---

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

FORM 10-KSB

(Mark One)x ANNUAL REPORT UNDER SECTION 13
  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended June 30, 2005

 ̈ TRANSITION REPORT
  UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
  For the transition period from _________ to _________

Commission File Number: 0-29285

ONLINE INNOVATION, INC.(Name of Small Business Issuer in its charter)

|Delaware                        | 52-2058364                
|------------------------------- | --------------------------
|(state or other jurisdiction of | (I.R.S. Employer I.D. No.)
|Incorporation or organization)  |                           

1118 Homer Street, #118, Vancouver, British Columbia V6B
  6L5(Address of principal executive offices)

(604) 669-7564Issuers telephone number

_________________________________________________________________
  Former name, former address, and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act: 
  None

Securities registered pursuant to Section 12(g) of the Act: 
  Common Stock

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

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B is not contained in this form, and no disclosure
  will be contained, to the best of the

---

2

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

The registrant did not earn any revenues in the financial year ended June 30, 2005.

As of September 21, 2005, the aggregate market value of the voting common equity held by non-affiliates of the registrant was $1,462,170 based on the closing trade reported on the NASD Over the Counter Bulletin Board. Shares of common stock by
each officer and director and by each person who owns 5% or more of the outstanding common stock have been excluded from this calculation as such persons may be considered to be affiliated with the registrant.

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Check whether the registrant has 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 ̈
  N/A

APPLICABLE ONLY TO CORPORATE ISSUERS

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

As of September 27, 2005 the registrants outstanding common stock consisted of 20,679,166 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format (Check one):
  YES  ̈ NO x

---

|3                      
|-----------------------
|                       
|                       
|ONLINE INNOVATION, INC.
|                       
|FORM 10KSB             
|TABLE OF CONTENTS      

|Part | Item(s) |                                                                                                                            | Page No.
|---- | ------- | -------------------------------------------------------------------------------------------------------------------------- | --------
|     |         |                                                                                                                            |         
|I    | 1       | Description of
      Business                                                                                              | 4       
|     | 2       | Description of Property                                                                                                    | 18      
|     | 3       | Legal Proceedings                                                                                                          | 18      
|     | 4       | Submission of Matters to a Vote
      of Security Holders                                                                  | 18      
|II   | 5       | Market for Common
      Equity and Related Stockholder Matters                                                             | 19      
|     | 6       | Plan of Operation                                                                                                          | 22      
|     | 7       | Financial Statements                                                                                                       | 27      
|     | 8       | Changes In and Disagreements
      With Accountants on Accounting and Financial Disclosure                                 | 28      
|     | 8A      | Controls and
      Procedures                                                                                              | 28      
|III  | 9       | Directors, Executive Officers,
      Promoters and Control Persons; Compliance with Section16(a) of the Exchange
      Act | 28      
|     | 10      | Executive Compensation                                                                                                     | 31      
|     | 11      | Security Ownership of Certain
      Beneficial Owners and Management                                                       | 32      
|     | 12      | Certain Relationships
      and Related Transactions                                                                       | 33      
|     | 13      | Exhibits and Reports on Form
      8-K                                                                                     | 34      
|     | 14      | Principal Accounting
      Fees and Services                                                                               | 36      
|     |         |                                                                                                                            |         
|     |         |                                                                                                                            |         
|     |         | Signatures                                                                                                                 |         
|     |         | Certifications                                                                                                             |         
|     |         | Exhibits                                                                                                                   |         

---

4

PART I

ITEM 1: DESCRIPTION OF BUSINESS

Business Development

Online Innovation, Inc. (the "Company") is a web asset
development company. The Company has created a website that is designed to
facilitate social interaction between single adults, with an emphasis on
entertainment and matchmaking. The Companys website enables site visitors to
interact socially in a variety of contexts. The Company's flagship website
located on the worldwide web at www.VirtuallyDating.com, provides real time
communication, entertainment and matchmaking between single adults. The target
market for VirtuallyDating is single North American men and women over the age
of 18 that have exhausted the traditional ways of meeting new people.

Since the launch of the Companys website on September 3, 2002,
the Company has worked on developing new content and functionality for the
website and to upgrade existing content and functionality. In addition to
ongoing website development, the Company has focused its energies on securing
equity financing to fund its ongoing operations and to fund planned marketing of
the website. During the fiscal year ended June 30, 2004, the Company also
commenced development of a new web property known as Urban Flirt.

As noted above, the website was launched on September 3, 2002.
The Company is currently offering free 10-day trials and an introductory special
in which users may purchase a 1-year membership for $19.95. This introductory
offer was originally made for a 30 day period but has been extended by the
Company for an indefinite period. The Company intends to continue the
introductory offer until it has been able to carry out marketing activities to
promote the website. After the introductory offer has been completed,
memberships will be available for $10.95 per month, $29.95 for three months,
$49.95 for 6 months and $79.95 for 1 year. As of September 27, 2005, the website
had 80,125 registered profiles (including profiles from people on 10 day
trials). In addition to generating revenue through the sale of memberships, the
Company intends to generate revenue through banner advertising and the sale of
merchandise through the website.

The Company was incorporated on May 7, 1997 pursuant to the
General Corporation Law of the State of Delaware, U.S.A. under the name Micro
Millennium Inc. The Company changed its name from Micro Millennium, Inc., to
Sinaloa Gold Corp. on October 16, 1997 and operated as a mineral exploration and
development company until January of 1999. Early in 1999, the Company decided to
withdraw its interest in its mineral properties and to acquire and develop its
current website development business. Pursuant to an agreement dated April

2, 1999, the Company acquired from Online Innovation, a
non-reporting private unincorporated entity, a 100% interest in all of its
proprietary and intellectual property associated with its business plan and
concepts and its worldwide web site domain name, www.VirtuallyDating.com. As
consideration for the acquisition of the assets of Online Innovation, the
Company issued 400,000 common shares at a deemed value of $0.50 per share to Mr.
Darin Wong, the sole proprietor of Online Innovation. The Company changed its
name from Sinaloa Gold Corp. to Online Innovation, Inc. on April 8, 1999, after
acquiring the assets of Online Innovation as described above. Since the
acquisition the Company has

---

5

developed and continues to develop the property and concepts
acquired from Online Innovation. In addition, it has been forging partnerships
and strategic alliances in the Internet industry and seeking financing to
further its development goals.

Business of the Company

Principal Products and Services

The Company's principal product/service is a website on the
worldwide web (www.VirtuallyDating.com) which Internet users can utilize to
engage in various forms of social interaction with other users. The focus is on
entertainment and matchmaking for single adults. The website is multi-faceted
and allows users to interact socially in a number of different forums, described
in greater detail below. The main webpage, located at www.VirtuallyDating.com,
provides links to the other pages that comprise the site. These pages contain
the various interactive/entertainment functions and services offered by the
Company. In order to utilize the website, visitors are required to become
members. Once an individual becomes a member, he or she can access the various
WebPages created by the Company to interact with other members.

The website offers several ways for members to interact, meet,
and have fun through its many features, while always maintaining privacy and
discretion. While the intention may be for members to find a love connection or
friendship, the sites primary focus is entertainment. The interactive
entertainment features of the site may also lead to or enhance a friendship or
romantic liaison.

The website was launched on September 3, 2002. Since that time
the Company has been maintaining and improving website functionality and
attempting to raise capital for the purpose of marketing the website. Limited
marketing activities have been undertaken with the funds which the Company has
had available. The Company is currently offering free 10-day trials and an
introductory special in which users may purchase a 1-year membership for $19.95.
This introductory offer was originally made for a 30 day period but has been
extended by the Company for an indefinite period. The Company intends to
continue the introductory offer until it has been able to carry out marketing
activities to adequately promote the website. After the introductory offer has
been completed, memberships will be available for $10.95 per month, $29.95 for
three months, $49.95 for 6 months and $79.95 for 1 year.

The Company has incurred expenditures of approximately $41,419
  over the past 2 fiscal years related to the design and development of its web
  properties. Approximately $39,349 was incurred in the fiscal year ended June
  30, 2004 and approximately $2,070 was incurred in the fiscal year ended June
  30, 2005.

Member
  Profiles

Members of the site complete a survey in which they submit
information such as gender, height, geographic location, lifestyle choices,
interests, hopes, dreams and desires. This information provides a personal
profile for each member. Once the member completes the survey, the information
is incorporated into a personal profile and is entered into a database with
other users. Members have the option of personalizing their profile by including
up to

---

6

(3) three photographs. The personal profile is then posted
  in a member profile viewing gallery. All information from the member profiles
  is placed in a searchable database that other members can utilize to find suitable
  companions.

AutoMatch
  Function

The AutoMatch option allows members to match automatically
  with other members who have similar interests. This function allows members
  to create a personal "short list" of member profiles to view and serves as an
  alternative to completing a more time-consuming survey of each member in the
  viewing gallery.

Searching
  Member Profiles

In addition to the AutoMatch function, an advanced search
  feature enables members to search the database for a suitable companion. Members
  engaging in such a search are required to identify the key qualities they are
  seeking in a companion. Utilizing the criteria set out by the member, the search
  engine searches the database and the member is provided with other member profiles
  that meet his/her criteria.

Internal
  Messaging Service

Each member is provided with an internal messaging function
  that operates throughout the website. Privacy is maintained because home and
  office e-mail addresses are not utilized. Once a member selects the profile
  of a person whom he or she wishes to contact, the member can send a personal
  electronic message to that member as a first means of direct communication.
  The recipient can retrieve the message and respond at his or her own discretion.

Chat
  Rooms

Chat rooms are sites where large numbers of members interact through real time messaging. All members participating in a chat room discussion can read messages that are sent to other participants in the room.  Chat rooms provide "chatters" with the
opportunity to discuss common interests and themes. Chat rooms also provide an alternative to the static member profile gallery as a means of meeting other members. For those members who are shy, and for whom connecting for the first time through
internal messaging is too direct, the chat rooms provide the opportunity to get to know members first, before escalating the communication to a one-on-one basis.

The Company provides three different sets of chat rooms organized
  around three different themes. The chat rooms emulate a natural setting in which
  people tend to meet, and are graphically enhanced to look and feel like an actual
  themed environment.

Friendship/Companionship
  Chat Rooms

The Friendship/Companionship set of chat rooms are designed to attract members who are looking to meet others who have the same interests and are not looking for romantic involvement. There are four themed chat rooms available to these types of
members.

---

7

Romance
  & Love Chat Rooms

The Romance & Love set of chat rooms are designed to attract
  members who are serious about finding a love match and embarking on an experience
  of romance. Four themed chat rooms emulate the environments where singles could
  possibly look for love in the real world.

The
  Red Light District

In these chat rooms members can discuss more personal issues
  that are quite possibly sexual in nature. The Company hopes that by providing
  a separate set of chat rooms for sexual discussions, it will help prevent this
  type of interaction from occurring in the Friendship/Companionship and Romance
  & Love chat rooms.

Private
  Rooms

If a member connects with someone special in a chat room,
  he or she has the option of forming a private discussion where the two can send
  real time messages and interact one-on-one. The room is completely private.
  Only the two members involved are able to read the other's messages and participate
  in the conversation.

The
  Dressing Room

The Dressing Room allows members to design their own "avatar",
  a personalized caricature that represents the member throughout the site. Members
  enter the Dressing Room and have a selection of graphic representations of body
  parts and other accessories with which to create their own caricature. By utilizing
  simple navigation methods, members are easily guided through the creation of
  their avatar, choosing from a library of components (eyes, hair, body type,
  accessories, etc.). The avatar represents the member in all interactive sections
  of the Virtually Dating site. In chat rooms, multi-player games, video chat
  or on the member's personal profile, the avatar serves to introduce members
  to other members and provide another way in which members can express themselves.

Multi
  Player Avatar Based Games

The website contains an interactive Games Lounge in which
  members can congregate to play games with one another. Current games include
  a multi player card game and one on one backgammon board game. Each player/member
  participating in these games are represented by their avatar. Members utilizing
  this area of the site also have the ability to chat in real time with one another.

Live
  Video Chat

The website features a live video chat function for members whose personal computers have the capacity to perform video conferencing/interaction. Members can carry out real time video conferencing using this feature.

---

8

Send
  a Gift

The Company hopes to eventually develop the website to allow users to combine online dating with online shopping. This would allow members, once they had found that special someone, to send a gift to that person. Gifts would range from greeting
cards or "virtual" bouquets of flowers that are sent electronically, to merchandise which would be mailed to the recipient. Currently, animated greeting cards and virtual gifts are available to be sent within the website. Members are able to
customize a message and then send it along with a virtual card or a virtual gift from their VirtuallyDating mailbox (10 animated cards to start with and future plans to increase the Gallery's inventory).

When merchandise becomes available, members will be able to view a select inventory of Private Collection gifts with the click of a mouse and purchase the gift directly, without having to leave the site. The Companys initial plan is to keep
the recipient mailing information so that privacy of the member's location will be maintained. The sender will never know the address of the recipient, and vice versa. All gifts in the Private Collection will be tasteful and in the spirit of romance
so that intended recipients need not fear receiving something offensive in the mail.

The Company originally hoped to develop the website to permit
  the purchase and delivery of merchandise within the first year of launch of
  the e-commerce component of the site but has been unable to do so. The Company
  still intends to develop this aspect of its business but has been focusing on
  raising capital for use in marketing the website and developing other features.
  Currently, therefore, the Company does not foresee implementing merchandising
  infrastructure until funds for marketing have been made available and a larger
  member base has been established.

Dear
  Bridgette

The website features a section which offers Dear Abby
  style editorial content, addressing dating questions or dilemmas. Within this
  section, paid users may have one on one dating or relationship type questions
  answered directly by the Companys in-house relationship coach known on
  the site as Bridgette. Members can ask questions directly to Bridgette,
  who in turn sends the member her advice or reply. The reply is sent directly
  to the members personal mailbox hosted on the www.virtuallydating.com
  website.

Horoscopes

The Company has negotiated an agreement with KnowledgeWeb, Inc. ("KnowledgeWeb"), pursuant to which the horoscope content of KnowledgeWeb's website will be made available to the Company's members. KnowledgeWeb provides an online horoscope service
through its website located at www.Astrology.net. The Company entered into an Affiliate Agreement with KnowledgeWeb on November 8, 1999.  Pursuant to the terms of the Affiliate Agreement, the Company is permitted to provide its members with access
to content provided on the Astrology.net website.  Access is provided by direct links from the Company's website to the Astrology.net website. Astrology.net provides some horoscope content to its users free of charge (e.g. daily horoscopes) and
charges users for other content (e.g. personalized charts). KnowledgeWeb pays the Company commissions on purchases of content/services provided by Astrology.net made by persons who are linked to the

---

9

Astrology.net website directly from the Company's website
  (10% for aggregate purchases of up to $1,000 in any given month and 20%
  for aggregate purchases exceeding $1,000 per month).

Banner
  Advertising

In addition to membership fees and online shopping, the Company hopes to generate revenue through the sale of banner advertising.  Once traffic on the Company's website reach 1,000,000 page views per month, the website will be marketable to major
corporations for banner advertising. A page view is the number of times each page throughout the site has been viewed by multiple users.

Competition

The Company competes with numerous entities that provide matchmaking/dating services to the public in a variety of manners. The Company has identified four sources of competition: traditional "offline" dating agencies, personal advertisements,
telepersonals and other online dating services.

Traditional Dating Agencies

The Company competes with traditional "offline" dating agencies that provide matchmaking services to single adults. These are typically local services which serve defined and limited geographic areas. These services typically charge clients a fee
for their service and do not facilitate interaction beyond introducing their clients to one another. By virtue of delivering its services via the Internet, the Company can reach a market that is international in scope. Marketing efforts will
initially focus primarily on Canada and the U.S., but the Company is in a position to deliver its services anywhere in the world.  This represents a significant advantage for the Company relative to traditional local dating agencies. In addition,
the Company offers a range of services and forums that facilitate interaction between single people prior to them actually meeting in person. This type of service has generally not been provided by traditional dating agencies. Finally, the Company's
internet based service allows delivery of the service directly to an individual's home computer This allows members to interact socially from the comfort of their own home, until such time as they wish to interact with other members in a more direct
fashion. The primary competitive disadvantage for the Company relative to "offline" dating services, is the Company's reliance on the Internet to deliver its services, which limits the Company's market to personal computer users with Internet
access. Traditional dating services have no such market restriction. Nonetheless, for the reasons discussed above, the Company believes that its use of the Internet as a means of service/product delivery is also the Company's primary competitive
advantage over traditional dating services.  In addition, the Company expects the use of the Internet to increase dramatically in the coming years, significantly offsetting any advantage "offline" dating agencies may have in this regard.

Personal Ads

Single adults seeking companionship or romance often place personal advertisements in newspapers and other periodical publications. The Company thus competes with newspapers and other periodicals for a portion of the market share. Similar to
offline dating agencies,

---

10

periodicals are subject to geographic restrictions with respect to the market they can operate in. They can be costly and do not have an interactive component as the Company's Internet based service does. Without an interactive component,
participants are forced to communicate directly, either via telephone or in person, perhaps more quickly than they would like. As discussed above, the Company's Internet based service allows members to interact from the comfort and security of their
homes prior to arranging person to person contact with a prospective companion. Personal advertisements also have the advantage of being accessible to individuals without computers and Internet access. As discussed above, however, the Company
believes that the use of the Internet will increase dramatically in the coming years, thereby offsetting a significant portion of the advantage of offline services in this regard.

Telepersonals

Telepersonal services enable users to record personal advertisements that can then be accessed by other individuals over the telephone. Fees are often based on time spent using the service. Telepersonal advertisements have some of the same drawbacks
relative to the Company's Internet based service that the other services described above have. They do not facilitate any social interaction prior to a person to person or telephone meeting with a prospective companion.  Telephone use is, however,
much more widespread than Internet use, providing telepersonal matchmaking service providers with an advantage over the Company in terms of accessibility of the service. This competitive advantage will only be overcome if Internet use becomes as
widespread as telephone use, making the Companys products and services as accessible as those of telepersonal matchmaking services.

Online Dating Services

There are many other websites that provide services similar
  to those that are provided by the Company. The information below provides a
  summary of what the Company believes to be the most successful direct competition.

Match.com

Match.com was purchased in 1999 by Ticket Master for a reported
  $50 million. Match.com is considered a leading online matchmaking and dating
  service that targets single adults and provides them with a convenient and private
  environment for meeting other singles. Match.com and their networks claim that
  their service served approximately 857,000 paying subscribers and has attracted
  more than 18 million members.

MatchMaker.com

MatchMaker.com was purchased in August 2000 by Lycos for a reported $45 million (Lycos was subsequently purchased by Terra Networks SA and is now Terra Lycos). Matchmaker.com can be considered a leading online matchmaking and dating service that
offers single adults a convenient and private environment for meeting other singles. Matchmaker.com claims that there are over 3 million members who regularly visit the site. MatchMaker.com derives the majority of its revenue from subscription fees
and advertising sales.

---

11

MatchNet,
  PLC

MatchNet, PLC considers itself to be 1 of the 3 top online
  dating and romance companies worldwide. They report more than 7.0 million registered
  users throughout their network of online dating and romance websites. MatchNet,
  PLCs network consists of a number of sites worldwide: AmericanSingles.com
  catering to the United States; MatchNet.de catering to Germany; MatchNet.co.uk
  catering to the United Kingdom; MatchNet.com.au catering to Australia, CollegeLuv.com
  targeting college age members, Glimpse.com targets the gay and lesbian community.
  MatchNet, PLC also owns and operates Jdate.com targeting the Jewish online dating
  population. MatchNet, PLC derives the majority of its revenue from subscription
  fees and advertising sales generated across its network of sites.

General

While the Company provides certain products and services that management believes are not currently being provided by the Company's online competitors, the Company is still at a competitive disadvantage relative to the online competitors listed
above because of their established market presence. The Company will have to capture a market share before it can effectively compete with established online competitors. Established competitors have revenues to further develop and enhance their
products and services, while the Company is dependent on additional financing to do so. Refer to "Assessment of Competition" below for a discussion of the relative competitive advantages of established online matchmaking service providers.

Assessment of Competition

The Company's primary competition comes from other online dating services. The Company's management is of the view that online matchmaking/dating services are superior to services provided by offline competitors and that the major barrier to their
success relative to offline competitors is that internet use, despite having expanded rapidly in recent years, is still not universally available in the Companys target market. Management is of the view that once Internet access becomes more
widespread, online matchmaking services should displace offline competition. The interactive component of the online service, particularly the potential to foster extensive interaction prior to person to person meetings, should make use of online
services more appealing than offline services to single adults seeking companionship. There is no guarantee, however, that access to and use of the Internet will increase. Even if access to and use of the Internet do increase, there is no guarantee
that online services will displace offline competitors or that the Company will capture a substantial portion of the online market.

The Company's website is currently functional, but membership recruitment is at a very early stage. Established competitors therefore have an advantage over the Company in that they have already captured a share of the market and thus have an
established market presence. The Company has been focusing its efforts on raising equity capital to invest in marketing of its services, which it hopes will increase membership. Lack of equity funding has prevented the Company from making
significant investments in marketing to date.

Achieving critical mass with respect to market share is critical for a business of the nature of the Company's. The Company's service will only be useful to consumers once a certain level

---

12

of membership is attained. Competitors who already have an established market share are, therefore, in a better competitive position than the Company. The Company hopes to offset any such competitive advantages by offering products and services that
are superior in quality and more appealing than those of their competitors and by launching an effective marketing campaign.  There is no guarantee, however, that the Company will be able to accomplish this. Given the Companys current
financial resources it will be difficult for the Company to compete effectively with established online competitors. Management hopes, however, that the quality of the Companys products and services will enable it to compete with more
established competitors over the long term.

The Company's primary objectives in the immediate future are to market its products/services and attain a broadly based diverse membership. To do so will require capital. The Company relies on equity financing to acquire capital for marketing and
product development. There is no guarantee that financing sufficient to enable the Company to meet its objectives will be available in the future. The Company will thus be at a competitive disadvantage relative to more established competitors with
greater access to capital. Established competitors with cash flow from revenues may be in a better position to capture a share of the available market.

Intellectual Property Rights

The Company relies on copyrights, trademarks, trade secret laws and contractual restrictions to establish and protect its proprietary rights in its services and products. The Company does not at this time have any patented technology that would
prevent competitors from entering into its market. In addition, the Company has not registered any of its copyrighted software or trademarks. There can, therefore, be no assurance that the Company will be able to protect its proprietary rights from
use by its competitors.  The Company's management believes, however, that the steps taken by the Company to protect its intellectual property are consistent with industry standards for online businesses. The Company protects proprietary software
primarily by maintaining secrecy with respect to source codes and other information pertaining to the Companys software.  Consultants conducting development work on the Companys technology are bound by confidentiality clauses that
restrict dissemination of proprietary technical information related to the Companys products.  The Company also relies on third party software licenses in the conduct of its business.

To date, the Company has received no notification that its services or products infringe the proprietary rights of third parties.  Third parties could, however, make such claims of infringement in the future. Any future claims that do occur may have
a material adverse effect on the Company and its business. Refer to "Risk Factors" herein.

Government Regulation

As at the date of filing, there are few laws and regulations that apply specifically to access to or commerce on the Internet.  Due to the increasing popularity of use of the internet, however, it is possible that laws and regulations with respect
to the internet may be adopted at federal, state and even local levels, covering issues such as user privacy, freedom of expression, pricing, characteristics and quality of products and services, taxation, advertising, intellectual property rights,
information security and the convergence of traditional telecommunications services with Internet communications. Such future regulations may end

---

13

up having a material adverse affect on the Company and its business. Refer to "Risk Factors" herein.

Employees and Consultants

The Company has no full or part time employees.  The Company retains consultants to provide it with services related to the administration, management and development of the Company.  The Company pays $2,500 per month to MCS Management Ltd., a
private company wholly owned by Marlene Schluter, director, secretary and treasurer of the Company, for management and administrative services provided by MCS Management Ltd. The Company pays $2,500 per month to Netgain Management Solutions
Inc., a private company wholly owned by Chad Lee, director and president of the Company, for management and administrative services provided by Netgain Management Solutions Inc.

The Company retains the services of 1 web-programming consultant to perform maintenance and additional development work on an as needed basis. The consultant works under the Companys direct supervision and payment is tied to and based on the
completion of specific tasks.  No written agreements have been entered into between the Company and the consultant. The Company has no obligations to the consultant, and the consultant has no obligations to the Company, beyond the completion of each
specified task or segment of development work.

Risk Factors

Prospective investors should consider carefully the following risk factors, in addition to the other information contained in this Report concerning the Registrant and its business, before making any investment in the Registrant's securities.

Inability to Continue Business as a Going Concern

The Companys financial statements for the year ended June 30, 2005 were prepared on a going concern basis in accordance with United States generally accepted accounting principles. The going concern basis of presentation assumes that the
Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company may not be able to raise additional capital or achieve
profitability and as a consequence may not be able to meet liabilities and commitments in the normal course of business, which would jeopardize its ability to continue business operations in accordance with its business plan or at all.

The Companys audited financial statements disclose that there is a substantial doubt about the Companys ability to continue as a going concern. The Company has incurred losses of $3,224,279 to June 30, 2005. As at June 30, 2005 the
Company had a working capital deficiency of $189,232. The Companys liquidity and capital resources are limited and it is presently relying on a combination of revenues from sales and equity investment in order to fund continued operations.
The Companys financial condition raises serious doubt as to its ability to continue operations without additional equity or debt financing as described in the explanatory paragraph of the report of our independent auditor and note 1(c) of our
financial statements.  The presentation of the Companys financial statements assumes that the Company will continue as a going concern and its assets and liabilities are recorded on the basis that the business will

---

14

continue for the foreseeable future. In order to continue as a going concern, the Company must carry out its business plan and achieve profitability, which may not occur in the foreseeable future.  If the Company is unable to continue as a going
concern, the proceeds from the liquidation of its assets may not be sufficient to discharge its liabilities as they become due, placing the Company at risk of legal proceedings, including bankruptcy proceedings, being initiated by the Companys
creditors. The Companys inability to continue as a going concern will result in a significant loss of value of our common stock.

Potential for Failure of the Companys Business

The Company may not be successful in its effort to further its business. Even if the Company was to successfully meet the goals it has set for itself the aforesaid goals may not be achieved within the respective time frames set for them herein. The
limited extent of the Company's assets and the Company's stage of development as well as the Company's limited operating history make it subject to the risks associated with start-up companies.  For example, the Company, like many start-up
companies, does not have significant revenues and may experience cash flow difficulties. It may, therefore, be required to rely on equity or bank financing to meet any cash needs in the short term. Such financing may not be available. In addition,
the Company does not have an established presence in its target market and its name is not well known to consumers in that market.  There is no guarantee that the Company will ever establish a significant presence in its target market.  Earning
revenue depends on successful development of products and services.  The Company may require additional financing to fully develop its products and services and, as discussed above, such financing may not be available when required. Any or all of
these factors may cause the Companys business to fail.

Ability to Retain Qualified Management Personnel

The Company's present management structure, although adequate for the early stage of its operations, will likely have to be significantly augmented as operations commence and expand. The ability of the Company to recruit and retain capable and
effective individuals is unknown. The loss of the services of its current officers, or the inability of the Company to attract, motivate and retain highly qualified executive personnel in the future could result in failure of or cause serious
disruption to the Companys business.

Competition in the Online and Offline Matchmaking Service Market

The Company intends to enter into the internet/e-commerce market. This market is subject to intense competition from both private and public businesses nationally and/or around the world, many of who have greater financial and technical resources
than the Company. The Company competes with more established competitors in the Internet matchmaking and e-commerce businesses and may have difficulty establishing a significant market presence. In addition, the Company competes with the more
established offline matchmaking/dating services industry. Competition from these sources as well as any other future competition may be insurmountable for the Company. If the Company is unable to compete in this marketplace, its business may fail.
Refer to the section entitled Competition herein.

---

15

Adverse Effects of Incorrect Financial Assumptions

The Company will rely on internally prepared forecasted financial statements, which are predicated on certain assumptions, including assumptions of revenue and expense and the occurrence of certain future events, which in turn were based on
management's considered assessment of prevailing conditions and management's best estimates of future events. Should, for example, product yields or prices deviate from the levels assumed in the internal forecasted statements, then the Company's
projected revenue and profits will be less than projected. Similarly, should the Company's actual costs exceed the assumed levels, then the Company's projected profits would likewise be less than projected. In the final analysis, any return to an
investor in the Company will in large part be determined by management's ability to execute the Company's plan as projected, and there can be no assurances provided of their success with respect thereto.  There can be no assurances whatsoever as to
the future financial performance of the Company. Projections are based upon current information and certain extrinsic factors, some of which are beyond the control of the Company, and/or subject to various assumptions, such as the Company's ability
to obtain additional financing and its ability to implement its plan.

Absence of Operating History

The Company was incorporated on May 7, 1997.  As discussed above, however, the Company was previously a mineral exploration company and it has not had an extensive operating history in the internet/e-commerce business. Most of its efforts to date
have been focused on the development and marketing of its website. The Company has no revenues from operations and has yet to produce a profit. Failure to achieve projected rates of market penetration could significantly affect the Company's pattern
of revenues and expense, and accordingly future cash flow. Therefore, the Company's stockholders should be prepared to bear the economic risk of losing their entire investment.

Designation as a Penny Stock

The Company's securities may be deemed "penny stock" as defined in Rule 3a51-1 of the Securities and Exchange Act of 1934, as amended. Such a designation could have a material adverse effect on the development of the public market for shares of the
Company's common stock or, if such a market develops, its continuation, since broker-dealers are required to personally determine whether an investment in such securities is suitable for customers prior to any solicitation of any offer to purchase
these securities. Compliance with procedures relating to sale by broker-dealers of "penny stocks" may make it more difficult for purchasers of the Company's common stock to resell their shares to third parties or to otherwise dispose of such
shares.

Ability To Raise Additional Capital

The Company may not be able to raise additional funds for expansion and/or growth. If such funds are not available the Companys business may fail and investors may lose their entire investment. Additional financing may come in the form of
securities offerings or from bank financing. If additional shares are issued to raise capital, existing shareholders will suffer a dilution of their stock ownership in the Company. In the event the Company has not achieved certain milestones, or
consummated further financings, the Company will have severe cash

---

16

flow and liquidity problems and may cease at that point to be a viable commercial entity. Refer to the section entitled Plan of Operation  Cash Requirements for a discussion of the Companys finances.

Potential Conflicts Of Interest

There are various interrelationships between the officers and directors of the Company that may create conflicts of interest that may be detrimental to the Company. The Companys directors and officers will deal with any such conflicts of
interest, should they arise, in accordance with applicable corporate law principles.

No Foreseeable Dividends

The Company does not anticipate paying dividends on its common stock in the foreseeable future but plans to retain earnings, if any, for the operation, growth and expansion of its business.

Failure to Obtain Permits and Licenses

The operations of the Company may require licenses and permits from various governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits that may be required to carry out its plan.

Loss of Interest in Intellectual Property / Claims of Infringement by Third Parties

The Company does not have any patents for its technology and has not registered any of its copyrighted software or trademarks. There can, therefore, be no assurance that the Company will be able to protect its proprietary rights from use by its
competitors. The commercial success of the Company may also depend upon its products and services not infringing any intellectual property rights of others and upon no such claims of infringement being made. Management is currently unaware of any
such infringement or actual or potential claim of infringement. It is possible, however, that such infringements or claims exist. If any claims of infringement are made, the Company may be held liable for damages for such infringement and be
required to pay cash compensation. The Company may also be forced to stop using technology upon which it is currently dependent if use of that technology is found to infringe proprietary rights held by others.

Currency Fluctuation

The Company's potential operations make it subject to foreign currency fluctuation and such fluctuation may adversely affect the Company's financial position and results. There can be no assurance that steps taken by management to address foreign
currency fluctuations will eliminate all adverse effects and accordingly, the Company may suffer losses due to adverse foreign currency fluctuation. Such fluctuations may also influence future contribution margins.

---

17

Access to Technology by Competitors

The technology necessary to create a service such as the one the Company will be offering exists today and is readily accessible.  The Company's line of business may, therefore, be easily entered by would-be competitors.

Lack of Market Acceptance of the Internet as a Means of Conducting Commercial Transactions

In managements view, use of the Internet by consumers, despite having expanded rapidly in recent years, is still at an early stage of development. Market acceptance of the Internet as a commercial medium is, therefore, subject to a high level
of uncertainty.  The Company expects to experience significant fluctuations in operating results in future periods due to a variety of factors, including, but not limited to:

- market acceptance of the Internet as a commercial medium for consumers;
- the Company's ability to create and deliver internet content in order to attract users to its websites to purchase its product and/or services, and to attract advertisers to its websites;
- the ability of the Company to produce content which will be attractive to a sufficient number of users to generate significant revenues;
- intense competition from other providers of related content over the Internet;
- delays or errors in the Company's ability to effect electronic commerce transactions;
- the Company's ability to upgrade and develop its systems and infrastructure in a timely and effective manner;
- technical difficulties, and/or system downtime ;
- the Company's ability to attract customers at a steady rate and maintain customer satisfaction;
- seasonality of the industry;
- seasonality of advertising sales;
- Company promotions and sales programs;
- the amount and timing of operating costs and capital expenditures relating to expansion of the Company's business, operations and infrastructure and the implementation of marketing programs, key agreements and strategic alliances;
- the level of returns experienced by the Company; and
- general economic conditions and economic conditions specific to the Internet, on-line commerce industry.

Dependence on Telecommunication Infrastructure

The Company's services are dependent on the use of the Internet and telephone connections. Any interruptions, delays or capacity problems experienced on the Internet or with the telephone connection could adversely affect the ability of the Company
to provide its services. The telecommunications industry is subject to regulatory control. Amendments to current regulations could disrupt or adversely affect the profitability of the Company's business. The Company's business is highly dependent on
its computer and

---

18

telecommunications systems for the operation and quality of its services. The temporary or permanent loss of all or a portion of either system, or significant replacement delays, for whatever reason, could cause disruption of the Companys
business activities and result in loss of revenues.

ITEM 2: DESCRIPTION OF PROPERTY

Office Space

The Company rents 488 square feet of office space on a month to month basis and pays a total of $900 (Canadian) per month rent plus 7% Goods and Services Tax.

Computer Equipment

The Company owns the following computer equipment:

- Compaq Proliant 1600R Pentium 3 - 500 Megahertz Servers (3)
- Sun Microsystems E450 Server (1)
- Sun Microsystems Netra T-1 Server (3)
- Campus Pentium Celeron 366MMX Processors (3)
- Campus Pentium 3- 500 Megahertz Processor (1)
- HP 8200CD Writer (1)
- 17" Hansol Flat Screen SVGA Color Monitors(1)
- 17" Samsung Flat Screen SVGA Color Monitor(2)
- Sun Microsystems Ultra 5 Server (1)
- APC AP9004 Back Up Power Supply (1)
- Seagate 8Gb Travan Tape Back Up (1)
- Xerox DocuPrint Color Printer
- 17" Flat Screen SVGA Color Monitors (2)
- Hewlett Packard Scanjet 4200C Printer (1)
- 60 Watt Power Amplified Speakers (2)
- Cannon B640 Fax Machine

ITEM 3: LEGAL PROCEEDINGS

There are no legal proceedings reportable pursuant to this section.  As of the date of this report, the Company has not been served with notice of any legal proceedings and does not contemplate undertaking any legal proceedings.

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

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report, through the solicitation of proxies or otherwise.

---

19

PART II

ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Market Information

Principal Markets

The Company's common shares are traded on the over the counter
market, with quotations posted on the NASD Over-the-Counter Bulletin Board under
the ticker symbol ONIN. Prior to May 5, 1999, the common shares of the Company
traded under the ticker symbol SLOG, reflecting the previous name of the
Company, Sinaloa Gold Corp. On May 5, 1999, the Company began trading under the
ticker symbol ONIN.

The Companys shares are also listed to trade on the Third
Market Segment (the Regulated Unofficial Market) of the Frankfurt Stock Exchange
under the symbol ONN, although trading of the Companys shares on this exchange
is very sporadic.

High and Low Bid Information

The common shares of the Company began trading on February 24,
1998 under the ticker symbol SLOG on the OTCBB. Between April 6, 2000 and
October 23, 2000, the Companys shares were not eligible for quotation on the
OTCBB and were quoted only on the NQSB Pink Sheet Quotation System. Since
October 23, 2000, the Companys shares have been quoted on the OTCBB. The
following table sets out high and low sale prices for the Company's common
shares for each quarter within the last two fiscal years.

Quarter Ended
      High
      LowJune 30,
      2003
      0.60
      0.08September 30,2003
      0.35
      0.145December
      31, 2003
      0.44
      0.145March
      31, 2004
      0.51
      0.30June 30,
      2004
      0.72
      0.26September 30, 2004
      0.70
      0.36December
      31, 2004
      0.37
      0.24March
      31, 2005
      0.25
      0.16June 30, 2005
      0.16
      0.13


---

20

Quote data is obtained from Canada Stockwatch. Quotations
posted on the OTCBB and the NQSB Pink Sheet quotation system reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.

Holders

As at September 27, 2005 there were approximately 62
stockholders of record holding 20,679,166 common shares of the Company.

Dividends

The Company has not declared any cash dividends on its common
shares for the last 2 fiscal years or any subsequent interim period. The Company
does not intend to pay cash dividends in the foreseeable future.

Securities Offered For Issuance Under Equity Compensation
Plans

Plan Category
      (a) 
         
      Number of Securities to be Issued Upon
      Exercise of Outstanding Options, Warrants
      and Rights
      (b) 
         
      Weighted Average Exercise Price of
      Outstanding Options, Warrants and Rights
      (c) 
         
      Number of Securities Remaining
      Available For Future Issuance Under
      Equity Compensation Plans (Excluding
      Securities Reflected in Column (a))Equity Compensation Plans Approved by
      Security Holders
      Nil
      N/A
      1,500,000Equity Compensation Plans Not Approved by
      Security Holders
      Nil
      N/A
      NilTotal:
      Nil
      N/A
      1,500,000


At its annual meeting of stockholders held on December 4, 2000,
a 2000 Incentive Stock Option Plan (the Plan) was approved by the Companys
stockholders. Pursuant to a directors resolution dated October 20, 2000, the
Plan was adopted by the Companys directors subject only to receipt of
stockholder approval. The plan authorizes the granting of options to purchase up
to 1,500,000 of the Companys common shares. Pursuant to the Plan, options may
be granted to directors, officers, employees, consultants and other service
providers. The aggregate fair market value of options that may be held by any
one optionee at any given time may not exceed $100,000. The exercise price of an
option granted must be

---

21

at least equal to the fair market value of a share of common
stock of the Company on the date the option is granted. No options have yet been
granted pursuant to the Plan, to directors or officers of the Company or to any
other entities.

Recent Sales of Unregistered Securities

Other than as disclosed herein, no equity securities were sold
by the Company during the quarter ended June 30, 2005. Details with respect to
equity securities sold by the Company in the three preceding quarters of the
fiscal year ended June 30, 2005 are set out in the Companys quarterly reports
on Form 10QSB for those periods. The Companys quarterly reports were filed via
EDGAR and are available online.

On May 17, 2005, the Company issued 105,000 shares of its
common stock to Fortune Capital Management (USA) Inc. (Fortune) to repay a
$25,000 loan made by Fortune to the Company. The loan was secured by a
convertible promissory note issued by the Company to Fortune on April 25, 2004.
The debt represented by the convertible note, together with outstanding
interest, was converted into shares of the Companys common stock at a deemed
price of $0.25 per share, pursuant to the terms of the note. The shares were
issued without registration under the Securities Act in reliance on the safe
harbor provisions of Regulation S promulgated under the Securities Act. The
noteholder was not a U.S. person as that term is defined in Rule 902(o) of
Regulation S and the sale of the securities constituted an offshore
transaction as that term is defined in Rule 902(i) of Regulation S.

On May 23, 2005, the Company issued the following shares of its
common stock to the following parties:

Name
      Number of Shares AcquiredNetgain Management
      Solutions Inc.[1]
      850,000Marlene Schluter
      220,000MCS Management
      Ltd.[2]
      820,000Fortune Capital
      Management (USA) Inc.
      1,310,000


[1] Netgain Management Solutions Inc. is a company wholly owned
by Mr. Chad D. Lee, president and director of the Company.

[2] MCS Management Ltd. is a company wholly owned by Ms.
Marlene C. Schluter, director, secretary and treasurer of the Company.

The shares were issued at a deemed price of $0.10 per share and
were issued to repay accrued debts for consulting and management services and
expenses incurred by the parties on behalf of the Company. The shares were
issued without registration under the Securities Act in reliance on the safe
harbor provisions of Regulation S promulgated under the Securities Act. None of
the shareholders was a U.S. person as that term is defined in Rule 902(o) of
Regulation S and the sale of the securities constituted an offshore
transaction as that term is defined in Rule 902(i) of Regulation S.

---

22

ITEM 6: PLAN OF OPERATION

General

The Company's business is conducted through its website, www.VirtuallyDating.com. The primary focus of the www.VirtuallyDating.com website is matchmaking. In addition to providing matchmaking services for single adults through a specialized search
engine for members, the site provides various interactive, entertainment related components that facilitate social interaction between members.

The Companys website has been fully operational since September 3, 2002. The Company hopes to generate revenues through the sale of memberships which will permit users to access the website. Prior to the full launch of the website, memberships
were offered free of charge. Since the site became fully operational the Company has been working towards developing a user base through the sale of memberships. The Company is currently offering free 10-day trials and an introductory special in
which users may purchase a 1-year membership for $19.95. The Company intends to continue the introductory offer until it has been able to carry out marketing activities to promote the website. After the introductory offer has been completed,
memberships will be available for $10.95 per month, $29.95 for three months, $49.95 for 6 months and $79.95 for 1 year.

After the website was launched the Companys intention was to promote the sale of memberships through various forms of marketing. The nature and extent of the Companys marketing efforts since the launch of the website have been determined
in large part by the availability of capital to conduct marketing activities. Since the Companys revenue stream from the sale of memberships has been limited, the Company has had to rely on small equity financings to provide it with working
capital for ongoing operations, including continuing website development and marketing. Funds available for marketing have, therefore, been somewhat limited. Nonetheless, the Company intends to continue to focus such capital as it has at its
disposal on marketing the website with a view to increasing revenues through the sale of memberships. Available capital will also be utilized for maintenance and ongoing development of the Companys www.VirtuallyDating.com website as well as the development of its second revenue generating website, www.UrbanFlirt.com (discussed in further detail below).

The Companys initial focus over the next 12 months will be to secure financing on favorable terms. Once the Companys financial situation is clearer to management, management will make the necessary strategic decisions respecting
marketing efforts and other uses of financial resources. Specific marketing strategies and website development plans are listed below. The Company will implement these strategies based on cost-effectiveness as resources become available.

Forward Looking Statements

All statements, other than statements of historical facts, included in this report that address activities, events or developments that the Company expects, believes, intends or anticipates will or may occur in the future, are forward-looking
statements. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results,

---

23

financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein. These risks and uncertainties include, but are not limited to, the Company's reliance on current revenues; the
uncertainties associated with the introduction of new products/services; management of growth, including the ability to attract and retain qualified employees; the ability to integrate acquisitions made by the Company and the costs associated with
such acquisitions; dependence on its principal executive officer; substantial competition from larger companies with greater financial and other resources than the Company; the success of its marketing strategy; its dependence on suppliers for some
of its products; currency fluctuations and other risks associated with foreign sales and foreign operations; quarterly fluctuations in revenues, income and overhead expense; and potential product liability risk associated with its existing and
future products. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events
or otherwise.

Marketing Strategies

General

Management believes that marketing will be the key to the Company's success in the short term and in the long term. As a result, management intends to focus as much of its energies as possible in the upcoming 12 months on marketing activities. The
Company intends to advertise online, through print media and possibly, depending on the resources available, through television, radio and billboards.  The target market for the Company's service is single adults, aged 18-49, with basic computer
skills and access to the Internet.  The Company intends to focus on the North American market in the short term and consider other markets at a later date.

As of September 27, 2005, the website had 80,125 registered profiles. The Company hopes to increase this number once it has secured the financing necessary to undertake more intensive marketing activities. The Companys inability to secure
adequate financing since the launch of the website has limited its ability to invest money into marketing its flagship property.  The Companys ability to undertake marketing activities in the upcoming 12 months will be dependent on its ability
to secure financing.  Readers should refer to the section entitled Cash Requirements for a discussion of the Companys attempts to raise capital in the past quarter and its plans to raise capital in the upcoming year.

Online Advertising

Online advertising can take a number of different forms.  Banner advertising is the most common form.  The Company intends to place banner advertisements on those websites which management believes will enable the Company to most effectively reach
its target market.

Affiliations with other websites also provide an avenue for marketing for Internet companies. Companies with similar markets can form various types of strategic alliances to promote one another's products and services.  The key component is usually
a link to the affiliate company's website. In the upcoming 12 months, the Company will continue with its efforts

---

24

to forge strategic partnerships with key industry players. The Company hopes that by doing so it will be able to increase traffic on its website.

Another form of online advertising being considered by the Company involves sponsoring e-mails or newsletters sent by other Internet companies. Through payment of a sponsorship fee, the Company would be shown as the sponsor of a particular e-mail or
newsletter sent by an entity to its members. By selecting an entity with a large membership, the Company can reach large target markets. A message identifying the sponsor and a link to the sponsor's website are provided.

Management is exploring the various forms of online advertising available and intends to focus its initial energy on this sector because of the relatively low cost and the ability to reach its target market (i.e. personal computer users)
effectively.  It will, however, assess other marketing tools and utilize those which it feels will enable it to reach its target market in the most efficient and cost effective manner.

Print Media, T.V., Radio and Billboards

While management is of the view that online advertising is the most cost-effective marketing tool, it also believes that other, more traditional methods of marketing will be effective and must be developed to the fullest extent possible.  Management
envisions placing advertisements in the personals sections of major newspapers and in high circulation magazines with general readership to brand the VirtuallyDating name and to expose the Company to a wider audience. Determination as to whether
these types of advertisements will be placed will depend on funds available in the upcoming 12 months.  In addition, advertisements on television, radio and on billboards will be considered and utilized if the Company has the capital available to
purchase advertising space/time from these sources.

Current Marketing Efforts

In the period covered by this report the Company focused its marketing efforts on pay per click search engine placements to drive traffic to the website with several of the major and smaller search engine providers. These marketing activities were
arranged by the Company and by marketing consultants retained by the Company as described below.

The Company retains the services of Fortune Capital Management (USA) Inc. (Fortune), to provide sales and marketing services on a month to month basis. Fortune provides marketing concepts for the VirtuallyDating website, explores
strategic partnerships for the website and provides conceptual design for marketing materials to advertise the website. The Company pays $2,500 per month to Fortune and reimburses Fortune for expenses incurred in carrying out its duties under
the agreement.

Additional Website Development

The Company retains the services of 1 web-programming consultant to perform maintenance and additional development work on an as needed basis. The consultant works under the Companys direct supervision and his payment is tied to and based on
the completion of specific tasks.

---

25

Urban Flirt

Development is underway in connection with a proposed second revenue generating web property which will be known as UrbanFlirt and will be located on the web at www.urbanflirt.com. This web based community will feature the traditional
online matchmaking components that have pioneered the Online Dating Industry to date. The site will feature core functionality such as photo upload, messaging capabilities, compatibility indicators, detailed matching and distance calculators. The
Company's intentions are to design the site to appeal to the over 25-45 crowd. This demographic represents the highest users of Online Dating Services on the Internet today. The UrbanFlirt website is currently functional and is being subjected to
internal testing by the Company. The launch of this product has been postponed by the Company until adequate equity financing is successfully raised to complete the final necessary programming and marketing to properly roll out this new
property.

Purchase of Equipment

At this time, the Company does not anticipate the purchase of any significant equipment.

Employees

The Company currently has no full or part time employees.  The Company retains consultants to provide it with services related to the administration, management and development of the Company. At this time, the Company does not anticipate any
significant changes in staffing.

Cash Requirements

The Company currently has sufficient working capital to meet its operating requirements until September 30, 2005. In order to fund business activity beyond this date, the Company will need to arrange additional financing. Website development and
marketing efforts will be dependent on the Companys ability to raise such additional financing. Specific plans related to marketing and any additional website development which may occur in the upcoming months will be devised once financing
has been completed and management knows what funds will be available for these purposes.

On May 10, 2005, the Company negotiated a loan in the amount of $50,000 from Fortune Capital Management (USA) Inc. The loan was due and payable on August 10, 2005 and is secured by a convertible promissory note. The loan bears interest at a rate
of 10% per annum. The promissory note is convertible at the option of the noteholder at any time after August 10, 2005 into shares of common stock of the Company at a conversion price of $0.10 per share. The conversion rights may be exercised at
any time after August 10, 2005, but must be exercised prior to payment in full of the principal amount of the loan and any accrued interest. The Company has the right to prepay the loan at any time upon 15 days written notice to the noteholder.

The Company intends to use available finances to fund ongoing operations. Funds will be utilized for general and administrative expenses, website maintenance and development and marketing.

---

26

The Companys financial statements for the year ended June 30, 2005 were prepared on a going concern basis in accordance with United States generally accepted accounting principles. The going concern basis of presentation assumes that the
Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. As at June 30, 2005 the Company had a working capital deficiency of
$189,232. The Companys financial condition raises serious doubt as to its ability to continue operations without additional equity or debt financing. The Companys ability to raise additional capital through debt and equity financing
is presently uncertain.

---

27

ITEM 7: FINANCIAL STATEMENTS

---

|MOEN AND COMPANY     
|---------------------
|CHARTERED ACCOUNTANTS

|Member:                                                 |                                           
|------------------------------------------------------- | ------------------------------------------
|Canadian Institute of Chartered Accountants             | Securities Commission Building            
|Institute of Chartered Accountants of British Columbia  | PO Box 10129, Pacific Centre              
|Institute of Management Accountants (USA) (From 1965)   | Suite 1400  701 West Georgia
      Street
|                                                        | Vancouver, British Columbia               
|Registered with:                                        | Canada V7Y 1C6                            
|Public Company Accounting Oversight Board (USA) (PCAOB) | Telephone: (604) 662-8899                 
|Canadian Public Accountability Board (CPAB)             | Fax: (604) 662-8809                       
|Canada - British Columbia
      Public Practice Licence | Email: moenca@telus.net                   

INDEPENDENT AUDITORS REPORT

To the Directors and Shareholders of
  Online Innovation, Inc. (A Delaware Corporation)
  (A Development Stage Company)

We have audited the accompanying Balance Sheets of Online Innovation,
  Inc. (A Delaware Corporation) (A Development Stage Company) as of June 30, 2005,
  and June 30, 2004 (as restated), and the related Statements of Combined Income
  and Comprehensive Income, Retained Earnings (Deficit), Cash Flows, and Changes
  in Stockholders Equity for the years 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 audits.

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

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of Online Innovation,
  Inc. (A Delaware Corporation) (A Development Stage Company) as of June 30, 2005
  and 2004, and the results of its operations and its cash flows for the years
  then ended in conformity with accounting principles generally accepted in the
  United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1 to
  the financial statements, conditions exist which raise substantial doubt about
  the Companys ability to continue as a going concern unless it is able
  to generate sufficient cash flows to meet its obligations and sustain its operations.
  Managements plans in regard to these maters are also described in Note
  1. The financial statements do not include any adjustments that might result
  from the outcome of this uncertainty.

As discussed in Note 2(g) to the financial statements, the Company
  restated to write off the deferred tax assets of $52,500 to operations for year
  ended June 30, 2004.

|Moen and Company                 
|-----------------------------------
|(Signed)                         
|Chartered Accountants              
|Vancouver, British Columbia, Canada
|August 15, 2005                    

Independent Accountants and Auditors



---

F-1

|ONLINE INNOVATION, INC.                          
|-------------------------------------------------
|(A Delaware Corporation)                         
|(A Development Stage Company)                    
|Balance Sheets                                   
|June 30, 2005                                    
|(In U.S. Dollars)                                
|(With Comparative
      Figures at June 30, 2004)

|                                                                         |   | June 30,   |  
|------------------------------------------------------------------------ | - | ---------- | -
|ASSETS                                                                   |   | 2005       |  
|                                                                         |   |            |  
|Current Assets                                                           |   |            |  
|Cash                                                                     | $ | 20,522     |  
|TOTAL CURRENT ASSETS                                                     |   | 20,522     |  
|                                                                         |   |            |  
|Fixed assets                                                             |   |            |  
|Computer equipment, at cost less
      accumulated depreciation (Note 5) |   | 5,063      |  
|                                                                         |   |            |  
|Computer software development(Note
      6(b))                           |   |            |  
|Application
      development stage costs, less amortization             |   | 175,000    |  
|                                                                         |   |            |  
|TOTAL
      ASSETS                                                       | $ | 200,585    |  
|                                                                         |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                     |   |            |  
|                                                                         |   |            |  
|                                                                         |   |            |  
|Current Liabilities                                                      |   |            |  
|Accounts payable and accrued liabilities                                 | $ | 109,687    |  
|Management fees payable (Note
      4(a))                                |   | 5,000      |  
|Convertible notes payable (Note 11)                                      |   | 50,000     |  
|Loans from related parties (Notes 4(c))                                  |   | 45,067     |  
|TOTAL
      CURRENT LIABILITIES                                          |   | 209,754    |  
|                                                                         |   |            |  
|Stockholders' Equity                                                     |   |            |  
|Capital Stock (Note 3)                                                   |   |            |  
|Authorized:                                                              |   |            |  
|75,000,000
      common shares at $0.001 par value per share             |   |            |  
|Issued and outstanding - 20,679,166 common
      shares                  |   |            |  
|(June 30,
      2004 - 17,004,166 common shares), par value              |   | 20,679     |  
|Paid in capital in excess of par value
      of stock                    |   | 3,202,221  |  
|Deficit accumulated during development
      stage (Note 1)              |   | (3,224,279 | )
|Cumulative
      currency translation adjustments (Note 2(b))            |   | (7,790     | )
|TOTAL STOCKHOLDERS' EQUITY                                               |   | (9,169     | )
|                                                                         |   |            |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               | $ | 200,585    |  

Approved on Behalf of the Board

"Chad
  D. Lee"
  , President and Chief Executive Officer and Director

"Marlene
  C. Schluter"
  ,Secretary and Treasurer and Chief Financial Officer and Director

See Accompanying Notes to Financial Statements and Auditors'
  Report

---

F-2

|ONLINE INNOVATION, INC.                               
|------------------------------------------------------
|(A Delaware Corporation)                              
|(A Development Stage Company)                         
|Statements of Combined Income and Comprehensive Income
|(In U.S. Dollars)                                     

|                                           |   | Cumulative From |     |  |                |     |  |               |     |  |                    |     |  |               |  
|------------------------------------------ | - | --------------- | --- |  | -------------- | --- |  | ------------- | --- |  | ------------------ | --- |  | ------------- | -
|                                           |   | Inception Date  |     |  |                |     |  |               |     |  |                    |     |  |               |  
|                                           |   | on Aug 1, 1997  |     |  | Year Ended     |     |  |               |     |  | Three Months Ended |    
|                                           |   | to June 30,     |     |  | June
      30, |     |  |               |     |  | June 30,           |    
|                                           |   | 2005            |     |  | 2005           |     |  | 2004          |     |  | 2005               |     |  | 2004          |  
|                                           |   |                 |     |  |                |     |  | (As restated) |     |  |                    |     |  | (As restated) |  
|Interest and Other Income                  | $ | 1,264 $         |     |  | - $            |     |  | 1,264 $       |     |  | - $                |     |  | 175           |  
|                                           |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|Administration Costs                       |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|Amortization of computer software          |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|development stage costs                    |   | 150,000         |     |  | 150,000        |     |  | -             |     |  | 37,500             |     |  | -             |  
|Compensation on stock issued               |   | 150,000         |     |  |                |     |  | -             |     |  | -                  |     |  | -             |  
|Computer technology and                    |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|software development-preliminary           |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|development stage
      costs              |   | 395,508         |     |  | 2,070          |     |  | 39,349        |     |  | -                  |     |  | 15,980        |  
|Depreciation - fixed assets                |   | 112,026         |     |  | 13,876         |     |  | 13,876        |     |  | 3,469              |     |  | 3,469         |  
|Filing and transfer agent fees             |   | 32,177          |     |  | 3,993          |     |  | 2,427         |     |  | 1,105              |     |  | 671           |  
|Financing costs                            |   | 22,550          |     |  | -              |     |  | -             |     |  | -                  |     |  | -             |  
|Funding agreement commitment costs         |   | 345,600         |     |  | -              |     |  | -             |     |  | -                  |     |  | -             |  
|Interest on loans                          |   | 7,268           |     |  | -              |     |  | 2,417         |     |  | -                  |     |  | -             |  
|Management and consulting fees             |   | 976,404         |     |  | 194,402        |     |  | 134,483       |     |  | 15,000             |     |  | 15,000        |  
|Office expenses, net                       |   | 236,274         |     |  | 22,947         |     |  | 32,108        |     |  | 1,819              |     |  | 8,006         |  
|Option payment, mineral properties         |   | 30,000          |     |  |                |     |  |               |     |  | -                  |     |  | -             |  
|Professional fees                          |   | 277,597         |     |  | 31,234         |     |  | 17,901        |     |  | 19,219             |     |  | 6,314         |  
|Promotion, investor relations,             |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|and investor communications                |   | 88,711          |     |  | 845            |     |  | 741           |     |  | -                  |     |  | (104          | )
|Travel expenses                            |   | 83,731          |     |  | 33,742         |     |  | 10,063        |     |  | 14,150             |     |  | 7,438         |  
|Website marketing/Banner                   |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|advertising costs                          |   | 317,697         |     |  | 21,009         |     |  | 64,330        |     |  | 4,667              |     |  | 848           |  
|Total Administration
      Costs           |   | 3,225,543       |     |  | 474,118        |     |  | 317,695       |     |  | 96,929             |     |  | 57,622        |  
|Net income (loss) for the period           |   | (3,224,279      | )   |  | (474,118       | )   |  | (316,431      | )   |  | (96,929            | )   |  | (57,447       | )
|Other comprehensive income                 |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|Deferred income taxes                      |   | -               |     |  | -              |     |  | 52,500        |     |  | -                  |     |  | 52,500        |  
|                                           |   |                 |     |  |                |     |  |               |     |  |                    |     |  |               |  
|Comprehensive income (loss) for the period | $ | (3,224,279      | ) $ |  | (474,118       | ) $ |  | (368,931      | ) $ |  | (96,929            | ) $ |  | (109,947      | )

See Accompanying Notes to Financial Statements and Auditors'
  Report

---

F-3

|ONLINE INNOVATION, INC.                  
|-----------------------------------------
|(A Delaware Corporation)                 
|(A Development Stage Company)            
|Statements of Retained Earnings (Deficit)
|(In U.S. Dollars)                        

|                                       |   | Cumulative From |   |   |            |     |  |                    |     |  |            |   |   |               |  
|-------------------------------------- | - | --------------- | - | - | ---------- | --- |  | ------------------ | --- |  | ---------- | - | - | ------------- | -
|                                       |   | Inception Date  |   |   |            |     |  |                    |     |  |            |   |   |               |  
|                                       |   | of Aug 1, 1997  |   |   | Year Ended |     |  | Three Months Ended |    
|                                       |   | to June 30,     |   |   | June 30,   |     |  | June 30,           |    
|                                       |   | 2005            |   |   | 2005       |     |  | 2004               |     |  | 2005       |   |   | 2004          |  
|                                       |   |                 |   |   |            |     |  | (As restated)      |     |  |            |   |   | (As restated) |  
|Balance (deficit), beginning           |   |                 |   |   |            |     |  |                    |     |  |            |   |   |               |  
|of period                              | $ | -               |   | $ | (2,750,161 | ) $ |  | (2,381,230         | ) $ |  | (3,127,350 | ) | $ | (2,640,214    | )
|                                       |   |                 |   |   |            |     |  |                    |     |  |            |   |   |               |  
|Net profit (loss)
      for the period |   | (3,224,279      | ) |   | (474,118   | )   |  | (368,931           | )   |  | (96,929    | ) |   | (109,947      | )
|                                       |   |                 |   |   |            |     |  |                    |     |  |            |   |   |               |  
|Balance (deficit),
      end of year   | $ | (3,224,279      | ) | $ | (3,224,279 | ) $ |  | (2,750,161         | )   |  | (3,224,279 | ) | $ | (2,750,161    | )

See Accompanying Notes to Financial Statements and Auditors'
  Report

---

F-4

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Statements of Cash Flows     
|(In U.S. Dollars)            

|                                                |   | Cumulative From |     |  |                |     |  |          |   |  |                    |     |  |          |  
|----------------------------------------------- | - | --------------- | --- |  | -------------- | --- |  | -------- | - |  | ------------------ | --- |  | -------- | -
|                                                |   | Inception Date  |     |  |                |     |  |          |   |  |                    |     |  |          |  
|                                                |   | on Aug 1, 1997  |     |  | Year Ended     |     |  |          |   |  | Three Months Ended |    
|                                                |   | to June 30,     |     |  | June
      30, |     |  |          |   |  | June 30,           |    
|                                                |   | 2005            |     |  | 2005           |     |  | 2004     |   |  | 2005               |     |  | 2004     |  
|Cash Provided by (Used for)                     |   |                 |     |  | (As restated)  |     |  |          |   |  | (As restated)      |    
|Operating Activities                            |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|Net profit (loss) for the period                | $ | (3,224,279      | ) $ |  | (474,118       | ) $ |  | (368,931 | ) |  | (96,929            | ) $ |  | (109,947 | )
|Items not requiring use of cash:                |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|                                                |   | -               |     |  | -              |     |  | 52,500   |   |  | -                  |     |  | 52,500   |  
|Shares issued for funding
      agreement       |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|commitment
      costs                          |   | 345,600         |     |  | -              |     |  | -        |   |  | -                  |     |  | -        |  
|Shares issued for assignment
      of           |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|option on mineral properties                    |   | 30,000          |     |  | -              |     |  | -        |   |  | -                  |     |  | -        |  
|Shares issued for compensation                  |   | 150,000         |     |  | -              |     |  | -        |   |  | -                  |     |  | -        |  
|Depreciation - fixed assets                     |   | 112,026         |     |  | 13,876         |     |  | 13,876   |   |  | 3,469              |     |  | 3,469    |  
|Amortization of computer
      software         |   | 150,000         |     |  | 150,000        |     |  | -        |   |  | 37,500             |     |  | -        |  
|Cumulative currency translation adjustments     |   | (7,790          | )   |  | -              |     |  | (9,190   | ) |  | -                  |     |  | (1,834   | )
|Changes in non-cash working capital
      items |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|Accounts payable and accrued liabilities        |   | 261,459         |     |  | 164,658        |     |  | 56,812   |   |  | 10,546             |     |  | 689      |  
|Management fees payable                         |   | 172,000         |     |  | 69,500         |     |  | 47,500   |   |  | 15,000             |     |  | 15,000   |  
|Cash used for operating
      activities        |   | (2,010,984      | )   |  | (76,084        | )   |  | (207,433 | ) |  | (30,414            | )   |  | (40,123  | )
|Investing Activities                            |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|Computer software development                   |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|Application development
      stage costs       |   | (325,000        | )   |  | -              |     |  | -        |   |  | -                  |     |  | -        |  
|Fixed
      assets purchased                    |   | (117,089        | )   |  | -              |     |  | -        |   |  | -                  |     |  | -        |  
|Cash used for investing purposes                |   | (442,089        | )   |  | -              |     |  | -        |   |  | -                  |     |  | -        |  
|Financing Activities                            |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|Capital stock subscribed for cash               |   | 2,353,528       |     |  | 43,361         |     |  | 112,500  |   |  |                    |     |  | -        |  
|Convertible notes payable                       |   | 75,000          |     |  | 50,000         |     |  | 87,417   |   |  | 50,000             |     |  | 25,000   |  
|Loans from related parties                      |   | 45,067          |     |  | -              |     |  | 955      |   |  | -                  |     |  | -        |  
|Cash provided by financing
      activities     |   | 2,473,595       |     |  | 93,361         |     |  | 200,872  |   |  | 50,000             |     |  | 25,000   |  
|Cash increase (decrease)                        |   |                 |     |  |                |     |  |          |   |  |                    |     |  |          |  
|during the period                               |   | 20,522          |     |  | 17,277         |     |  | (6,561   | ) |  | 19,586             |     |  | (15,123  | )
|Cash, Beginning of period                       |   | -               |     |  | 3,245          |     |  | 9,806    |   |  | 936                |     |  | 18,368   |  
|Cash, End of year                               | $ | 20,522 $        |     |  | 20,522
      $ |     |  | 3,245    |   |  | 20,522
      $     |     |  | 3,245    |  

Supplemental Cash Flow Information (Note 13)

See Accompanying Notes to Financial Statements and Auditors'
  Report

---

F-5

|ONLINE INNOVATION, INC.                       
|----------------------------------------------
|(A Delaware Corporation)                      
|(A Development Stage Company)                 
|Statements of Stockholders' Equity            
|For Period from June 30, 2001 to June 30, 2005
|(In U.S. Dollars)                             

|                                            |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   | Cumulative  |          |   |               |  
|------------------------------------------- |  | ---------- | - | - | ------ | - | - | ---------- | - | - | --------- | -------- | - | ---------- | ------ | - | ----------- | -------- | - | ------------- | -
|                                            |  | Number of  |   |   |        |   |   | Additional |   |   | Total     |          |   | Retained   |        |   | Currency    |          |   | Total         |  
|                                            |  | Common     |   |   | par    |   |   | Paid-in    |   |   | Capital   |          |   | Earnings   |        |   | Translation |          |   | Stockholders' |  
|                                            |  | Shares     |   |   | Value  |   |   | Capital    |   |   | Stock     |          |   | (Deficit)  |        |   | Adjustments |          |   | Equity        |  
|Balance, June 30, 2001                      |  | 14,595,000 |   | $ | 14,595 |   | $ | 2,300,505  |   | $ | 2,315,100 |          | $ | (1,922,937 | )      | $ | 80          |          | $ | 392,243       |  
|Cancellation of 175,000 shares on           |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|August 23, 2001                             |  | (175,000   | ) |   | (175   | ) |   | (82,075    | ) |   | (82,250   | )        |   |            |        |   |             |          |   | (82,250       | )
|Cumulative currency translation adjustments |  |            |   |   |        |   |   |            |   |   |           |          |   |            | 194    |   |             | 194      |  
|Net loss for year ended June 30, 2002       |  |            |   |   |        |   |   |            |   |   |           | (135,277 | ) |            |        |   |             | (135,277 | )
|Balance, June 30, 2002                      |  | 14,420,000 |   |   | 14,420 |   |   | 2,218,430  |   |   | 2,232,850 |          |   | (2,058,214 | )      |   | 274         |          |   | 174,910       |  
|Issued for cash @ $0.30                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|July 22, 2002                               |  | 100,000    |   |   | 100    |   |   | 29,900     |   |   | 30,000    |          |   |            |        |   |             |          |   | 30,000        |  
|Issued for cash @ $0.30                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|July 26, 2002                               |  | 600,000    |   |   | 600    |   |   | 179,400    |   |   | 180,000   |          |   |            |        |   |             |          |   | 180,000       |  
|Issued for loan payable @ $0.30             |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|August 31, 2002                             |  | 110,000    |   |   | 110    |   |   | 32,890     |   |   | 33,000    |          |   |            |        |   |             |          |   | 33,000        |  
|Shares subscribed and                       |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|paid for cash @$0.50                        |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|November 6, 2002                            |  | 250,000    |   |   | 250    |   |   | 124,750    |   |   | 125,000   |          |   |            |        |   |             |          |   | 125,000       |  
|Issued for cash @ $0.40                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|April 25, 2003                              |  | 100,000    |   |   | 100    |   |   | 39,900     |   |   | 40,000    |          |   |            |        |   |             |          |   | 40,000        |  
|Issued for cash @ $0.40                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|April 25, 2003                              |  | 50,000     |   |   | 50     |   |   | 19,950     |   |   | 20,000    |          |   |            |        |   |             |          |   | 20,000        |  
|Cumulative currency translation adjustments |  |            |   |   |        |   |   |            |   |   |           |          |   |            | 1,126  |   |             | 1,126    |  
|Net loss for year ended                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|June
      30, 2003                         |  |            |   |   |        |   |   |            |   |   |           |          |   | (323,016   | )      |   |             |          |   | (323,016      | )
|Balance, June 30, 2003                      |  | 15,630,000 |   |   | 15,630 |   |   | 2,645,220  |   |   | 2,660,850 |          |   | (2,381,230 | )      |   | 1,400       |          |   | 281,020       |  
|Issued for cash @ $0.15                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|November 1, 2003                            |  | 700,000    |   |   | 700    |   |   | 104,300    |   |   | 105,000   |          |   |            |        |   |             |          |   | 105,000       |  
|Issued for cash @ $0.15                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|December 31, 2003                           |  | 50,000     |   |   | 50     |   |   | 7,450      |   |   | 7,500     |          |   |            |        |   |             |          |   | 7,500         |  
|Issued for notes payable                    |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|January 4, 2004                             |  | 624,166    |   |   | 624    |   |   | 61,793     |   |   | 62,417    |          |   |            |        |   |             |          |   | 62,417        |  
|Net loss for year ended                     |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|June 30, 2004                               |  |            |   |   |        |   |   |            |   |   |           |          |   | (368,931   | )      |   |             |          |   | (368,931      | )
|Cumulative currency translation adjustments |  |            |   |   |        |   |   |            |   |   |           |          |   |            | (9,190 | ) |             | (9,190   | )
|Balance, June 30, 2004                      |  | 17,004,166 |   |   | 17,004 |   |   | 2,818,763  |   |   | 2,835,767 |          |   | (2,750,161 | )      |   | (7,790      | )        |   | 77,816        |  
|Warrants exercised @$0.15                   |  | 250,000    |   |   | 250    |   |   | 37,250     |   |   | 37,500    |          |   |            |        |   |             |          |   | 37,500        |  
|Issued for cash @$0.39                      |  | 15,000     |   |   | 15     |   |   | 5,846      |   |   | 5,861     |          |   |            |        |   |             |          |   | 5,861         |  
|Issued for management fees payable          |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |  
|May 23, 2005                                |  | 850,000    |   |   | 850    |   |   | 84,150     |   |   | 85,000    |          |   |            |        |   |             |          |   | 85,000        |  
|Issued for accounts payable                 |  | 220,000    |   |   | 220    |   |   | 21,497     |   |   | 21,717    |          |   |            |        |   |             |          |   | 21,717        |  
|May 23, 2005                                |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|Issued for management fees payable          |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |  
|May 23, 2005                                |  | 820,000    |   |   | 820    |   |   | 81,180     |   |   | 82,000    |          |   |            |        |   |             |          |   | 82,000        |  
|Issued for accounts payable                 |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|May 23, 2005                                |  | 1,310,000  |   |   | 1,310  |   |   | 128,745    |   |   | 130,055   |          |   |            |        |   |             |          |   | 130,055       |  
|Issued for convertible notes payable        |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |  
|May 23, 2005                                |  | 210,000    |   |   | 210    |   |   | 24,790     |   |   | 25,000    |          |   |            |        |   |             |          |   | 25,000        |  
|Net loss for the year ended                 |  |            |   |   |        |   |   |            |   |   |           |          |   |            |        |   |             |          |   |               |  
|June 30, 2005                               |  |            |   |   |        |   |   |            |   |   |           |          |   | (474,118   | )      |   |             |          |   | (474,118      | )
|Balance, June 30,
      2005                |  | 20,679,166 |   | $ | 20,679 |   | $ | 3,202,221  |   | $ | 3,222,900 |          | $ | (3,224,279 | )      | $ | (7,790      | )        | $ | (9,169        | )

See Accompanying Notes to Financial Statements and Auditors'
  Report

---

F-6

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 1. BUSINESS OPERATIONS            
|---------------------------------------
|                                       
|                                       
|                                       
|                                       
|                                       
|                                       
|                                       
|Note 2. SIGNIFICANT ACCOUNTING POLICIES
|                                       
|                                       
|                                       
|                                       
|                                       
|                                       
|                                       
|                                       
|                                       

| |  |                                         |   | Year Ended |  
| |  | --------------------------------------- | - | ---------- | -
| |  |                                         |   | June 30,   |  
| |  |                                         |   | 2004       |  
| |  | Beginning balance, June 30, 2004 & 2003 | $ | (7,790     | )
| |  | Change during the
      period          |   | --         |  
| |  | Ending balance, June 30, 2005 & 2004    | $ | (7,790     | )

---

F-7

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 2. SIGNIFICANT ACCOUNTING POLICIES (Contd)
|------------------------------------------------
|                                                
|                                                
|                                                
|                                                
|                                                
|
|
|
|                                                
|                                                
|                                                
|                                                
|
|
|
|
|
|
|                                                
|                                                
|                                                
|                                                
|
|                                                
|                                                
|                                                
|                                                
|
|
|
|
|
|
|
|                                                
|                                                
|
|
|
|                                                
|                                                
|                                                
|                                                
|

---

F-8

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 2. SIGNIFICANT ACCOUNTING POLICIES (Contd)
|------------------------------------------------
|                                                
|                                                
|
|

| | June 30, 2005                       |   | Canada   |   |   | U.S.  |  |   | Total    |  
| | ----------------------------------- | - | -------- | - | - | ----- |  | - | -------- | -
| | Current assets                      | $ | 20,522   |   | $ | -     |  | $ | 20,522   |  
| | Net fixed assets                    |   | 5,063    |   |   | -     |  |   | 5,063    |  
| | Computer software development       |   | 175,000  |   |   | -     |  |   | 175,000  |  
| | Total Assets                        | $ | 200,585  |   | $ | -     |  | $ | 200,585  |  
| | Year Ended June 30, 2005            |   |          |   |   |       |  |   |          |  
| | Revenue                             | $ | -        |   |   | -     |  |   | -        |  
| | Administration costs                |   | (474,118 | ) |   | -     |  |   | (474,118 | )
| | Net (loss) for the
      period     | $ | (474,118 | ) | $ | -     |  | $ | (474,118 | )
| |                                     |   |          |   |   |       |  |   |          |  
| |                                     |   |          |   |   |       |  |   |          |  
| | June 30, 2004                       |   | Canada   |   |   | U.S.  |  |   | Total    |  
| | Current assets                      | $ | 3,245    |   | $ | -     |  | $ | 3,245    |  
| | Net fixed assets                    |   | 18,939   |   |   | -     |  |   | 18,939   |  
| | Computer software
      development |   | 325,000  |   |   | -     |  |   | 325,000  |  
| | Total Assets                        | $ | 347,184  |   | $ | -     |  | $ | 347,184  |  
| | Year Ended June 30, 2004            |   |          |   |   |       |  |   |          |  
| | Revenue                             | $ | -        |   |   | 1,264 |  |   | 1,264    |  
| | Administration costs                |   | (317,695 | ) |   | -     |  |   | (317,695 | )
| | Deferred tax asset written off      |   | (52,500  | ) |   |       |  |   | (52,500  | )
| | Net (loss) for the
      year       | $ | (370,195 | ) | $ | 1,264 |  | $ | (368,931 | )

| | (i) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | In December of 2002, the FASB issued Statement of Financial
        Accounting Standards No. 148, Accounting for Stock-Based Compensation
        and Disclosure (SFAS148). SFAS 148 addresses additional
        disclosure rules concerning stock-based compensation and three alternative
        methods for companies to choose from for those companies that have chosen
        to expense stock options under the fair value method prescribed by SFAS
        123. The Company has not issued any stock options by June 30, 2005. (See
        Note 8 Stock-Based Compensation / Pension Plan)
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | In May 2003, the FASB issued SFAS No. 150, Accounting
        for Certain Financial Instruments with Characteristics of Both Liabilities
        and Equity. It established standards for how an issuer classified
        and measures certain financial instruments with characteristics of both
        liabilities and equity. This standard was effective for financial instruments
        entered into or modified after June 30, 2003, with no material effect
        on the Companys financial position or results of operations.                                                             

---

F-9

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 3. CAPITAL STOCK
|---------------------
|                     
|                     
|                     
|                     

| |                        |  | Shares     |  |   | $         | 
| | ---------------------- |  | ---------- |  | - | --------- | 
| | Balance, June 30, 2004 |  | 17,004,166 |  | $ | 2,835,767 | 
| | Private placement      |  | 15,000     |  |   | 5,861     | 
| | Warrants exercised     |  | 250,000    |  |   | 37,500    | 
| | Issued for debt        |  | 3,410,000  |  |   | 343,772   | 
| | Balance, June 30, 2005 |  | 20,679,166 |  | $ | 3,222,900 | 

| | c) | Warrants outstanding as at June 30, 2005 are as follows:
| | -- | --------------------------------------------------------

| |                   |  | Units   |  |  | Exercise Price |  |  | Maturity Date    | 
| | ----------------- |  | ------- |  |  | -------------- |  |  | ---------------- | 
| | Jillian Henderson |  | 15,000  |  |  | $0.40          |  |  | October 14, 2005 | 
| |                   |  |         |  |  | $0.50          |  |  | October 14, 2006 | 
| |                   |  |         |  |  |                |  |  |                  | 
| | 482047 B.C. Ltd.  |  | 500,000 |  |  | $0.20          |  |  | November 4, 2005 | 
| |                   |  | 515,000 |  |  |                |  |  |                  | 

|Note 4. RELATED PARTY TRANSACTIONS
|----------------------------------
|                                  
|                                  
|                                  
|                                  
|                                  
|                                  

---

F-10

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 4. RELATED PARTY TRANSACTIONS (Contd)
|-------------------------------------------
|                                           
|                                           

| |                                 |  |           |  |  | Number of  |  |  |           | 
| | ------------------------------- |  | --------- |  |  | ---------- |  |  | --------- | 
| |                                 |  | Balance   |  |  | Shares     |  |  | Balance   | 
| |                                 |  | of Shares |  |  | Issued for |  |  | of Shares | 
| |                                 |  | Owned at  |  |  | Debt for   |  |  | Owned at  | 
| |                                 |  | June 30,  |  |  | Year Ended |  |  | June 30,  | 
| |                                 |  | 2005      |  |  | 2005       |  |  | 2004      | 
| | Marlene C. Schluter and         |  |           |  |  |            |  |  |           | 
| | MCS Management Ltd.             |  | 5,040,000 |  |  | 1,040,000  |  |  | 4,000,000 | 
| | Chad D. Lee and Netgain         |  |           |  |  |            |  |  |           | 
| | Management Sulutions
      Inc. |  | 4,850,000 |  |  | 850,000    |  |  | 4,000,000 | 
| | Total common shares owned       |  | 9,890,000 |  |  | 1,890,000  |  |  | 8,000,000 | 

| | Shares were issued for debt during the fiscal year ended June
      30, 2005 to related parties, as follows:
| | ------------------------------------------------------------------------------------------------------------

| |                         |  | Number    |  |   |               |  |  | Details of                         | 
| | ----------------------- |  | --------- |  | - | ------------- |  |  | ---------------------------------- | 
| |                         |  | of Shares |  |   | Consideration |  |  | Consideration                      | 
| | Ms. Marlene C. Schluter |  | 220,000   |  | $ | 21,717        |  |  | Expenses Paid on Behalf of Company | 
| | MCS Management Ltd.     |  | 820,000   |  |   | 82,000        |  |  | Management fees payable            | 
| |                         |  | 1,040,000 |  |   | 103,717       |  |  |                                    | 
| | Netgain Management      |  |           |  |   |               |  |  |                                    | 
| | Solutions Inc.          |  | 850,000   |  |   | 85,000        |  |  | Management fees payable            | 
| |                         |  | 1,890,000 |  | $ | 188,717       |  |  |                                    | 

| | c) | Loans to the Company unpaid as at June 30, 2005 are
        as follows:
| | -- | -----------------------------------------------------------------------

| | Netgain Management Solutions Inc. | $ | 7,660  |  | 
| | --------------------------------- | - | ------ |  | 
| | Chad D. Lee                       |   | 20,000 |  | 
| | Snowy Creek Resources Ltd.        |   | 7,407  |  | 
| | Marlene C. Schluter               |   | 10,000 |  | 
| |                                   | $ | 45,067 |  | 

| | Netgain Management Solutions Inc. is a Company owned
      by Mr. Chad D. Lee, Chief Executive Officer, Director and a shareholder
      of the company. Snowy Creek Resources Ltd. is a Company owned by Ms. Marlene
      C. Schluter, Chief Financial Officer, Director, Secretary, and Treasurer
      and a shareholder of the company. These loans are non interest bearing,
      are unsecured, and have no specific terms of repayment, and are disclosed
      as current liabilities in these financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|
|
|

---

F-11

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 5. FIXED ASSETS - COMPUTER EQUIPMENT
|-----------------------------------------
|                                         
|                                         

| |                          |   | June 30, |  
| | ------------------------ | - | -------- | -
| |                          |   | 2005     |  
| | Cost                     | $ | 117,089  |  
| | Accumulated depreciation |   | (112,026 | )
| | Net balance              | $ | 5,063    |  

|Note 6. COMPUTER TECHNOLOGY AND WEBSITE COSTS
|---------------------------------------------
|                                             
|                                             
|                                             
|                                             
|
|
|
|                                             
|                                             
|
|
|                                             
|                                             
|                                             
|                                             
|
|
|
|
|
|

| |                                                        |   | June 30, |  
| | ------------------------------------------------------ | - | -------- | -
| |                                                        |   | 2005     |  
| | Balance, June 30, 2004                                 | $ | 325,000  |  
| | Amortization during
      the year ended June 30, 2005 |   | (150,000 | )
| | Balance, June 30, 2005                                 | $ | 175,000  |  

---

F-12

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 7. STOCK BASED COMPENSATION/ PENSION PLAN
|----------------------------------------------
|                                              
|                                              
|                                              
|                                              
|                                              
|Note 8. NET LOSS PER SHARE                    
|                                              
|                                              
|                                              
|                                              

| |                                                          |  | June
      30, | 
| | -------------------------------------------------------- |  | -------------- | 
| |                                                          |  | 2005           | 
| | Basic                                                    |  | 17,640,208     | 
| | Convertible Notes $50,000 @ $0.10                        |  | 500,000        | 
| | Warrants                                                 |  | 515,000        | 
| | Stock plan options                                       |  | 1,500,000      | 
| | Dilutive                                                 |  | 20,155,208     | 
| | Diluted - same as
      Basic, due to loss on operations |  | 17,640,208     | 

| | Computation of net loss per share:
| | ----------------------------------

| |                              |   | June 30, |  
| | ---------------------------- | - | -------- | -
| |                              |   | 2005     |  
| | Net loss per share - Basic   | $ | ($0.03   | )
| | Net loss per share - Diluted | $ | ($0.03   | )

---

F-13

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 9. INCOME TAXES
|--------------------
|                    
|                    

| |                         |   | June 30,   |  
| | ----------------------- | - | ---------- | -
| |                         |   | 2005       |  
| | Deferred tax assets     | $ | 1,096,255  |  
| | Valuation allowance     | $ | (1,096,255 | )
| | Net deferred tax assets | $ | -          |  

| | A reconciliation between the statutory federal income tax rate
      and the effective income rate of income tax expense for the year ended June
      30, 2005 is as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                   |  | Year Ended     |  |  |        | 
| | --------------------------------- |  | -------------- |  |  | ------ | 
| |                                   |  | June
      30, |  |  |        | 
| |                                   |  | 2005           |  |  | 2004   | 
| |                                   |  |                |  |  |        | 
| | Statutory federal income tax rate |  | -34.0%         |  |  | -34.0% | 
| | Valuation allowance               |  | 34.0%          |  |  | 34.0%  | 
| | Effective income tax rate         |  | 0.0%           |  |  | 0.0%   | 

|Note 10. FINANCIAL INSTRUMENTS
|------------------------------
|                              
|                              

---

F-14

|ONLINE INNOVATION, INC.      
|-----------------------------
|(A Delaware Corporation)     
|(A Development Stage Company)
|Notes to Financial Statements
|June 30, 2005                
|(In U.S. Dollars)            

|Note 11. CONVERTIBLE NOTES PAYABLE         
|-------------------------------------------
|                                           
|                                           
|                                           
|Note 12. CONSULTING AGREEMENTS             
|                                           
|                                           
|                                           
|Note 13. SUPPLEMENTAL CASH FLOW INFORMATION
|                                           
|                                           

| |                                                            |   | Cumulative From   |  |   |               | 
| | ---------------------------------------------------------- | - | ----------------- |  | - | ------------- | 
| |                                                            |   | Inception Date    |  |   |               | 
| |                                                            |   | on August 1, 1997 |  |   | Year Ended    | 
| |                                                            |   | June 30, 2005     |  |   | June 30, 2005 | 
| | Shares issued for funding agreement commitment
      costs | $ | 345,600           |  | $ | -             | 
| | Shares issued for assignment of option expense             |   |                   |  |   |               | 
| | on mineral properties                                      | $ | 30,000            |  | $ | -             | 
| | Shares issued for compensation                             | $ | 150,000           |  | $ | -             | 
| | Shares issued for notes payable                            | $ | 95,417            |  | $ | 25,000        | 
| | Shares issued for accounts payable                         | $ | 151,772           |  | $ | 151,772       | 
| | Shares issued for management fees payable                  | $ | 167,000           |  | $ | 167,000       | 

---

28

ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company had no changes in or disagreements with accountants on accounting and financial disclosure of the type referred to in Item 304 of Regulation S-K.

ITEM 8A: CONTROLS AND PROCEDURES

The Company is managed exclusively by its principal executive officer and principal financial officer. The Company does not have management or employees which are separate from these 2 individuals.  As a result, all disclosure decisions are made
directly by the principal executive officer and principal financial officer of the Company and are based on direct knowledge of the Companys affairs held by them. These individuals also carry out all bookkeeping and other record keeping
activities undertaken by the Company and make all business decisions for the Company.  While the Company retains the services of a small number of consultants, none of these individuals has control over formal disclosure decisions or disclosure
contained in documents such as press releases and financial reports. All formal disclosure documents are reviewed and approved by the Companys principal executive officer and principal financial officer and are based on first hand knowledge of
these individuals (as opposed to knowledge derived from reports from employees, consultants or managers).  As a consequence, the Companys principal executive officer and principal financial officer are of the view that the Companys
disclosure controls and procedures are effective and result in full and true disclosure of material facts related to the Companys affairs.

There were no significant changes in the Companys internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of
internal controls that would require corrective action. There were no changes in the Companys internal control over financial reporting identified in connection with the Companys evaluation of its disclosure controls and procedures and
the effectiveness of those procedures in the last fiscal quarter.

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 sets forth, as of the date of this registration statement, the name, age, and position of the officers and directors of the Company and the date of appointment of such

---

29

officer or director:

Name
      Age
      Position
        (1)Chad D. Lee (2)
      37
      Director, President and CEOMarlene Schluter
      (3)
    41
      Director, Secretary and TreasurerHarvey H. Cohen
      (4)
    79
      Director and Vice President


|(1) | Pursuant to the Company's Bylaws, all directors serve
      until such time as their successor has been elected, until they resign or
      until they are removed by majority vote at a meeting of the Company's
      shareholders. Officers are elected by the Company's directors and serve
      until such time as their successor is appointed, until they resign or
      until they are removed by the directors. None of the Company's directors
      and officers hold positions with other reporting companies.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(2) | Marlene Schluter was appointed as Secretary and Treasurer
      of the Company on October 27, 1997.                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) | Chad Lee was appointed as President of the Company on
      April 15, 1998. Prior to being appointed as President, Mr. Lee acted as
      Vice-President of the Company from October 24, 1997 until he was appointed
      as President.                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(4) | Harvey H. Cohen was appointed as Vice-President of the
      Company on April 15, 1998.                                                                                                                                                                                                                                                                                                                                                                                                                                     

Chad D. Lee

Mr. Lee, the founder of what is now Online Innovation, Inc., is
a graduate of the University of British Columbia where he focused his studies on
the field of Urban Land Economics. He has used his skills in strategic
management, financial analysis and planning, contract negotiation, and business
planning to develop new companies and to assist established companies. Mr. Lee
is also the Principal of Netgain Management Solutions Inc. where he has
developed and implemented multi-media marketing strategies for several publicly
traded companies. Mr. Lee brings to the Company expertise in strategic
management, demonstrating strong leadership in visioning, corporate strategy
development and deployment with a clear focus on achieving results. Utilizing
his expertise in strategic visioning, he has diversified the company's focus to
the communications and hi-tech Internet sectors with the acquisition and further
development of the Company's technology assets.

Ms. Marlene C. Schluter

Ms. Schluter is a graduate of Simon Fraser University with a
Bachelor of Education (B Ed.). She was employed by the public school system at
the elementary and secondary school levels, specializing in Business and Math.
In addition, she was also an active member in the school counseling programs.
Ms. Schluter has furthered her professional career by attending courses in the
Master of Business Administration Program at the University of British Columbia
concentrating in the areas of International Trade and Finance. With this
education, she went on to work in the Financial Industry with Yorkton Securities
where she completed the Canadian Securities Course (CSC) and Series 63 and 67
for qualification in the United States. Ms. Schluter acted as a Broker's
Assistant and as a Broker with Yorkton Securities Inc. She was employed by
Yorkton Securities Inc. from April 1991 to December 1996.

---

30

From February 1997 to July 1997, Ms. Schluter acted as executive assistant and performed investor relations services for CKD Ventures Ltd., a Vancouver, British Columbia based mineral exploration company. She has acted as director, corporate
secretary and treasurer of the Company since October of 1997.

Harvey H. Cohen

Mr. Cohen graduated from the University of British Columbia with a Bachelor's degree in Physical Sciences / Mining Engineering. He has been a registered member of the Association of Professional Engineers and Geoscientists of British Columbia since
1954 and is also a lifetime member of the Canadian Institute of Mining, Metallurgy and Petroleum. During the course of his career he has acted for numerous publicly traded companies in the mining sector. Mr. Cohen has been semi-retired for
approximately ten years and was involved with the Company at the outset to provide advice on matters related to its mineral properties.

Significant Employees

The Company has no employees. All services are performed by consultants. Refer to the section headed "Employees and Consultants" under "Business of the Company" above.

Family Relationships

There are no family relationships among the Company's directors or officers.

Involvement in Legal Proceedings

During the past five years, no director or officer of the Company has been:

- a general partner or executive officer of a business against which a bankruptcy petition was filed;
- convicted in a criminal proceeding or is currently subject to a pending criminal proceeding;
- subject to any order, judgement or decree of any court of competent jurisdiction permanently or temporarily enjoining, barring, suspending him/her from, or otherwise limiting his/her involvement in, any type of business, securities or banking
activities; or
- found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

Code Of Ethics

The Company has not adopted a formal written code of ethics applicable to its  principal executive officer and principal financial officer.  As noted under item 8A above, the Company is managed exclusively by its principal executive officer and
principal financial officer, both of whom are directors of the Company.  The Company does not have management or employees which are separate from these 2 individuals. All work related to

---

|31                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|the Company is performed by a small
      number of consultants who are under the direct supervision of the
      principal executive officer and principal financial officer. All of the
      Companys finances are controlled by the principal executive officer and
      principal financial officer and all decisions related to the Companys
      affairs are made by these 2 individuals. Since they also comprise a
      majority on the board of directors of the Company, are directly
      accountable to the Companys shareholders and are subject to the all of
      the legal duties, obligations and liabilities applicable to directors of
      public companies, management is of the view that the adoption of a written
      code of ethics is not necessary.
|
|
|
|
|
|
|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Compliance with Section 16(a) of the Exchange
      Act                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Section 16(a) of the Exchange Act
      requires executive officers and directors of the Company and persons who
      beneficially own more than ten percent of the Company's Common Stock to
      file with the Securities and Exchange Commission certain reports, and to
      furnish copies thereof to the Company, with respect to each such person's
      beneficial ownership of the Company's equity securities. Based solely upon
      a review of the copies of such reports furnished to the Company and
      certain representations of such persons, all such persons have complied
      with the applicable reporting requirements.                                                                                                                                  
|
|
|
|
|
|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|ITEM 10: EXECUTIVE COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The following table provides a summary
      of the compensation paid to the Company's Chief Executive Officer for the
      last three fiscal years. No officers of the Company received in excess of
      $100,000 in annual salary and bonus. The Companys Chief Executive Officer
      has received no compensation other than salary.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
|
|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Summary Compensation Table                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Name and Principal Position
      Year Ended
      Annual 
        Compensation 
        SalaryChad Lee , President & Director
      June 30, 2005 
        June 30, 2004 
        June 30, 2003
      $30,000 (1)
        $30,000 (1)
        $30,000 (1)


|(1) | The cash compensation shown was paid to Mr. Lee pursuant
      to management agreements between the Company and a company wholly owned by
      Mr. Lee.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

As of the date of this report, the Company has not paid any
bonuses or granted any stock awards, options or stock appreciation rights to any
officer, director or employee. The Company has no arrangements for the
compensation of directors and officers for their services as directors and
officers.

---

32

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information regarding
the beneficial ownership of the Company's issued and outstanding common stock as
of September 27, 2005 by i) each person who is known to the Company to be the
beneficial owner of more than 5 percent of the Companys common stock; (ii)
named directors and executive officers; and (iii) all directors and executive
officers of the Company as a group:

Name and address of beneficial
        owner
      Amount
        and nature of 
        beneficial owner
      Percent of class (1)Chad D. Lee 
        (President, Chief Executive
      Officer and Director) 61-12411 Jack Bell Drive Richmond,
      British Columbia Canada
      4,850,000 (2)
      23.4%Marlene C. Schluter (Secretary, Treasurer and
      Director) 2215 Inglewood Avenue West Vancouver, British Columbia
      Canada
      5,040,000 (2)
      24.3%Harvey H. Cohen (Vice President and Director)
      8278 Tugboat Place Vancouver, British Columbia Canada
      0 (2)
      0.0%Stan Ross 2215 Inglewood Avenue West
      Vancouver, British Columbia Canada
      2,188,166
      10.6%Directors, Officers and beneficial owners of
      more than 5 percent of the Companys common stock as a Group (4
      persons)
      12,078,166
      58.4%


|(1) | Beneficial ownership is determined in accordance with the
      rules of the Securities and Exchange Commission and generally includes
      voting or investment power with respect to securities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                    
|(2) | The persons named in the table have sole voting and
      investment power with respect to all shares of common stock shown as
      beneficially owned by them.                                   
|    |                                                                                                                                                                                                    
|(3) | A total of 351,500 of these shares are held by Stan Ross.
      The remaining 1,836,666 shares are held by Fortune Capital Management
      (USA) Inc., a company wholly owned by Stan
Ross.       

---

33

At its annual meeting of stockholders held on December 4, 2000, a 2000 Incentive Stock Option Plan (the Plan) was approved by the Companys stockholders.  Pursuant to a directors resolution dated October 20, 2000, the Plan was
adopted by the Companys directors subject only to receipt of stockholder approval. The plan authorizes the granting of options to purchase up to 1,500,000 of the Companys common shares. Pursuant to the Plan, options may be granted to
directors, officers, employees, consultants and other service providers. The aggregate fair market value of options that may be held by any one optionee at any given time may not exceed $100,000. The exercise price of an option granted must be
at least equal to the fair market value of a share of common stock of the Company on the date the option is granted. No options have yet been granted pursuant to the Plan, to directors or officers of the Company or to any other entities.

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to a management agreement made effective as of November 1, 1997, the Company pays $2,500 per month to MCS Management Ltd., a company wholly owned by Ms. Marlene C. Schluter, director, secretary and treasurer of the Company, for
management services provided to the Company by MCS Management Ltd.

Pursuant to a management agreement made effective as of July 1, 1999, the Company pays $2,500 per month to Netgain Management Solutions Inc., a company wholly owned by Mr. Chad D. Lee, president and director of the Company, for management
services provided to the Company by Netgain Management Solutions Inc.

During the period covered by this report the Company issued a total of 1,415,000 shares of its common stock to Fortune Capital Management (USA) Inc. (Fortune). A total of 105,000 of these shares were issued as repayment for a loan
(pursuant to the conversion of a convertible promissory note) and a total of 1,310,000 of these shares were issued to repay accrued debts for consulting services.  See Recent Sales of Unregistered Securities for details.

The Company pays $2,500 per month to Fortune for sales and marketing services under a month to month agreement relating to such services, and reimburses Fortune for expenses incurred in connection with the delivery of those services. See
Marketing Strategies for details.

The Company also borrowed $50,000 from Fortune on May 10, 2005 and secured the loan through the issuance of a convertible promissory note. The loan bears interest at a rate of 10%. See Cash Requirements for details.

The Company has not been a party to any other transactions during the past two years, and is not currently a party to any other transaction, in which any directors, officers or holders of greater than five percent of the Company's securities, or any
immediate family members of any of the foregoing, have any direct or indirect material interest.

---

34

ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

|ExhibitNumber | Description                                                                                                                                                                                      
|------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |                                                                                                                                                                                                  
|3(i) [1]      | Certificate of Incorporation dated May 7, 1997; Certificate
      of Amendment dated October 16, 1997; and Certificate of Amendment dated
      April 8, 1999.                                   
|              |                                                                                                                                                                                                  
|3(ii).1[1]    | Bylaws of Micro Millennium, Inc.                                                                                                                                                                 
|              |                                                                                                                                                                                                  
|3(ii).2[1]    | Resolution of the board of directors approving amendment to
      the By-Laws of Micro Millenium, Inc.                                                                                           
|              |                                                                                                                                                                                                  
|10.1          | Convertible Promissory Note dated May 10, 2005 in favor of
      Fortune Capital Management (USA) Inc.                                                                                           
|              |                                                                                                                                                                                                  
|10.2[2]       | Convertible Promissory Note dated April 25, 2004 in favor
      of Fortune Capital Management (USA) Inc.                                                                                         
|              |                                                                                                                                                                                                  
|10.3[2]       | Consulting Agreement dated November 24, 2003 between the Company
      and Westport Strategic Partners, Inc.                                                                                     
|              |                                                                                                                                                                                                  
|10.4[2]       | Consulting Agreement dated February 23, 2004 between the Company
      and The R.H. Barsom Company Inc.                                                                                          
|              |                                                                                                                                                                                                  
|10.5[2]       | Consulting Agreement dated January 9, 2004 between the Company
      and CEOCast Inc.                                                                                                            
|              |                                                                                                                                                                                                  
|10.6[3]       | 2000 Incentive Stock Option Plan                                                                                                                                                                 
|              |                                                                                                                                                                                                  
|10.7[1]       | Custom Affiliate Agreement between KnowledgeWeb, Inc. and
      the company dated November 8, 1999.                                                                                              
|              |                                                                                                                                                                                                  
|10.8[1]       | Agreement between Netgain Management Solutions Inc. and the
      Company, dated November 1, 1999, for management and administrative services
      provided by Netgain Management Solutions Inc.
|              |                                                                                                                                                                                                  
|10.9[1]       | Purchase Agreement between Sinaloa Gold Corp. and Online 
      Innovation, dated April 2, 1999.                                                                                                 
|              |                                                                                                                                                                                                  
|10.10[1]      | Agreement between MCS Management Ltd. and the Company, dated
      November 1, 1998, for management and administrative services provided by
      MCS Management Ltd.                            
|              |                                                                                                                                                                                                  
|31.1          | Certification of Principal Executive
      Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934                                                                                

---

35

|31.2 | Certification of Principal Financial
      Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934
|---- | -----------------------------------------------------------------------------------------------------------------
|     |                                                                                                                  
|32.1 | Certification of Principal Executive
      Officer Pursuant to 18 U.S.C. Section 1350                            
|     |                                                                                                                  
|32.2 | Certification of Principal Financial
      Officer Pursuant to 18 U.S.C. Section 1350                            

|[1] | Incorporated by reference from the Registration Statement on Form 10SB
      of the Company filed with the Commission on February 1, 2000 as amended.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                      
|[2] | Incorporated by reference from the Companys Form 10KSB filed with
      the Commission on September 28, 2004.                                       
|    |                                                                                                                                                      
|[3] | Incorporated by reference from the Companys Form 10KSB filed with
      the Commission on September 27, 2002.                                       
|    |                                                                                                                                                      
|(b) | Reports on Form 8K                                                                                                                                   

No reports on Form 8-K were filed during the period covered by
  this report.

---

36

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

Moen & Company, Chartered Accountants (Moen & Company), are the Company's independent auditors and examined the financial statements of the Company for the fiscal years ending June 30, 2005 and June 30, 2004. Moen & Company
performed the services listed below and was paid the fees listed below for the fiscal years ended June 30, 2005 and June 30, 2004.

Audit Fees

Moen & Company was paid aggregate fees of approximately $12,000 for the fiscal year ended June 30, 2004 and approximately $12,000 for the fiscal year ended June 30, 2005 for professional services rendered for the audit of the Company's
annual financial statements and for the reviews of the financial statements included in the Company's quarterly reports on Form 10-QSB during these fiscal years.

Audit-Related Fees

Moen & Company was not paid additional fees for either of the fiscal years ended June 30, 2004 or June 30, 2005 for assurance and related services reasonably related to the performance of the audit or review of the Company's financial
statements.

Tax Fees

Moen & Company was not paid any fees for the fiscal year ended June 30, 2004 or for the fiscal year ended June 30, 2005 for professional services rendered for tax compliance, tax advice and tax planning.

All Other Fees

Moen & Company was not paid any other fees for professional services during the fiscal years ended June 30, 2004 and June 30, 2005.

Audit Committee Policies and Procedures

The audit and review services provided to the Company by Moen & Company in the fiscal years ended June 30, 2005 and June 30, 2004 were pre-approved by the Company's audit committee. Prior to engaging Moen & Company to perform audit and
review services, the Company's audit committee reviews the service to be provided and the fee to be paid by the Company for such service and assesses the impact of the service on the auditor's independence.

---

37

SIGNATURES

In accordance with the requirements of 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.

|Date: | September 27, 2005 |  |     | ONLINE INNOVATION, INC.          
|----- | ------------------ |  | --- | ---------------------------------
|      |                    |  |     | (Registrant)                     
|      |                    |  |     |                                  
|      |                    |  |     |                                  
|      |                    |  | By: | /s/ Chad D. Lee                  
|      |                    |  |     | Chad D. Lee, President, Director,
|      |                    |  |     | Principal Executive Officer      
|      |                    |  |     |                                  
|      |                    |  |     |                                  
|      |                    |  | By: | /s/ Marlene C. Schluter          
|      |                    |  |     | Marlene C. Schluter, Director,   
|      |                    |  |     | Principal Financial Officer      

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

|By: /s/
      Chad D. Lee         |                   
|--------------------------------- | ------------------
|Chad D. Lee, President, Director, |                   
|Principal Executive Officer       |                   
|                                  |                   
|Date:                             | September 27, 2005

|By: /s/
      Marlene C. Schluter |                   
|--------------------------------- | ------------------
|Marlene C. Schluter, Director,    |                   
|Principal Financial Officer       |                   
|                                  |                   
|Date:                             | September 27, 2005

---