (41,489)      (344,504)
                                                      -----------    -----------    -----------
        Cash used in investing activities                 (64,679)       (41,489)      (415,513)
                                                      -----------    -----------    -----------

Totals carried forward                                $  (503,071)   $   (75,177)   $(2,249,241)
                                                      -----------    -----------    -----------
</TABLE>

                                       9
<PAGE>
<TABLE>
<CAPTION>

                                                   PLAYSTAR WYOMING HOLDING CORP.
                                          (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                                                    (A Development Stage Company)
                                                Consolidated Statements of Cash Flows
                                                             (Unaudited)

                                                                                        Period from
                                                                                        October 3,
                                                                                           1996
                                                          Three Months   Three Months  (Inception)
                                                             Ended          Ended          to
                                                          September 30,  September 30, September 30,
                                                             1998           1997           1998
                                                          -----------    -----------    -----------
                                                                          (Restated)    (Restated)
                                                                          (Note 11)      (Note 11)

<S>                                                       <C>            <C>            <C>         
Totals brought forward                                    $  (503,071)   $   (75,177)   $(2,249,241)

Cash flows from financing activities:
     Net proceeds from issuance of common
        shares                                              1,928,073             --      3,861,757
     Decrease in deferred offering costs                        6,795             --             --
     Received on exercise of stock options                     20,000             --         21,500
                                                          -----------    -----------    -----------
        Net cash provided by financing activities           1,954,868             --      3,883,257
                                                          -----------    -----------    -----------

Net increase (decrease) in cash and cash
     equivalents                                            1,451,797        (75,177)     1,634,016

Cash and cash equivalents, beginning of
     period                                                   182,219        109,138             --
                                                          -----------    -----------    -----------
Cash and cash equivalents, end of period                  $ 1,634,016    $    33,961    $ 1,634,016
                                                          ===========    ===========    ===========

              Supplemental Schedule of Non-Cash Investing and Financing Activities

Common stock issued in connection
     with raising of capital                              $   362,464    $        --    $   574,964
                                                          ===========    ===========    ===========

Receivable from shareholders in connection
     with exercise of stock options                       $        --    $        --    $     1,350
                                                          ===========    ===========    ===========
</TABLE>

                                       10
<PAGE>


                         PLAYSTAR WYOMING HOLDING CORP.
                (FORMERLY PLAYSTAR CORPORATION) AND SUBSIDIARIES
                          (A Development Stage Company)
              Notes to Unaudited Consolidated Financial Statements


Note 1.  Basis of Presentation

         The financial  statements  included  herein are unaudited and have been
prepared  in  accordance  with  generally  accepted  accounting  principals  for
financial reporting and Securities and Exchange Commission regulations.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted pursuant to such rules and  regulations.  In the opinion of
management the financial  statements  reflect all  adjustments  (of a normal and
recurring nature) which are necessary to present fairly the financial  position,
results of operations and cash flows for the interim  periods.  These  financial
statements  should be read in  conjunction  with the Annual  Report of  PlayStar
Wyoming  Holding  Corp.  on Form  10-KSB for the year ended June 30,  1998.  The
results  for the  three  months  ended  September  30,1998  are not  necessarily
indicative  of the  results  that may be  expected  for the year ending June 30,
1999.

Note 2.  Nature of Business and Basis of Consolidation

         The consolidated  financial statements include the accounts of PlayStar
Wyoming Holding Corporation ("PlayStar Wyoming") (formerly PlayStar Corporation)
and  its  wholly  owned   subsidiaries   PlayStar   Limited  (a  Jersey   Island
corporation),  Players  Ltd. (an Antiguan  corporation)  and Antigua  Casino and
Sports Book Limited (an Antigua corporation)  (collectively "the Company").  All
intercompany accounts and transactions have been eliminated in consolidation.

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
Income," which is effective for fiscal years  beginning after December 15, 1997.
This Statement  establishes standards for reporting and display of comprehensive
income and its  components in financial  statements.  The Statement is effective
for PlayStar's  financial  statements  commencing the year ending June 30, 1999.
The adoption of this  Statement  will not have a material  effect on  PlayStar's
financial statements.

         In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related  Information,"  which is effective for fiscal years
beginning after December 15, 1997. This Statement  establishes standards for the
manner in which a public business  enterprise reports certain  information about
operating segments and discloses enterprise-wide  information about its products
and services,  activities  in different  geographic  areas,  and its reliance on
major customers.  The Statement is effective for PlayStar's financial statements
commencing  the year ending June 30, 1999.  The adoption of this  Statement will
not have a material effect on PlayStar's financial statements.

                                       11

<PAGE>

         In June 1998, the FASB issued SFAS No. 133,  "Accounting for Derivative
Instruments  and  Hedging  Activities,"  which is  effective  for  fiscal  years
beginning after June 15, 1999. This statement establishes standards that require
that all  derivative  instruments be recorded on the balance sheet at their fair
value.  This  statement  is  effective  for  PlayStar's   financial   statements
commencing  the year ending June 30, 2000.  The adoption of this  statement will
not have a material effect on PlayStar's financial statements.

         The Company has been in the development  stage since its  incorporation
on October 3, 1996. Through its subsidiaries the Company,  designs, develops and
operates, an on-line gaming service operating interactive,  software-based games
of chance, accessible worldwide through the Internet.

         On June 30, 1998,  effective  September  4, 1998,  pursuant to a Merger
Agreement,  and an Application for Certificate of Transfer,  the Company's board
of directors and holders of more than  two-thirds of the  outstanding  shares of
its common stock approved the reorganization of Playstar Corporation pursuant to
which Playstar  Corporation  was merged with and into Playstar  Wyoming  Holding
Corp., a newly formed Wyoming corporation which became the surviving entity (the
"Merger"). Subsequently, pursuant to a Wyoming statutory continuation procedure,
Playstar  Wyoming  became  an  Antigua  corporation  ("Playstar  Antigua").   In
accordance  with the terms of the  merger,  each  outstanding  share of Playstar
Corporation's  common stock was  automatically  converted  into one  outstanding
share of Playstar Wyoming common stock and subsequently, in  connection with the
statutory continuation procedure referred to above, automatically converted into
one ordinary share, par value $.0001 of Playstar Antigua.

         Since the effective time of the  reorganization,  PlayStar  Wyoming has
continued to conduct the business  previously  carried on by PlayStar  Delaware.
Except for PlayStar  Wyoming's new domicile,  the activities of PlayStar Wyoming
are identical to that of PlayStar  Delaware  prior to the effective  time of the
reorganization.  Accordingly,  references  in the  discussion of the business of
PlayStar  Wyoming  include  the  operations  of PlayStar  Wyoming  and  PlayStar
Delaware.

Note 3.  Computation of Net Loss per Common Share

          The Company adopted SFAS No. 128, "Earnings per Share". This statement
requires that the Company report basic and diluted earnings (loss) per share for
all  periods  reported.  Basic net  income  (loss)  per share is  calculated  by
dividing  net income  (loss) by the  weighted  average  number of common  shares
outstanding  for the period.  Diluted net income (loss) per share is computed by
dividing  net income  (loss) by the  weighted  average  number of common  shares
outstanding  for the period,  adjusted for the  dilutive  effect of common stock
equivalents,  consisting of dilutive common stock options and warrants using the
treasury stock method.

          For all periods  presented,  common stock  options are not included in
the  computation as they would be  anti-dilutive.  In the event that the Company
was to  report  net  income  in  future  periods,  these  options  and  warrants
aggregating  10,648,000  at September  30, 1998 could have a dilutive  effect on
future earnings per share calculations in those periods.

                                        12
<PAGE>

Note 4.  Shareholders' Equity

         Common Stock

         On October 9, 1996, the Company issued  12,000,000 shares of its common
stock to the  shareholders of Playstar Limited in exchange for all of the issued
and outstanding shares of Playstar Limited.

         On October 22, 1996, the Company issued  1,750,000 shares of its common
stock.  These shares were issued in consideration  for services  rendered to the
Company with an estimated  fair value  aggregating  $175,000 or $0.10 per share.
This sale was exempt from  registration  in reliance  upon Rule 504  promulgated
under the Securities Act of 1933 ("Securities Act") ("Rule 504"). On January 21,
1997, the Company and one of the  purchasers  agreed to rescind the purchase  of
962,500 of these shares which were  subsequently  re-issued to another  party in
January 1997 in  consideration  for services valued as above.  The shares issued
are exempt from  registration  in reliance upon Rule 504  promulgated  under the
Securities Act.

         On October 25,  1996,  the Company  commenced  an offering of 2,062,500
shares of its common  stock.  This offering was fully  subscribed  and closed on
November 29, 1996.  These shares were issued at a price of $0.40 per share,  for
gross offering  proceeds of $825,000.  The Company paid finders fees aggregating
$163,015.  This sale was exempt  from  registration  in  reliance  upon Rule 504
promulgated under the Securities Act.

         In November 1997, the Company completed an offering of 1,250,000 shares
of its common stock at a price of $.40 per share, resulting in gross proceeds of
$500,000. The shares were issued in reliance upon an exemption from registration
pursuant to Section 4(2) of the  Securities  Act and  Regulation  D  promulgated
under the  Securities  Act.  Finders fees  aggregating  $50,000 were paid by the
Company. In addition,  in January 1998, additional 250,000 shares were issued to
finders as compensation  for their assistance in connection with the sale of the
1,250,000 shares.

         In November 1997, the Company commenced an offering of shares of common
stock under Regulation S promulgated under the Securities Act. In December 1997,
the Company sold  724,274  shares of common stock at a price of $0.50 per share,
resulting  in gross  proceeds of  $362,137.  The Company  paid  finders  fees of
$36,211  in  connection  with such sale.  In  January  1998,  the  Company  sold
additional  285,000  shares  of  common  stock  at a price of  $0.50  per  share
resulting  in gross  proceeds of  $142,500.  The Company  paid  finders  fees of
$14,250 in connection with such sale.

         In May 1998,  the Company  sold  437,000  shares of its common stock at
$0.50 per share and  445,500  shares of its  common  stock at $0.40 per share in
reliance  upon  exemptions  from  registration  pursuant to  Regulation S of the
Securities Act. Costs incurred in connection with each were $15,936 and $14,441,
respectively.

         During July,  August and September  1998,  through a private  placement
offering,  the Company  issued  8,002,000  shares of its common  stock at prices

                                       13
<PAGE>

ranging  from  $.2580645  to $.50 per share,  realizing  total net  proceeds  of
approximately  $1,939,000.  Additionally,  the Company granted 929,370 shares as
issuance  costs and  6,500,000 of warrants to purchase  shares of the  Company's
common  stock.  These  warrants  were granted to  investors,  in addition to the
shares they  purchased,  and as payment for  issuance  costs.  The  warrants are
exercisable as follows: 5,300,000 warrants at $.80 per share, 1,000,000 warrants
at $1.25 per share, 100,000 warrants at $1.00 per share, and 100,000 warrants at
$.50 per share. All of the warrants expire in May 2000.

Note 5.  Possible Legislation in the United States Congress

         On July 23, 1998, the Senate passed an  appropriations  bill containing
an amendment by Senator John Kyl of Arizona,  which would prohibit gaming on the
Internet in the United States. The proposed prohibition was not enacted into law
in 1998, but it or a similar bill may be reintroduced  shortly.  Several similar
bills  were also  introduced  in the House of  Representatives  in the summer of
1998, and House Internet gaming  legislation  may be  reintroduced  this year as
well.

         If legislation  prohibiting gaming on the Internet is enacted into law,
that  legislation  could have a significant  effect on Playstar's  online gaming
operations.  If a law prohibiting  Internet gaming passes,  the Company's gaming
subsidiaries  (Limited and Casino)  might be forced to cease all  marketing  and
promotional  activities in the United States to ensure that no  solicitation  of
United States  citizens  occurs.  If such  legislation  prohibits  United States
citizens  from  gaming on the  Internet,  the  Company may be expected to lose a
significant portion of its online gaming customers.

Note 6.  Restatement of 1997 Financial Information

         The financial statements as of June 30, 1997 and for the period October
3, 1996  (inception)  to June 30,  1997 have been  restated  to comply  with the
requirements of APB No. 25 and SFAS 123 as disclosed in Note 2.

         The effect of the  correction  with  respect to the  recording of stock
options  granted  to  employees  and  consultants  during the period has been to
increase  development  costs charged to operations by $461,000,  and to increase
employee compensation charged to operations by $682,500.

         In total,  the effect of the restatement has been to charge  operations
with $1,143,500 ($.08 per share).


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  discussion contains  forward-looking  statements and projections.
Because these  forward-looking  statements and projections are based on a number
of assumptions and are subject to significant  uncertainties and  contingencies,
many of which are beyond the PlayStar's control, there is no assurance that they
will be realized, and actual results may vary significantly from those shown.

                                       14
<PAGE>

PLAYSTAR/PLAYSTAR WYOMING

         PlayStar is a holding company who, through its  subsidiaries,  PlayStar
Limited and Antigua Casino,  operates,  promotes and  commercializes  an on-line
gaming service, which offers interactive, software-based games of chance.

         Antigua  Casino  conducts  PlayStar's  Internet  gaming  business,  and
PlayStar Limited licenses gaming  technology to Antigua Casino's Internet gaming
business.  For the period from inception on October 3, 1996 until  September 30,
1998,  the cumulative  earned  interest and other income of PlayStar was $30,607
and its accumulated deficit was $3,625,082.

         During 1996 and 1997,  PlayStar raised an aggregate of $825,000 in cash
through  three private  placements  completed  pursuant to Rule 504  promulgated
under the  Securities  Act. In November and  December  1997,  and January  1998,
PlayStar  raised  an  additional   $1,004,637  through  two  additional  private
placements  completed  pursuant  to  Section  4(2)  of the  Securities  Act  and
Regulations  D and S  promulgated  thereunder.  In May,  July and  August  1998,
PlayStar raised an additional  $2,469,700  through additional private placements
completed  pursuant to Regulation S promulgated  under the Securities Act. These
financings have been sufficient to satisfy  PlayStar's cash  requirements.  From
these proceeds,  Playstar and its subsidiaries paid approximately $1,000,000 for
products  and  services  provided by Dreamplay  and  approximately  $600,000 for
legal,   accounting,   public  relations  and  administrative  services  through
September  30,  1998.  After  the  above  financings,   PlayStar  had  available
approximately $1,600,000 in working capital. Of this amount, PlayStar intends to
pay for the majority of its advertising,  marketing and promotional efforts on a
performance-related commission and/or profit sharing basis.

         Management believes that PlayStar will have sufficient funds to conduct
its operations for at least through June 30, 1999.

PLAYSTAR LIMITED

         PlayStar  Limited's  efforts are  centered  on the  purchase of on-line
gaming and  financial  transaction  processing  software  incorporated  into the
creation of an electronic casino operating over the Internet.

         Effective April 1, 1998,  PlayStar Limited and Dreamplay Research Corp.
entered  into an  agreement  in which  PlayStar  Limited  retained  Dreamplay to
provide  PlayStar  Limited's  gaming  software.  Pursuant  to the  terms of this
agreement,  Dreamplay assigned to PlayStar Limited all right, title and interest
in the software  designed and developed for PlayStar  Limited,  under a previous
agreement for services.

         PlayStar Limited  licenses its gaming  technology to Antigua Casino who
then operates the electronic casino.

                                       15
<PAGE>

ANTIGUA CASINO

         Antigua  Casino's  Articles  of  Incorporation  enable it to operate an
Internet-based  casino.  Using the technology  developed by PlayStar Limited and
licensed to it, Antigua  Casino's casino  service,  at  www.antigua.org,  allows
patrons  to play  interactive  games in real time  either  in "free"  mode or in
"live" mode. In "live" mode,  patrons wager with chips acquired using electronic
money or "e-cash" that was purchased  through credit cards,  wire-transfers  and
money orders. Antigua Casino initially offers a selection of casino-style games,
including,  but not limited to  blackjack,  draw poker,  baccarat,  roulette and
three different slot machines.

         In  December  1997,  PlayStar  Limited,  on behalf of  Antigua  Casino,
applied to the government of Antigua for an electronic casino gaming license. On
January 28, 1998, the Antigua  government  granted  approval for the issuance of
the license to Antigua  Casino.  Antigua Casino began  operations of this casino
immediately  following the consummation of the  reorganization  on September 14,
1998.

         During the balance of the quarter  Antigua Casino  continued to operate
in development mode under conditions of live play and real money wagering rather
than only the free play of its earlier testing.

         This  focus was  carried  forward  into the last  quarter  of 1998 with
ongoing  analysis of the performance  and the  functionality  of the casino.  In
addition,  customer  service systems and procedures were modified to reflect the
reality  of being  live on line.  Limited  marketing  activities  resulted  in a
gradual build-up of the client and revenue base.

         With credit cards proving to be the means  whereby  almost 100% of this
type of play is conducted,  an important  factor of operations is the ability to
ensure adequate facilitation  capability,  not only from the standpoint of costs
but also from the degree of fraud  protection  provided.  This  control  enables
charge backs to be held to a minimum.

         Experience,  during the last  quarter of 1998,  indicated  the need for
substantial  improvement  in this area.  Accordingly,  management  instituted  a
search for an  alternative  solution to that being carried out through  Bermuda.
With  concern  being   expressed   over  possible   changes  in  North  American
legislation, it was felt that such a solution would be required to be offshore.

         Analysis of the market  indicated  that this was an area ill served and
suggested that a solution would provide the Company,  not only with its internal
needs,  but also offer the  considerable  possibility  of taking it into  highly
profitable  areas  of  business  activity  outside  the  sphere  of  its  casino
operations.

          As 1998 concluded, management found in Cyberstation Limited, St Kitts,
not only the  possibility  of meeting  these needs  through the licensing of its
ultra  secure   encryption   technology   and   sophisticated   data   reporting
capabilities, but also access to excellent sources of software design to further
enhance  the  Company's  Java  based  casino  games.   It  was  also  felt  that
Cyberstation would provide the Company with the ability to introduce substantial
savings in the cost infrastructure of its operations.

                                       16
<PAGE>

          Accordingly,  with negotiations underway for these enhancements to its
direction,  the Company felt that its future would be best served by  concluding
its  relationship  with  Dreamplay  Research and this contract was terminated in
late December.

                                       17
<PAGE>


PART II.  OTHER INFORMATION


Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

             A.      Exhibits

                     Exhibit          Description
                     -------          -----------

                     27               Financial Data Schedule

             B.      Reports on Form 8-K

                  On September 28, 1998, the company filed a Report on >From 8-K
to disclose  the  resignation  of Fruitman  Kates,  Chartered  Accountants,  its
independent  accountants and the engagement of new certified public accountants,
Mahoney Cohen & Company,  CPA, P.C. to audit its financial  statements beginning
with the fiscal year ending June 30, 1998.

                                       18

<PAGE>


                                   SIGNATURES


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


                                           PLAYSTAR WYOMING HOLDING CORP.


                                           By: /s/ WILLIAM F.E. TUCKER
                                             -----------------------------------
                                                   William F.E. Tucker
                                                   President

                                       19