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, 2002

[ ] 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) 669-7564
                                     --------------
                               Issuer'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 registrant's knowledge, in definitive proxy or

<PAGE>
Page 2

information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

As of June 30, 2002, the registrant did not report any revenues.

As of September 23, 2002, the aggregate market value of the voting common equity
held by non-affiliates of the registrant was $3,274,200 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 23, 2002 the registrant's outstanding common stock consisted of
14,420,000 shares.

                         DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format (Check one):  YES [ ]  NO [X]

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                             ONLINE INNOVATION, INC.

                                   FORM 10KSB
                               TABLE OF CONTENTS

Part   Item(s)                                                          Page No.
----   ------                                                           --------

I        1        Description of Business
         2        Description of Property
         3        Legal Proceedings
         4        Submission of Matters to a Vote of Security Holders
II       5        Market for Common Equity and Related Stockholder Matters
         6        Plan of Operation
         7        Financial Statements
         8        Changes In and Disagreements With Accountants
                    on Accounting and Financial Disclosure
III      9        Directors, Executive Officers, Promoters and Control Persons;
                    Compliance with Section 16(a) of the Exchange Act
        10        Executive Compensation
        11        Security Ownership of Certain Beneficial Owners
                    and Management
        12        Certain Relationships and Related Transactions
        13        Exhibits and Reports on Form 8-K

                  Signatures
                  Certifications
                  Exhibits

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                                     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.

   During the period covered by this report, the Company focused primarily on
completing the development of its website and securing equity financing to fund
its ongoing operations.  Member services components of the website have been
operational for some time, but key components such as e-commerce infrastructure
and other important functional components of the website were only recently
launched. Prior to full launch, the Company offered the website to users without
charge and focused on completing the remaining functional components of the
site.

   Full launch of the website occurred on September 3, 2002. Members who
registered to use the site prior to this date are still permitted to use the
site, but will soon be required to commence paying user fees in order to
continue use. Currently the Company is offering free 10-day trials to
prospective members. After the trial period elapses members will be required to
pay fees to use the site in the manner set out in the section headed principal
products and services. As of September 23, 2001, the website had 39,266
registered members (including members on 10 day trials and members who
registered before September 3, 2002). 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 developed

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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 fully launched on September 3, 2002. Prior to full launch the
website was available for use free of charge and had developed an established
user base of approximately 39,000 members. Members who registered prior to full
launch have been offered 30 days to determine whether to continue as members
and pay to use the site. The Company is currently offering free 10-day trials
and a 30-day introductory special whereby users may purchase a 1-year
membership for $19.95.  Users who registered as members prior to full launch
are being permitted to use the site free of charge for the balance of the 30-day
introductory offer period. After this period expires, these members will be
required to choose one of the membership options available and commence paying
to use the site. 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 $450,000 over the past
2 fiscal years related to the design and development of the website.
Approximately $325,000 was incurred in the fiscal year ended June 30, 2001 and
approximately $125,000 was incurred in the fiscal year ended June 30, 2002.

   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

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to (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.

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   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.

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   Send a Gift
   -----------

   The company intends to combine online dating with online shopping. Once a
member has found that special someone, he or she will be able to send a gift to
that person. Gifts will range from greeting cards or "virtual" bouquets of
flowers that are sent electronically, to merchandise which is 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, future plans to increase the Gallery's
inventory). Within the first year of launch of the e-commerce component of the
site, the Company hopes to develop the site to permit the purchase and delivery
of merchandise.

   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.

   Dear Bridgette
   --------------

   The website will eventually offer members third party love advice,
relationship advice or dating advice through the use of a "Dear Abby" persona
known as Bridgette. Bridgette's one on one advice will only be available to
paying members. Dear Bridgette is currently not available, but the Company is
presently developing this section of the site.

   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 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 intends to
generate revenue through the sale of banner advertising. Banner advertisements
are advertisements which appear on banners on the perimeter of a computer user's

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screen while viewing a website. 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.

   The Company intends to target corporations whose business will enhance the
general spirit of the website so that members will not feel that they are being
blatantly advertised to. General floating banner spots will be made available
to all prospective advertisers throughout the website's pages, but will not be
available in the themed chat rooms. Banner advertisements in the themed chat
rooms will be sold exclusively to corporations that sell products that are
related to the theme of and will directly enhance the atmosphere in the chat
room. For example, the Company intends to create a chat room with a "coffee
house" theme. The Company intends to reserve banner advertisements in the
"coffee house" chat room for corporations that sell coffee related products.
Banner advertising on the website will be sold for $12 per unit. A unit is
1,000 impressions. An impression is an occurrence of a banner advertisement on
a webpage while that webpage is being viewed. Thus, a banner advertisement may
appear for a few seconds or minutes while a person is viewing a webpage and then
be replaced by another advertisement. Each time an advertisement appears is one
impression.

Distribution Method

   The Company's primary means of distribution for its products and services
is the Internet. The Company's primary product is the information and
interactive functions which are contained on the website. The information is
accessible to Internet users who are members.  Merchandise that may eventually
be available through the "Send a Gift" service, once that service is
functioning, will be distributed through the mail or courier services.

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
traditionally not been provided by traditional dating agencies. Finally, the

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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, periodicals are subject to the
same geographic restrictions with respect to the market. 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.
This provides telepersonal matchmaking service providers with a significant
competitive advantage over the Company. 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.

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   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 reports that it has more than
9 million user registrations with an estimated 1.5 million active users
generating more than 100 million monthly page views. Match.com derives the
majority of its revenue from subscription fees and advertising sales.

   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. At the time of purchase, MatchMaker.com reported having
over 4.5 million user registrations. MatchMaker.com derives the majority of its
revenue from subscription fees and advertising sales.

   MatchNet, PLC
   -------------

   MatchNet, PLC considers itself to be 1 of the 3 top online dating and romance
companies worldwide. They report more than 3.6 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 and
SocialNet.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; and, MatchNetFrance.com catering to France. 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.

   Web Portals
   -----------

   Web portals such as Yahoo, AOL and MSN have developed an online dating
presence by hosting personal ads in specific sections of their portals. These
personal ads offer far fewer features and functionality than those offered by
Match.com, Matchmaker.com, MatchNet, PLC's network, and VirtuallyDating.com.

   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.

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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 current lack of
access to the internet by a large segment of the population. 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 as discussed above, it was
only recently fully launched and 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. 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 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

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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 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 4 independent consultants to conduct
ongoing development and maintenance work on the Company's website. These
consultants are currently operating under the direct supervision of the Company.
They are paid on a monthly basis and payment is tied to and based on the
completion of specific tasks or portions of the development work. No written
agreements have been entered into between the Company and the consultants. The
Company has no obligations to the consultants, and the consultants have no
obligations to the Company, beyond the completion of each specified task or
segment of development work.

   The Company also retains the services of a consultant to provide investor
relations and administrative services to the Company. The consultant is paid
$2,500 per month for these services, which include administration and data

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management related to the Company's shareholders, liason with shareholders,
coordinating dissemination of Company news and information to the public and to
shareholders and overseeing shareholder relations and communications.

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.

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, which is
relatively new and is, therefore, difficult to predict in terms of the level of
demand for the Company's products and services. In addition, this market is or
likely will be, 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

<PAGE>
Page 15

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.

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. 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

<PAGE>
Page 16

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 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.

<PAGE>
Page 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

   Use of the Internet by consumers is at an early stage of development, and
market acceptance of the Internet as a medium is 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:

    o   market acceptance of the Internet as a medium for consumers;
    o   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;
    o   the ability of the Company to produce content which will be attractive
        to a sufficient number of users to generate significant revenues;
    o   intense competition from other providers of related content over the
        Internet;
    o   delays or errors in the Company's ability to effect electronic commerce
        transactions;
    o   the Company's ability to upgrade and develop its systems and
        infrastructure in a timely and effective manner;
    o   technical difficulties, and/or system downtime ;
    o   the Company's ability to attract customers at a steady rate and maintain
        customer satisfaction;
    o   seasonality of the industry;
    o   seasonality of advertising sales;
    o   Company promotions and sales programs;
    o   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;
    o   the level of returns experienced by the Company; and
    o   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 telecommunications systems for the operation and quality of its services.

<PAGE>
Page 18

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

   Pursuant to a Lease Agreement between the Company and S&W 97 Enterprises
Ltd. dated effective November 1, 2001, the Company pays a total of $1,600
(Canadian) per month plus G.S.T. for office space. The lease is for a one-year
term with an option to renew for an additional year.  The Company rents a total
of 826 feet of office space pursuant to the lease agreement.

Computer Equipment

The Company owns the following computer equipment:

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

<PAGE>
Page 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.

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 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. 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              Low
--------------------------------------------------------------------------------
June 30, 2000                                       4.25             2.50
--------------------------------------------------------------------------------
September 30, 2000                                  4.06             2.25
--------------------------------------------------------------------------------
December 31, 2000                                   3.80             0.63
--------------------------------------------------------------------------------
March 31, 2001                                      0.85             0.45
--------------------------------------------------------------------------------
June 30, 2001                                       0.60             0.30
--------------------------------------------------------------------------------
September 30,2001                                   0.45             0.27
--------------------------------------------------------------------------------
December 31, 2001                                   0.39             0.23
--------------------------------------------------------------------------------
March 31, 2002                                      0.70             0.35
--------------------------------------------------------------------------------
June 30, 2002                                       0.47             0.38
--------------------------------------------------------------------------------

<PAGE>
Page 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 23, 2002, there were approximately 53 stockholders of
record holding 14,420,000 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

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                     (a)                    (b)                    (c)
                                                 Number of              Weighted Average       Number of
                                                 Securities to be       Exercise Price of      Securities
                                                 Issued upon            Outstanding            Remaining
                                                 Exercise of            Options, Warrants      Available For
Plan Category                                    Outstanding            and Rights             Future Issuance
                                                 Options, Warrants                             Under Equity
                                                 and Rights                                    Compensation
                                                                                               Plans (Excluding
                                                                                               Securities Reflected
                                                                                               in Column (a))
-------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                    <C>                 <C>
Equity Compensation
Plans Approved by                                Nil                       N/A                 1,500,000
Security Holders

-------------------------------------------------------------------------------------------------------------------
Equity Compensation
Plans Not Approved by                            Nil                       N/A                 Nil
Security Holders

-------------------------------------------------------------------------------------------------------------------

TOTAL:                                           Nil                       N/A                 1,500,000
-------------------------------------------------------------------------------------------------------------------
</TABLE>

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

<PAGE>
Page 21

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

No equity securities were sold by the Company during the quarter ended June 30,
2002. Details with respect to equity securities sold by the Company in the
three preceding quarters of the fiscal year ended June 30, 2002 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.

ITEM 6:   PLAN OF OPERATION

GENERAL

   The Company's business is conducted through its website,
www.VirtuallyDating.com. The website was operational for beta testing in
February, 2000 and became operational in July 2000.  At that time the website
was only operational in terms of limited member services, however. The
e-commerce portion of the website and key value added components were not yet
operational. Since the e-commerce portion of the website includes the payment
infrastructure for merchandise and membership fees, the Company did not
initially charge membership fees.

   The e-commerce and other remaining components of the Company's website have
since been completed and the website became fully operational on September 3,
2002.   Prior to full launch the website was available for use free of charge
and had developed an established user base of approximately 39,000 members.
Members who registered prior full launch have been given 30 days to determine
whether to continue as members and pay to use the site. The Company is
currently offering free 10-day trials and a 30-day introductory special in which
users may purchase a 1-year membership for $19.95.  Users who registered as
members prior to full launch are being permitted to use the site free of charge
for the balance of the 30-day introductory offer period. After this period
expires, these members will be required to choose one of the membership options
available and commence paying to use the site. 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.

   With the full launch of the website the Company now intends to focus its
energies on marketing the website in order to develop a paying member base and
generate revenues. The Company is not currently certain, however, exactly what
resources will be devoted to marketing or what steps will be taken in this area.
The Company's current financial resources are limited. The Company will,
therefore, initially be working towards securing 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. Over the next 12 months, depending on resources
available, management anticipates that administrative expenses, ongoing website
maintenance costs, development costs (related to proposed new products) and
marketing will be the Company's primary expenses. Specific marketing strategies

<PAGE>
Page 22

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, 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 chief 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 Company's goal is to capture 50,000 subscribing members in each
of the three years following the launch of the website, for a total of 150,000
members within three years of launch.  The target market for the Company's
service is a single adult, 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 indicated above, the website was launched in July 2000, but the e-commerce
component of the website, which includes the fee payment infrastructure, was not
operational until September 3, 2002. Prior to September 3, 2002, memberships
were offered free of charge. Registered members as of September 3, 2002 were
given 30 days to decide whether to continue as members and pay membership fees.
In addition, 10 day free trials are currently being offered.  As of September
23, 2002, the website had 39,266 registered members (including members on 10 day
trials and members who registered before September 3, 2002). 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

<PAGE>
Page 23

financing over the past fiscal year has limited its ability to spend money on
marketing. 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 year 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. Banner advertisements are small banners which appear on
the perimeter of another Company's website and provide information about the
advertising company. Generally, a link to the advertising company's website
will be provided. 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 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.

<PAGE>
Page 24

Additional Website Development

As discussed above, the Company retains the services of 4 web-programming
consultants to perform maintenance and additional development work. The
consultants work under the Company's direct supervision and are paid by the
Company on a monthly basis. Payment is tied to and based on the completion of
specific tasks. The Company currently intends to continue to develop new
features which will make the website more attractive to prospective members.
Proposed features may include a WebPages entitled "Hey Bartender" which will
provide recipes for alcoholic cocktails. Members will be invited to post their
own favorite recipes on the page. Another section entitled "Postcards From
Stanley" may be created. This section would feature travel reviews of
destinations geared towards singles.

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, 2002. 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 June 25, 2001, the Company entered into a Common Stock Purchase Agreement
(the "Stock Purchase Agreement") with Fusion Capital Fund II, LLC, a Chicago
based institutional investor ("Fusion"). Pursuant to the Stock Purchase
Agreement, subject to certain terms and conditions discussed further below,
Fusion has agreed to purchase $6,000,000 of the Company's common stock. The
stock will be purchased at a rate of $10,000 per trading day, or $200,000 every
20 trading days. The purchase price of the stock will be based on the market
price of the Company's common shares at the time of purchase. under the Stock
Purchase Agreement. The Company is not obligated to commence sales of its
common stock to Fusion and Fusion is not obligated to make any purchases of the
Company's common stock, until the Company has filed a registration statement
under the Securities Act of 1933 with the Securities and Exchange Commission
respecting at least 2,000,000 of the shares of the Company's common stock to be
issued pursuant to the Stock Purchase Agreement. In order to secure the funds
available under the Stock Purchase Agreement, therefore, it will be necessary
for the Company to focus its energies on preparing and filing a registration

<PAGE>
Page 25

statement with the Securities and Exchange Commission.  The Company anticipates
that this process will cost approximately $100,000 and take approximately 6
months to complete.

In order to complete the registration process, the Company will have to secure
intermediate financing. The Company is currently exploring various financing
options. On April 30, 2002, the Company entered into an agreement with Fusion,
pursuant to which the Company may acquire cash advances from Fusion (the "Loan
Agreement"). The cash advances are at Fusion's sole discretion and, if made,
are to be made against stock purchases to be made by Fusion under the Stock
Purchase Agreement. Fusion may require repayment of any advances on demand.
The Company may also repay any advances at any time by providing Fusion with
three days notice of its intention to do so. If the advances are not repaid in
this manner, they may be repaid through the issuance of shares of the Company's
common stock to Fusion in accordance with the terms of the Common Stock Purchase
Agreement. If repaid in such manner, the advances will be treated as advances
against the aggregate value of stock to be purchased by Fusion under the Common
Stock Purchase Agreement. Any purchase of stock under the Common Stock Purchase
Agreement will therefore reduce the outstanding amount of the advances by the
value of common stock purchased. Failure to repay the advances on demand by
Fusion will constitute a default under the Common Stock Purchase Agreement and
may, at Fusion's discretion, result in the termination of the Common Stock
Purchase Agreement.

To date, Fusion has advanced an aggregate of $50,000 to the Company pursuant to
the Loan Agreement. The Company may borrow additional funds from Fusion under
the Loan Agreement without filing a registration statement as outline above.
The Loan agreement should, therefore, provide the Company with a source of
interim financing if necessary as it works towards filing a registration
statement in accordance with the Stock Purchase Agreement.  With the launch of
the website, the Company may also have revenues available to it to finance
further activities.

The Company intends to use available finances to fund ongoing operations. Funds
will be utilized for general and administrative expenses, website maintenance
and development, marketing and expenses related to the filing and preparation of
a registration statement respecting the stock to be issued under the Stock
Purchase Agreement.


<PAGE>
Page 26

ITEM 7:   FINANCIAL STATEMENTS

<PAGE>

                                  MOEN AND COMPANY
                                CHARTERED ACCOUNTANTS

PO Box 10129                                Telephone:             (604)662-8899
1400 - 701 West Georgia Street              Fax:                   (604)662-8809
Vancouver, BC V7Y 1C6                       Email:  moenandcompany@attcanada.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, 2002, and
June 30, 2001, and the related Statements of Income, Retained Earnings, 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Online Innovation, Inc. (A
Delaware Corporation) (A Development Stage Company) as of June 30, 2002 and
2001, and the results of its operations and its cash flows for the years ended
in conformity with accounting principles generally accepted in the United States
of America.


                                                            /s/ Moen and Company

                                                           Chartered Accountants
Vancouver, British Columbia, Canada
August 23, 2002




<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                                      Balance Sheet
                                      June 30, 2002
                                     (In U.S. Dollars)
                         (With Comparative Figures at June 30, 2001)


                                          ASSETS         2002          2001
                                                      -----------   -----------
Current Assets
   Cash                                               $    12,972   $    12,838
   Prepaid expense                                          2,209          -
                                                      -----------   -----------
                                                           15,181        12,838
Deferred Tax Asset (Note 12b(ii) and 13(c))                52,500        52,500
Fixed Assets
   Computer equipment, at cost less accumulated
     depreciation (Note 5)                                 46,256        61,128
Computer Software Development (Note 6(b))
   Application development stage costs                    325,000       400,000
                                                      -----------   -----------
                                                      $   438,937   $   526,466
                                                      ===========   ===========

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable                                   $    46,527   $    24,223
   Management fees payable (Note 4(a))                     52,500         5,000
   Due to related parties (Notes 4(c))                     30,000        30,000
   Loans payable (Note 15)                                 85,000          -
   Advance from Fusion Capital Fund II, L.L.C.
     (Note 17)                                             50,000          -
   Agreement payable - Stratford Internet
     Technologies (Note 6(b))                                -           75,000
                                                      -----------   -----------
                                                          264,027       134,223
                                                      -----------   -----------
Stockholders' Equity
   Capital Stock (Note 3)
   Authorized:
    75,000,000 common shares at $0.001 par value
      per share
   Issued and outstanding - 14,420,000 common
      shares (2001 - 14,595,000 common shares)             14,420        14,595
   Paid in capital in excess of par value of stock      2,218,430     2,300,505
Deficit accumulated during development stage (note 1)  (2,058,214)   (1,922,937)
Cumulative translation adjustment                             274            80
                                                      -----------   -----------
                                                          174,910       392,243
                                                      -----------   -----------
                                                      $   438,937   $   526,466
                                                      ===========   ===========

APPROVED ON BEHALF OF THE BOARD

   /s/ Chad D. Lee             , Director
-------------------------------
   /s/ Marlene C. Schluter     , Director
-------------------------------


              See Accompanying Notes and Independent Auditors' Report

<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                                   Statement of Income
                                     (In U.S. Dollars)

<TABLE>
<CAPTION>
                                       Cumulative From
                                        Inception Date
                                        of Aug 1, 1997                Year Ended                   Three Months Ended
                                          to June 30,                  June 30,                         June 30,
                                                           -----------------------------   -----------------------------
                                              2002             2002             2001             2002             2001
                                         -------------     -------------   -------------   -------------   -------------
<S>                                      <C>               <C>             <C>             <C>             <C>
Administration Costs
   Compensation on stock option          $       150,000   $        -      $        -      $        -      $        -
   Funding agreement commitment costs            345,600            -            345,600            -            345,600
   Depreciation                                   70,398          17,332          32,281           4,082           8,176
   Filing and transfer agent fees                 20,344           2,679           3,555             593             610
   Financing costs                                22,550            -               -               -               -
   Management and consulting fees                507,793          79,207          86,927          17,548          23,860
   Office expenses, net                          151,797          26,680          38,220           5,306           6,408
   Option payment, mineral properties             30,000            -               -               -               -
   Professional fees                             209,183          26,890         104,330           7,836          39,779
   Promotion, investor relations,
    and investor communications                   84,604             327           1,238             100             253
   Computer technology and
    software development-preliminary
    development stage costs                      289,671         (41,084)        103,430           2,727         103,430
   Website marketing/Banner
    advertising costs                            196,744          12,148          72,791           4,366           9,220
   Travel expenses                                32,030          11,098           8,404          (4,358)           -
                                         ---------------   -------------   -------------   -------------   -------------
                                               2,110,714         135,277         796,776          38,200         537,336
Deferred Income Taxes                            (52,500)           -               -               -               -
                                         ---------------   -------------   -------------   -------------   -------------
Net loss for the Period                  $     2,058,214   $     135,277   $     796,776   $      38,200   $     537,336
                                         ===============   =============   =============   =============   =============

Net loss per share, basic and diluted                      $        0.01   $       (0.06)  $        0.00   $       (0.03)
                                                           =============   =============   =============   =============
</TABLE>







              See Accompanying Notes and Independent Auditors' Report

<PAGE>


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


<TABLE>
<CAPTION>
                                       Cumulative From
                                        Inception Date
                                        of Aug 1, 1997                Year Ended                   Three Months Ended
                                          to June 30,                  June 30,                         June 30,
                                                           -----------------------------   -----------------------------
                                              2002             2002             2001             2002             2001
                                         -------------     -------------   -------------   -------------   -------------
<S>                                      <C>               <C>             <C>             <C>             <C>
Cash Provided by (Used For)
Operating Activities
   Net loss for the period               $    (2,058,214)  $    (135,277)  $    (796,776)  $     (38,200)  $    (537,336)
   Items not requiring use of cash:
    Shares issued for funding agreement
      commitment costs                           345,600            -            345,600            -            345,600
    Shares issued for services,
      (shares cancelled)                          11,750         (82,250)         94,000            -             94,000
    Depreciation                                  70,398          17,332          32,281           4,082           8,176
    Compensation on stock options                   -               -               -               -               -
    Cumulative translation adjustment                274             194             592            -               -
   Changes in non-cash working capital
     items
    Deferred income tax                          (52,500)           -               -               -               -
    Prepaid expense                               (2,209)         (2,209)          1,343            -              1,325
    Accounts payable                              99,027          69,804           6,016           4,046           9,626
    Agreement payable                               -            (75,000)        (25,000)           -               -
                                         ---------------   -------------   -------------   -------------   -------------
                                              (1,585,874)       (207,406)       (341,944)        (30,072)        (78,609)
                                         ---------------   -------------   -------------   -------------   -------------
Investing Activities
   Computer software development
    Application development stage costs         (325,000)         75,000            -               -               -
   Fixed assets purchased                       (116,654)         (2,460)         (7,056)           -             (7,056)
                                         ---------------   -------------   -------------   -------------   -------------
                                                (441,654)         72,540          (7,056)           -             (7,056)
                                         ---------------   -------------   -------------   -------------   -------------
Financing Activities
   Capital stock subscribed                    1,875,500            -            237,500            -             37,500
   Loan payable                                   85,000          85,000            -            (15,000)           -
   Due to Fusion Capital                          50,000          50,000            -             50,000            -
   Due to related parties                         30,000            -             30,000            -               -
                                         ---------------   -------------   -------------   -------------   -------------
                                               2,040,500         135,000         267,500          35,000          37,500
                                         ---------------   -------------   -------------   -------------   -------------

Increase (Decrease) in Cash
  during the period                               12,972             134         (81,500)          4,928         (48,165)
Cash, Beginning of Period                           -             12,838          94,338           8,044          61,003
                                         ---------------   -------------   -------------   -------------   -------------
Cash, End of Period                      $        12,972   $      12,972   $      12,838   $      12,972   $      12,838
                                         ===============   =============   =============   =============   =============
</TABLE>


              See Accompanying Notes and Independent Auditors' Report

<PAGE>


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

<TABLE>
<CAPTION>
                                       Cumulative From
                                        Inception Date
                                        of Aug 1, 1997                Year Ended                   Three Months Ended
                                          to June 30,                  June 30,                         June 30,
                                                           -----------------------------   -----------------------------
                                              2002             2002             2001             2002             2001
                                         -------------     -------------   -------------   -------------   -------------
<S>                                      <C>               <C>             <C>             <C>             <C>
Balance (Deficit), Beginning of Period   $          -      $  (1,922,937)  $  (1,126,161)  $  (2,020,014)  $  (1,385,601)

Net loss for the period                       (2,058,214)       (135,277)       (796,776)        (38,200)       (537,336)
                                         ---------------   -------------   -------------   -------------   -------------

Balance (deficit), end of period         $    (2,058,214)  $  (2,058,214)  $  (1,922,937)  $  (2,058,214)  $  (1,922,937)
                                         ===============   =============   =============   =============   =============
</TABLE>









              See Accompanying Notes and Independent Auditors' Report

<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                            Statement of Stockholders' Equity
               From Date of Inception on August 1, 1997 to June 30, 2002
                                     (In U.S. Dollars)

<TABLE>
<CAPTION>
===================================================================================================================================
                                          Number of                Additional      Total     Retained    Cumulative      Total
                                           Common        par         Paid-in      Capital    Earnings    Translation  Stockholders'
                                           Shares       Value        Capital       Stock     (Deficit)    Adjustment     Equity
                                       --------------------------------------------------------------------------------------------
<S>                                    <C>          <C>           <C>           <C>           <C>           <C>        <C>
  Net loss for eleven month period
   ended June 30, 1998                                                                        $  (144,175)             $  (144,175)
  Issued for cash, @$0.01
   October 23, 1997                     1,500,000   $     1,500   $    13,500   $    15,000                                 15,000
  Issued for cash, @$0.001
   May 8, 1997                            500,000           500                         500                                    500
  Issued for assignment of option
   on mineral properties, @$0.0035
   September 30, 1997                   8,500,000         8,500        21,500        30,000                                 30,000
                                       --------------------------------------------------------------------------------------------
                                       10,500,000        10,500        35,000        45,500      (144,175)                 (98,675)
  Shares subscribed and fully paid
   and issued, @$0.50
   April 6, 1999                           85,000            85        42,415        42,500                                 42,500
                                       --------------------------------------------------------------------------------------------
Balance, June 30, 1998                 10,585,000        10,585        77,415        88,000      (144,175)                 (56,175)
  Net loss for year ended June 30,
   1999                                                                                          (478,497)                (478,497)
  Compensation on stock options                                       120,000       120,000                                120,000
  Cumulative translation adjustment                                                                         $ (1,055)       (1,055)
  Issued for cash, @$0.50
   April 6, 1999                           20,000            20         9,980        10,000                                 10,000
  Issued for cash, @$0.50
   April 6, 1999                          100,000           100        49,900        50,000                                 50,000
  Issued for private business
   (note 7), @$0.50 April 2, 1999         400,000           400       199,600       200,000                                200,000
  Issued for cash(note 14), @$0.50
   April 15, 1999                       1,600,000         1,600       798,400       800,000                                800,000
                                       --------------------------------------------------------------------------------------------
Balance, June 30, 1999                 12,705,000        12,705     1,255,295     1,268,000      (622,672)    (1,055)      644,273
  Cumulative translation adjustment                                                                              543           543
  Shares subscribed and fully paid,
   @$0.50 January 4, 2000                 450,000           450       224,550       225,000                                225,000
  Net loss for year
    ended June 30, 2000                                                                          (503,489)                (503,489)
  Issued for exercise of
   option @ $0.50
   March 13, 2000                         100,000           100        49,900        50,000                                 50,000
  Compensation on stock options                                        30,000        30,000                                 30,000
  Exercise of warrants @ $0.50
   May 9, 2000                             50,000            50        24,950        25,000                                 25,000
  Exercise of warrants @ $0.60
   June 16, 2000                           66,667            67        39,933        40,000                                 40,000
                                       --------------------------------------------------------------------------------------------
Balance, June 30, 2000                 13,371,667        13,372     1,624,628     1,638,000    (1,126,161)      (512)      511,327
  Exercise of warrants @$0.60
   August 17, 2000                         83,333            83        49,917        50,000                                 50,000
  Exercise of warrants @$0.60
   February 9, 2001                       250,000           250       149,750       150,000                                150,000
  Issued for services at an ascribed
   price of $0.47 per share on
   June 11, 2001                          200,000           200        93,800        94,000                                 94,000
  Issue for cash, @$0.75
   June 19, 2001                           50,000            50        37,450        37,500                                 37,500
  Issued as commitment shares at an
   ascribed price of $0.54 per share
   on June 25, 2001                       640,000           640       344,960       345,600                                345,600
  Net loss for year ended June 30,
   2001                                                                                          (796,776)                (796,776)
  Cumulative translation adjustment                                                                              592           592
                                       --------------------------------------------------------------------------------------------
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 translation adjustment                                                                              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
                                       ============================================================================================
</TABLE>

              See Accompanying Notes and Independent Auditors' Report

<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)

Note 1.   BUSINESS OPERATIONS

          a)   The Company was incorporated on May 7, 1997 under the Company Act
               of the State of Delaware, U.S.A. and commenced inception of
               business on August 1, 1997. The Company changed it's name from
               Micro Millennium, Inc. to Sinaloa Gold Corp. on October 16, 1997
               and subsequently changed it's name from Sinaloa Gold Corp. to
               Online Innovation, Inc. on April 8, 1999.

          b)   The Company is in its development stage in the internet/e-
               commerce industry as a website development company and was
               previously in the mining resource industry and has not generated
               any revenues from its planned operations. The deficit has been
               accumulated during the development stage.

Note 2.   SIGNIFICANT ACCOUNTING POLICIES

          a)   Administration Costs

               Administration costs are written off to operations when incurred.

          b)   Translation of Foreign Currency

               The functional currency of the Company is the Canadian Dollar and
               the reporting currency is the United States Dollar.

               The assets, liabilities, and operations of the Company are
               expressed in the functional currency of the Company, the Canadian
               Dollar, in conformity with US GAAP, before they are translated
               into the reporting currency, the United States Dollar.

               Monetary assets and liabilities are translated at the current
               rate of exchange.

               The weighted average exchange rate for the period is used to
               translate revenue, expenses, and gains or losses from the
               functional currency to the reporting currency.

               The gain or loss on translation is reported as a separate
               component of stockholders' equity and not recognized in net
               income. Gains or losses on re-measurement are recognized in
               current net income.

               Gains or losses from foreign currency transactions are recognized
               in current net income.

               Fixed assets are measured at historical exchange rates that
               existed at the time of the transaction.

               Depreciation is measured at historical exchange rates that
               existed at the time the underlying related asset was acquired.

               An analysis of the changes in the cumulative translation
               adjustment as disclosed as part of stockholders' equity, is as
               follows:


                                                             Year Ended
                                                               June 30,
                                                      -------------------------
                                                          2002          2001
                                                      -----------   -----------
               Beginning balance, June 30,
                 2001 & 2000                          $        80   $      (512)
               Changes during the year                        194           592
                                                      -----------   -----------
               Ending balance, June 30, 2002 & 2001   $       274   $        80
                                                      ===========   ===========

<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)

Note 2.   SIGNIFICANT ACCOUNTING POLICIES (cont'd)

               Capital accounts are translated at their historical exchange
               rates when the capital stock is issued.

               The effect of exchange rate changes on cash balances is reported
               in the statement of cash flows as a separate part of the
               reconciliation of change in cash and cash equivalents during the
               year.

         (c)   Amortization of Computer Software
               Development - Application Development Stage Costs

               The company is in the application development stage relating to
               the development of computer software, and accordingly, costs are
               capitalized. When the company is in the post-implementation /
               operation stage, costs will be expensed as incurred.

               Amortization of computer software costs of $325,000 will commence
               when the software service is available to be marketed. The
               amortization period is for twenty-six months on a straight-line
               basis. The software is not available to be marketed as at June
               30, 2002, and therefore no amortization of this cost has been
               charged to operations for the period ended June 30, 2002.

Note 3.   CAPITAL STOCK

          a)   Authorized: 75,000,000 common shares at $0.001 par value per
               share.

          b)   Common shares issued and outstanding are as follows:
                                                       Shares           $
                                                  -------------   -------------
                 Balance, June 30, 2001              14,595,000   $   2,315,100
                   Cancelled on August 23, 2001        (175,000)        (82,250)
                                                  -------------   -------------
                 Balance, June 30, 2002              14,420,000   $   2,232,850
                                                  =============   =============

          c)   Options for National Financial Communication Group, and Fordee
               Management Company. (See Note 13(b) and Note 14)

Note 4.   RELATED PARTY TRANSACTIONS

          (a)   (i)     Pursuant to a management agreement effective November 1,
                        1998, 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. Unpaid management fees, as at
                        June 30, 2002, total $27,500.

                (ii)    Pursuant to a management agreement effective 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, Chief Financial Officer, CEO,
                        and Director of the Company. Unpaid management fees, as
                        at June 30, 2002, total $25,000

          (b)   Directors and Officers of the Company are beneficial owners of
                common shares of the Company, as follows, at June 30, 2002:

                    Chad D. Lee             5,500,000 common shares
                    Marlene C. Schluter     2,500,000 common shares
                                            ---------
                                            8,000,000
                                            =========

<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)



Note 4.   RELATED PARTY TRANSACTIONS (cont'd)

          (c)    Loans to the Company unpaid as at June 30, 2002 are as follows:

                              Chad D. Lee            $   20,000
                              Marlene C. Schluter        10,000
                                                     ----------
                                                     $   30,000
                                                     ==========

                 These loans are non interest bearing, are unsecured, and have
                 no specific terms of repayment.


Note 5.   FIXED ASSETS - COMPUTER EQUIPMENT

          The Company depreciates its computer equipment using the declining-
          balance basis at the rate of 30% per annum.

          The cost and accumulated depreciation are as follows:

                                                               June 30,
                                                      -------------------------
                                                          2002          2001
                                                      -----------   -----------
              Cost                                    $   116,654   $   114,194
              Accumulated depreciation                    (70,398)      (53,066)
                                                      -----------   -----------
              Net balance                             $    46,256   $    61,128
                                                      ===========   ===========

Note 6.  COMPUTER TECHNOLOGY AND WEBSITE COSTS

          a)   Acquisition From Online Innovation

               i)     The Company by resolution dated April 2, 1999, acquired
                      from Online Innovation, a non-reporting private Canadian
                      unincorporated entity, 100% interest in all of its
                      proprietary and intellectual property associated with its
                      business plan and concepts and its world wide web site
                      domain name: www.virtuallydating.com.

               ii)    Consideration for this purchase is the issuance of 400,000
                      common shares of the Company at a price of $0.50 per
                      share. These shares were issued on June 2, 1999 and the
                      amount of $200,000 has been included as an expense of
                      operations for the year ended June 30, 1999.

               iii)   Online Innovation has not had any historical revenue or
                      expenses; it also has no liabilities and the only asset is
                      a business plan and concepts and the abovementioned world
                      wide web site domain name.

          b)   Computer Software Costs capitalized

               By agreement dated July 30, 1999 between the Company and
               Stratford Internet Technologies ("Stratford"), Stratford had been
               engaged to create, maintain, upgrade and supply artwork, computer
               files, and coding for a website at www.virtuallydating.com for
               the amount of $400,000 US, less unpaid amount of $75,000 reversed
               in these financial statement for the quarter ended September 30,
               2001, due to bankruptcy of Stratford, for a net amount of
               $325,000, which is capitalized in these financial statements.


<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)

Note 7.   LEASE OBLIGATIONS

          Lease of Premises

          The Company entered into leases for offices located at #118-1118 Homer
          Street, Vancouver and #119-1118 Homer Street, respectively, effective
          November 1, 2001 with S & W 97 Enterprises Ltd. for the term of one
          year for monthly rent and costs of CAD$ 900 and CAD$ 700,
          respectively, with options to renew the leases for a further term of
          one year, each.

Note 8.   COMPENSATION/STOCK OPTION/DEFERRED COMPENSATION ARRANGEMENT

          a)   At the Annual General Meeting of the Company, the 2000 Incentive
               Stock Plan was approved that provides for the grant, at the
               discretion of the Board of Directors, or a Committee appointed by
               it, of options and rights to purchase an aggregate of not to
               exceed 1,500,000 common shares of common shares of the Company to
               officers, directors, employees and consultants of the Company.

          b)   There are no liabilities for pension costs at June 30, 2002.

Note 9.   NET LOSS PER SHARE

          Net loss per common share is computed by dividing net loss by the
          weighted average of shares outstanding during the period.

Note 10.  INCOME TAXES

          The Company has losses carried forward to future years of $2,110,714.
          The potential tax benefit has not been recorded, as an equivalent
          reserve has been provided due to uncertainty of application of the
          losses.

Note 11.  FINANCIAL INSTRUMENTS

          The Company's financial instruments consist of cash, accounts payable,
          loans payable, and due to related parties. It is management's opinion
          that the Company is not exposed to significant interest, currency or
          credit risks arising from these financial instruments. The fair value
          of these financial instruments approximates their carrying values.

Note 12.  CONSULTING AGREEMENTS

          National Financial Communications Corp.

          (a)  By agreement dated February 1, 2000, the company engaged National
               Financial Communications Corp., an arm's length company, to
               render public relations and communication services for a period
               of one year commencing February 1, 2000 and terminating February
               1, 2001, at $10,000 per month. The amount of $20,000 has been
               incurred to March 31, 2000. By mutual agreement the services were
               suspended in April 2000. As part of the agreement, National
               Financial Communications Corp. is granted options on February 1,
               2000 to purchase shares of the company, exercisable, commencing
               February 1, 2000, and expiring January 31, 2003. February 1, 2000
               is the measurement date and the vesting date. There are five
               options for 50,000 shares each at prices of $2.00, $3.00, $4.00,
               $5.00, $7.00 per share, respectively.


<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)

Note 12.  CONSULTING AGREEMENTS (cont'd)

          (b)  The compensation of $30,000 was expensed in the year ended June
               30, 2000. The options are nonforfeitable.

               Option price of 50,000 shares at $2.00 per share     $   100,000
               Market price at date of issuance of option -
                50,000 shares at $2.60                                  130,000
               Compensation added to paid-in capital                $    30,000
                                                                    -----------
               Deferred income tax - 35% of $30,000                 $    10,500
                                                                    ===========

Note 13.  FORDEE MANAGEMENT COMPANY

          a)   As at February 2, 1999 the Company granted to Fordee Management
               Company with stock options to purchase 400,000 common share of
               the Company at a price of $0.20 per share with the expiry date of
               October 3, 2002. These options are outstanding as at June 30,
               2002.

          b)   Fordee Management Company is an unrelated third party

          c)   The compensation of $120,000 applicable to issuance of this
               option was expensed in the year ended June 30, 1999, and was
               added to paid-in capital, computed as follows:

                 Option price of 400,000 shares at $0.20 per share  $    80,000
                 Market price at date of issuance of option
                 400,000 shares at $0.50 per share                      200,000
                                                                    -----------
                 Compensation added to paid-in capital              $   120,000
                                                                    ===========

                 Deferred income tax - 35% of $120,000              $    42,000
                                                                    ===========

Note 14.  COMMON STOCK PURCHASE AGREEMENT WITH FUSION CAPITAL FUND II, LCC

          On June 25, 2001, Online Innovation, Inc. entered into a Common Stock
          Purchase Agreement with Fusion Capital Fund II, LLC, a Chicago based
          institutional investor. Pursuant to the Agreement, and subject to
          certain terms and conditions, Fusion has agreed to purchase $6,000,000
          of the Company's common stock. The stock will be purchased at a rate
          of $10,000 per trading day, or $200,000 every 20 trading days. The
          purchase price of the stock will be based on the market price of the
          Company's common shares at the time of purchase.

          The Company will have the right to decrease the daily purchase rate of
          $10,000 at any time. In the event of such a decrease, it will also
          have the right to increase the daily purchase rate back to $10,000 at
          any time. In addition, if the closing price of the Company's shares is
          above $3.00 for five consecutive trading days, the Company will have
          the right to increase the daily purchase rate above $10,000. If the
          Company chooses to increase the daily purchase rate above $10,000 and
          the closing price of the Company's shares falls below $3.00, the daily
          purchase rate will be reduced to $10,000. The Company may, at any
          time, suspend purchases under the Agreement. In addition, no purchase
          will be made if such purchase would cause Fusion, together with any of
          its affiliates, to own in excess of 9.9% of the Company's common
          stock.

          The Company will not be obligated to sell and Fusion will not be able
          to purchase any common stock under the Agreement if the purchase price
          for the stock (based on the market price of the Company's shares at
          the time of purchase) would be less than $0.75. The Company may, at
          its discretion, increase this "floor price". The Company may also,
          with the consent of Fusion, decrease the floor price. Fusion is
          prohibited, during the term of the Agreement, from effecting any short
          sales of the Company's common stock or entering into any hedging
          transaction which establishes a net short position with respect to the
          Company's common stock.

<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)



Note 14.  COMMON STOCK PURCHASE AGREEMENT WITH FUSION CAPITAL FUND II, LCC
          (cont'd)

          As consideration for entering into the Agreement, the Company has
          agreed to issue 640,000 shares of its common stock to Fusion. In
          addition, the Company has agreed to issue to Fusion share purchase
          warrants entitling Fusion to purchase up to 320,000 shares of the
          Company's common stock at a price of $0.75. The warrants are
          exercisable for a period of 5 years from the date of issue. Subject
          to certain conditions, Fusion has agreed not to transfer or sell any
          of these shares for 600 trading days from the date of the Agreement.

          Under the Agreement, the Company is not obligated to commence sales of
          its common stock to Fusion, and Fusion is not obligated to make any
          purchases of the Company's common stock, until the Company has filed a
          registration statement under the Securities Act of 1933 with the
          Securities and Exchange Commission respecting at least 2,000,000 of
          the shares of the Company's common stock to be issued pursuant to the
          Agreement. The registration statement must also register the 640,000
          commitment shares issued by the Company and any shares to be acquired
          by Fusion pursuant to the exercise of the warrants described above.

          The Company intends to use the proceeds of the financing to fund
          ongoing operations. Funds will be utilized for general and
          administrative expenses, ongoing development of the Company's internet
          based products and services and for marketing of those products and
          services.

          The 640,000 commitment shares are recorded as issued at an ascribed
          price of $0.54 per share for $345,600, as at the preceding fiscal year
          ended June 30, 2001.

Note 15.  LOANS PAYABLE

          Summary:
          --------

           Progressive Contracting Ltd.        $   30,000
           CK Dragon Trust                         15,000
           Richard L. Coglon                       40,000
                                               ----------
                                               $   85,000
                                               ==========

          (a)  The Company received Convertible Bridge Financing from
               Progressive Contracting Ltd. of $30,000 and this loan is secured
               by a Promissory Note dated August 29, 2001, with interest
               payable of 10% per annum, maturing August 31, 2002.

                The Promissory Note has conversion terms, as follows:

               (i)     After August 31, 2002 (the "Maturity Date"), Progressive
                       Contracting Ltd. shall have the right, at his option, on
                       or after the Maturity Date to convert the principal
                       amount of this Note, together with all accrued interest
                       thereon in accordance with the provisions of and upon
                       satisfaction of the conditions contained in this Note,
                       into fully paid and nonassessable shares of the
                       Company's Common Stock at a conversion price of $0.30
                       per share (the "Conversion Shares").

               (ii)    The conversion rights of Progressive Contracting Ltd.
                       set forth in this Section may be exercised only on the
                       "Maturity Date" and at any time thereafter but prior to
                       payment in full of the principal amount of and accrued
                       interest on this Note.

               The directors and officers of Progressive Contracting Ltd. are
               arm's length third parties.


<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)

Note 15.  LOANS PAYABLE (cont'd)

          (b)  The Company received Convertible Bridge Financing from CK Dragon
               Trust of $30,000 and this loan is secured by a Promissory Note
               dated November 7, 2001, with interest payable of 10% per annum,
               maturing April 7, 2002.

               The Promissory Note has conversion terms, as follows:

               (i)     After April 7, 2002 (the "Maturity Date"), CK Dragon
                       Trust shall have the right, at their option, on or after
                       the Maturity Date to convert the principal amount of the
                       Note, together with all accrued interest thereon in
                       accordance with the provisions of and upon satisfaction
                       of the conditions contained in this Note, into fully paid
                       and non-assessable shares of the Company's Common Stock
                       at a conversion price of $0.20 per share (the "Conversion
                       Shares").

               (ii)    The conversion rights of CK Dragon Trust set forth in
                       this Section may be exercised only on the "Maturity Date"
                       and at any time thereafter but prior to payment in full
                       of the principal amount of and accrued interest on this
                       Note.

                       CK Dragon Trust is not a director or officer of the
                       Company and is an arm's length third party.

               On May 24, 2002, the note holder and the Company have agreed to a
               payment schedule to retire the debt as follows:

               (i)     Fifteen thousand dollars ($15,000) of the principal to be
                       paid immediately, plus;

               (iii)   One thousand and five hundred dollars ($1,500)
                       representing the total amount of interest calculated on
                       the note.

               (iv)    The remaining principal balance of fifteen thousand
                       dollars ($15,000) of the note will be paid on or before
                       the Company receives funds from escrow that are
                       contingent on the company launching it's
                       Virtuallydating.com web portal. The remaining balance of
                       fifteen thousand dollars ($15,000) will accrue interest
                       at a rate of 10% per annum beginning on May 21, 2002 and
                       ending on the date when the Company has the ability to
                       retire the debt.

          (c)  The Company received a loan from Richard L. Coglon of $40,000 and
               this loan is secured by a Promissory Note dated January 10, 2002,
               with interest rate payable of 7% per annum, maturing January 10,
               2003.

               The Promissory Note has conversion terms, as follows:

               (i)     After January 10, 2003 (the "Maturity Date"), Richard L.
                       Coglon shall have the right, at his option, on or after
                       the Maturity Date to convert the principal amount of this
                       Note, together with all accrued interest thereon in
                       accordance with the provisions of and upon satisfaction
                       of conditions contained in this Notes into Units, with
                       each unit consisting of one fully paid and non-assessable
                       share of the Company's Common Stock at a conversion price
                       of $0.25 per share, and one share purchase warrant
                       entitling the holder to acquire one additional fully
                       payable and non-assessable common share of the company at
                       a purchase price of $0.25 per share expiring on January
                       10, 2004.

               (ii)    The conversion right of Richard L. Coglon may be
                       exercised only on the "Maturity Date" and at any time
                       thereafter but prior to payment in full of the principal
                       amount and accrued interest on the Promissory Note.

                       Richard L. Coglon is not a director or officer of the
                       Company and is an arm's length third party.

<PAGE>


                                 ONLINE INNOVATION, INC.
                                (A Delaware Corporation)
                             (A Development Stage Company)
                             Notes to Financial Statements
                                      June 30, 2002
                                    (In U.S. Dollars)

Note 16.  CONSULTING AGREEMENT

          A consulting agreement between Damon G. Hoy and the Company is
          effective on June 15, 2002.

          Term of this Agreement
          ----------------------

          The term of this Agreement is for a period of three months form the
          date hereof, and thereafter shall continue in full force and effect
          from month to month, at a remuneration agreed upon between the parties
          as described in "Compensation to the Consultant", unless terminated
          according to the terms of prescribed in the Agreement.

          Compensation to the Consultant
          ------------------------------

          For the Consultant's services under this Agreement, the Company shall
          pay the Consultant a consulting fee in the amount of $2,500 Cdn per
          month. In addition to the payment of the fee, the Company shall
          reimburse the Consultant for all previously authorized expenses
          actually and properly incurred by the Consultant on behalf of the
          Company in carrying out its duties and performing its functions under
          this Agreement and for all such expenses the Consultant shall furnish
          statements and vouchers to the Company prior to reimbursement.

          Reporting by the Contractor
          ---------------------------

          At lease once in every month, the Consultant shall provide to each
          Director such information concerning the Company's businesses and
          activities for the previous month as the Directors may reasonably
          require.

          Termination
          -----------

          This Agreement may be terminated by the Company without prior notice
          if, at any time, the Consultant, while in the performance of its
          duties commits a material breach of provision of this Agreement, is
          unable or unwilling to perform the duties under the Agreement, commits
          fraud or serious neglect or misconduct in the discharge of its duties
          hereunder or becomes bankrupt or make any arrangement or compromise
          with its creditors.

Note 17.  AGREEMENT WITH FUSION CAPITAL FUND II, L.L.C.

          On April 30, 2002, the Company entered into an agreement with Fusion
          Capital Fund II, LLC ("Fusion"), pursuant to which the Company may
          acquire cash advances from Fusion (the "Loan Agreement"). The cash
          advances are at Fusion's sole discretion and, if made, are to be made
          against stock purchases to be made by Fusion under the Common Stock
          Purchase Agreement between the Company and Fusion dated June 25, 2001
          and disclosed in the Company's Form 8K dated July 6, 2001. Fusion may
          require repayment of any advances on demand. The Company may also
          repay any advances at any time by providing Fusion with three days
          notice of its intention to do so. If the advances are not repaid in
          this manner, they may be repaid through the issuance of shares of the
          Company's common stock to Fusion in accordance with the terms of the
          Common Stock Purchase Agreement. If repaid in such manner, the
          advances will be treated as advances against the aggregate value of
          stock to be purchased by Fusion under the Common Stock Purchase
          Agreement. Any purchase of stock under the Common Stock Purchase
          Agreement will therefore reduce the outstanding amount of the advances
          by the value of common stock purchased. Failure to repay the advances
          on demand by Fusion will constitute a default under the Common Stock
          Purchase Agreement and may, at Fusion's discretion, result in the
          termination of the Common Stock Purchase Agreement.

          To date, Fusion has advanced an aggregate of $50,000 to the Company
          pursuant to the Loan Agreement. This amount remains outstanding as of
          June 30, 2002.

<PAGE>
Page 27

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.


                                        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 officer or director:


--------------------------------------------------------------------------------
     Name                   Age                        Position (1)
--------------------------------------------------------------------------------
Chad D. Lee (2)              34              Director, President and CEO
--------------------------------------------------------------------------------

Marlene Schluter (3)         39              Director, Secretary and Treasurer
--------------------------------------------------------------------------------

Harvey H. Cohen (4)          76              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 with operations. Mr.
Lee is also the Principal of CL Communications Group where he has developed and
implemented multi-media marketing strategies for several publicly traded

<PAGE>
Page 28

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. 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.

<PAGE>
Page 29

Involvement in Legal Proceedings

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

    o   a general partner or executive officer of a business against which a
        bankruptcy petition was filed;
    o   convicted in a criminal proceeding or is currently subject to a pending
        criminal proceeding;
    o   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
    o   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.

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

--------------------------------------------------------------------------------
                                                                     Annual
         Name and Principal Position             Year Ended       Compensation
                                                                ----------------
                                                                     Salary
--------------------------------------------------------------------------------

Chad Lee , President & Director                 June 30, 2002        $30,000 (1)
                                                June 30, 2001        $30,000 (1)
                                                June 30, 2000        $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,

<PAGE>
Page 30

director or employee. The Company has no arrangements for the compensation of
directors and officers for their services as directors and officers.

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
23, 2002 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      Percent of
                                           beneficial owner        class (1)
--------------------------------------------------------------------------------

Chad D. Lee                                  5,500,000 (2)           38.1%
(President, Chief Executive Officer
and Director)
61-12411 Jack Bell Drive
Richmond, British Columbia
Canada

--------------------------------------------------------------------------------

Marlene C. Schluter                          2,500,000 (2)           17.3%
(Secretary, Treasurer and Director)
2233 Lillooet Street
Vancouver, British Columbia
Canada

--------------------------------------------------------------------------------

Harvey H. Cohen                                      0 (2)            0.0%
(Vice President and Director)
8278 Tugboat Place
Vancouver, British Columbia
Canada
--------------------------------------------------------------------------------

Directors and Officers as a Group            8,000,000               55.4%
(3 persons)
--------------------------------------------------------------------------------

(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.

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

<PAGE>
Page 31

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.

   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.

ITEM 13:   EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

Exhibit                                                          Sequential Page
Number          Description                                      Number
------          -----------                                      ------

3(i)**      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**   Bylaws of Micro Millennium, Inc.

3(ii).2**   Resolution of the board of directors approving
            amendment to the By-Laws of Micro Millenium, Inc.

10.1        Loan Agreement between the Company and Fusion
            Capital Fund II, LLC dated April 30, 2002

10.2        Consulting Agreement between the Company and Damon
            Hoy dated June 15, 2002

10.3        Convertible Promissory Note dated January 10, 2002
            in favor of Richard L. Coglon

10.4        Convertible Bridge Financing Note dated November 7,
            2001 in favor of CK Dragon Trust

<PAGE>
Page 32

10.5        Convertible Bridge Financing Note dated August 29, 2001
            in favor of Progressive Contracting Ltd.

10.6        2000 Incentive Stock Option Plan

10.7*       Common Stock Purchase Agreement between Fusion Capital Fund
            II, LLC and the Company dated June 25, 2001.

10.8***     Promotion Agreement between Action Stocks, Inc. and the
            Company dated June 11, 2001.

10.9**      Consulting Agreement between National Financial Communications
            Corp. and the Company dated February 1, 2000.

10.10**     Custom Affiliate Agreement between KnowledgeWeb, Inc. and the
            Company, dated November 8, 1999.

10.11**     Lease Agreement between 570679 B.C. Ltd. as Lessor and the
            Company as Lessee, dated November 1, 1999.

10.12**     Agreement between Netgain Management Solutions Inc. and the
            Company, dated November 1, 1999, for management and administrative
            services provided by Netgain Management Solutions Inc.

10.13**     Agreement between 535424 B.C. Ltd., the Company, dated April 1,
            1999, for professional media buying/marketing services provided by
            535424 B.C. Ltd.

10.14**     Agreement between Stratford Internet Technologies, Inc. and the
            Company dated July 30, 1999, for services related to the
            development, design and maintenance of the Company's internet based
            products and services.

10.15**     Purchase Agreement between Sinaloa Gold Corp. and Online Innovation,
            dated April 2, 1999.

10.16**     Option Agreement between Fordee Management Company and the Company,
            dated February 2, 1999.

10.17**     Agreement between MCS Management Ltd. and the Company, dated
            November 1, 1998, for management and administrative services
            provided by MCS Management Ltd.

10.18**     Agreement in Principle between Minera Fuerte Mayo and CL
            Communications Group, dated September 30, 1997.

10.19**     Assignment Agreement between Sinaloa Gold Corp. and CL
            Communications Group, dated September 30, 1997.

<PAGE>
Page 33

99.1        Certificate of Principal Executive Officer

99.2        Certificate of Principal Financial Officer

*     Incorporated by reference from the Company's Form 8-K filed on July 10,
      2001, as amended.

**    Incorporated by reference from the Registration Statement on Form 10SB of
      the Company filed with the Commission on February 1, 2000 as amended.

***   Incorporated by reference from the Company's Form 10KSB filed with the
      Commission on September 28, 2001.

(b)   Reports on Form 8K

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

<PAGE>
Page 34

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 26, 2002             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 26, 2002
    -------------------------------



By: /s/ Marlene C. Schluter
  ---------------------------------
  Marlene C. Schluter, Director,
  Principal Financial Officer

Date:   September 26, 2002
     ------------------------------



<PAGE>
Page 35

                 CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER





I, Chad D. Lee certify that:

1.   I have reviewed this annual report on Form 10-KSB of Online Innovation,
     Inc. (the "Company");

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report; and

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the Company as of, and for, the periods presented in this annual report.

[Items 4, 5 and 6 omitted pursuant to the transition provisions of Release No.
       34-46427.]

Date:   September 26, 2002
    --------------------------------


/s/ Chad D. Lee
------------------------------------
Chad D. Lee, President, Director,
Principal Executive Officer



<PAGE>
Page 36

                 CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER





I, Marlene C. Schluter certify that:

1.   I have reviewed this annual report on Form 10-KSB of Online Innovation,
     Inc. (the "Company");

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report; and

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the Company as of, and for, the periods presented in this annual report.

[Items 4, 5 and 6 omitted pursuant to the transition provisions of Release No.
                 34-46427.]

Date:   September 26, 2002
     -------------------------------


/s/ Marlene C. Schluter
------------------------------------
Marlene C. Schluter, Director,
Principal Financial Officer





<PAGE>
Exhibit 10.1


                                ONLINE INNOVATION, INC.
                             1118 Homer Street, Suite 118
                               Vancouver British Columbia
                                    V6B 6L5 Canada




Fusion Capital Fund II, LLC                                       April 30, 2002
222 Merchandise Mart Plaza, Suite 9-112
Chicago, Illinois 60654

re: ONLINE INNOVATION, INC.
    -----------------------

Gentlemen:

   This letter is being delivered to confirm our understanding with respect to
certain matters under that certain Common Stock Purchase Agreement, dated as of
June 25, 2001 (the "Purchase Agreement"), by and between ONLINE INNOVATION,
INC., a Delaware corporation (the "Company") and FUSION CAPITAL FUND II, LLC
("Fusion"), with respect to the purchase by Fusion of up to $6,000,000 of Common
Stock of the Company. All capitalized terms used in this letter that are not
defined in this letter shall have the meanings set forth in the Purchase
Agreement. The Company and Fusion agree as follows:

   Fusion may, in its sole discretion, make cash advances to the Company
("Prepaid Amount") from time to time as an advance against purchases under the
Purchase Agreement in amounts agreed to by Fusion and the Company. The balance
of the Prepaid Amount will increase as Fusion makes any cash advances to the
Company. The Prepaid Amount will be reduced by the Purchase Amount of any
purchases of Common Stock by Fusion. When the Prepaid Amount is zero, Fusion
shall within three Trading Days of receipt of Purchase Shares pay the
outstanding balance of the Purchase Amount for shares of Common Stock purchased
by Fusion. The Company may at any time repay all or any portion of the Prepaid
Amount upon three Trading Days prior written notice to Fusion, during which
time Fusion shall be entitled to purchase shares of Common Stock under the
Common Stock Purchase Agreement, and Fusion may at any time require the Company
to repay the Prepaid Amount in full. Any failure by the Company to repay the
Prepaid Amount on demand by Fusion shall constitute an Event of Default.

   If Fusion does pay any Prepaid Amount to the Company before the Commencement,
the Company shall sell shares of Common Stock to Fusion as if the Commencement
had occurred, and the shares of Common Stock purchased by Fusion shall be freely
tradable and without restriction under the 1933 Act and shall not bear any
restrictive legend. If the Company cannot deliver shares of Common Stock that
are freely tradable, than the Company shall deliver to Fusion shares of Common
Stock that are "restricted" under the 1933 Act. Any failure by the Company to
deliver to Fusion freely tradable shares of Common Stock upon a purchase by
Fusion at any time shall constitute an Event of Default.

   At any time that the Prepaid Amount is greater than $0.00, (i) the Company
shall not suspend any purchases by Fusion or terminate the Purchase Agreement,
(ii) the amount of the Daily Base Amount shall be $0.00, (iii) Fusion shall have
the right to purchase Common Stock at any time with a Purchase Amount up to the
then outstanding Prepaid Amount, and (iv) the Floor Price shall be such amount
as determined by Fusion.


<PAGE>




   Except as expressly set forth in this letter, the terms of the Purchase
Agreement have not been modified, supplemented or amended in any respect and the
Purchase Agreement remains in full force and effect between the parties hereto.


                                    ONLINE INNOVATION, INC.

                                    By:   /s/ Chad Lee
                                        -----------------------------------
                                    Name:  Chad D. Lee
                                          ---------------------------------
                                    Title:   President / CEO
                                          ---------------------------------


ACKNOWLEDGED AND AGREED:
FUSION CAPITAL FUND II, LLC

By:   /s/Steven G. Martin
   -----------------------------------
      Steven G. Martin
      Managing Member


<PAGE>
Exhibit 10.2

THIS CONSULTING AGREEMENT is effective as of the 15th day of June, 2002.

BETWEEN:

           ONLINE INNOVATION INC., a company duly incorporated under the laws of
           ----------------------
           the State of Delaware, having its Executive Office at 118 - 1118
           Homer Street, Vancouver, British Columbia.

           (the "Company")

                                                                  THE FIRST PART

AND:

           DAMON G. HOY, an individual , having an Office at Suite 501 - 1228
           -------------
           Hamilton Street, Vancouver, British Columbia.

           (the "Consultant")

                                                                 THE SECOND PART

   WHEREAS the Company wishes to retain the Consultant to provide investor
relations and administrative services to the Company and the Consultant has
agreed to provide such services pursuant to the terms of this Agreement.

   NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
premises and mutual covenants and conditions herein contained, the parties
hereto covenant and agree each with the other as follows:

                            Duties of the Consultant
                            ------------------------

1.   The Consultant shall provide the following investor relations and
administrative services to the Company pursuant to the terms and conditions of
this Agreement:

     (a)  administration and data-management of the Company's current
          shareholders;

     (b)  providing liaison with the Company's current, potential and future
          shareholders;

     (c)  co-ordinating the dissemination of news of the Company to the public
          and to shareholders of the Company; and

     (d)  overseeing the development of the Company's shareholder relations plan
          and devising strategies for the further development of the Company's
          shareholder communications plan.

3.   The Consutant shall provide the services contemplated herein faithfully,
diligently, to the best of its abilities and in the best interests of the
Company and shall devote the time necessary to effectively deliver said
services.

<PAGE>
Page 2

4.   The Consultant shall not, except as authorized or required by its duties,
reveal or divulge to any person or companies any of the trade secrets, secret or
confidential operations, processes or dealings or any information concerning the
organization, business, finances, transactions or other affairs of the Company
which may come to its knowledge during the term of this Agreement. This
restriction shall apply after the termination of this Agreement but shall cease
to apply to information or knowledge which may come into the public domain.

                                 Term of This Agreement
                                 ----------------------


5.   The term of this Agreement is for a period of (3) three months from the
date hereof, and thereafter shall continue in full force and effect from month
to month, at a remuneration agreed upon between the parties as described in
"Compensation to the Consultant", unless terminated according to terms
prescribed in this Agreement.

                             Compensation to the Consultant
                             ------------------------------

6.   For the Consultant's services under this Agreement, the Company shall pay
the Consultant a consulting fee in the amount of $2,500 (CDN) per month. In
addition to the payment of the fee, the Company shall reimburse the Consultant
for all previously authorized expenses actually and properly incurred by the
Consultant on behalf of the Company in carrying out its duties and performing
its functions under this Agreement and for all such expenses the Consultant
shall furnish statements and vouchers to the Company prior to reimbursement.

                              Reporting by the Contractor
                              ---------------------------

7.   At least once in every month, the Consultant shall provide to each
Director such information concerning the Company's businesses and activities for
the previous month as the Directors may reasonably require.

                                      Termination
                                      -----------

8.   This Agreement may be terminated by the Company without prior notice if,
at any time, the Consultant, while in the performance of its duties commits a
material breach of a provision of this Agreement, is unable or unwilling to
perform the duties under this Agreement, commits fraud or serious neglect or
misconduct in the discharge of its duties hereunder or becomes bankrupt or makes
any arrangement or compromise with its creditors.

9.   The Company may terminate this Agreement with cause upon giving the
Consultant thirty (30) days' notice and the Consultant may terminate this
Agreement with cause upon giving the Company thirty (30) days' notice.

<PAGE>
Page 3

                                        General
                                        -------

10.  This Agreement may not be assigned by any party except with the written
consent of the other party hereto.

11.  Time shall be of the essence of this Agreement.

12.  This Agreement embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and undertakings, whether
oral or written, relative to the subject matter hereof.

13.  This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.


   IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first above written.

ONLINE INNOVATION INC.

Per:


/s/ Chad Lee
---------------------------------
Authorized Signatory


Per:


/s/ Damon Hoy
---------------------------------
Damon G. Hoy


<PAGE>
Exhibit 10.3

THIS CONVERTIBLE PROMISSORY NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR SUCH
SHARES OF COMMON STOCK NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY
BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE ACT AND APPLICABLE STATE SECURITIES
LAWS, AND WITH THE TERMS AND CONDITIONS HEREOF.

ONLINE INNOVATION, INC.
CONVERTIBLE PROMISSORY NOTE


$40,000.00 USD                                                  January 10, 2002

Online Innovation, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to Richard L. Coglon(the "Holder"),in legal
                                    -----------------
tender of the United States of America, the principal sum of _forty-thousand
dollars ($40,000), twelve (12) months from the date of this Note(January 10,
2003, the "Maturity Date"), and to pay interest thereon at the rate of seven
percent (7%) per annum. Interest shall be computed on the basis of a 365-day
year and the number of actual days elapsed.

   Section 1. Time and Place of Payment. (a) The entire unpaid principal
balance of this Note, together with any accrued and unpaid interest thereon,
shall be due and payable on the Maturity Date. Principal and interest on this
Note shall be paid by wire transfer of immediately available funds or by check
delivered to the Holder's registered address as it appears upon the books of the
Company. Upon the payment in full of this Note, the Holder shall immediately
surrender this Note to the Company at its executive
offices.

   (b) Any payment made under this Note, whether upon acceleration, final
maturity or otherwise, shall be applied first to the payment of any accrued and
unpaid interest and the balance (if any) shall be applied on account of
principal.

   (c) Whenever any payment to be made under this Note shall be due on a
Saturday, Sunday or any day on which banks are required or authorized by law or
regulation to close in New York City (any other day being a "Business Day"),
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case not be included in the computation of interest
accrued.

(d) Notwithstanding any other provision of this Note, in the event that any
portion of the principal amount of this Note is converted into any shares of the

<PAGE>


Company's Common Stock in accordance with the provisions of Section 3 below,
then no interest shall be payable on the portion so converted for the period
following the date of conversion.

   Section 2. Prepayments. The Company shall have the right to prepay this
Note, in whole or in part, at any time upon ten (10) days prior written notice
to the Holder.

Section 3. Conversion.

(a) After January 10, 2003 (the "Maturity Date"), the Holder shall have the
right, at its option, on or after the Maturity Date to convert the principal
amount of this Note, together with all accrued interest thereon in accordance
with the provisions of and upon satisfaction of the conditions contained in this
Note, into fully paid and non-assessable shares of the Company's Common Stock at
a conversion price of $0.25 per share (the "Conversion Shares"), and one share
purchase warrant entitling the holder to acquire one additional fully payable
and non-assessable common share of the company at a purchase price of $0.25 per
share expiring on January 10, 2004.

   (b) The Holder's conversion right set forth in this Section may be
exercised only on the "Maturity Date" and at any time thereafter but prior to
payment in full of the principal amount of and accrued interest on this Note.

   (c) The Holder may exercise the right to convert all or any portion of the
principal amount of this Note only by delivery of (i) this Note and (ii) a
properly completed conversion notice on a Business Day to the Company's
principal executive offices. Such conversion shall be deemed to have been made
immediately prior to the close of business on the Business Day of such delivery
of this Note and the conversion notice (the "Conversion Date"), and the Holder
shall be treated for all purposes as the record holder of the shares of Common
Stock into which this Note is converted as of such date.

   (d) As promptly as practicable after the conversion of this Note, the Company
at its expense shall issue and deliver to the Holder of this Note a stock
certificate or certificates representing the number of Conversion Shares into
which this Note has been converted.

   (e) Upon conversion of this Note and the delivery of the items set forth in
Section 3(d), the Company shall be forever released from all of its obligations
and liabilities under this Note.

   (f) If, prior to the Conversion Date, the Company shall (i) pay a stock
dividend or make a distribution to all holders of Common Stock in shares of its
Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the number of Conversion Shares shall be
proportionately increased or decreased, as the case may be.

<PAGE>


   Section 4. Reservation of Stock Issuable Upon Conversion. At all times
that this Note shall be convertible into shares of Common Stock, the Company
shall reserve and keep available out of its authorized but unissued shares of
Common Stock solely for the purpose of effecting the conversion of this Note
such number of its shares of such Common Stock as shall from time to time be
sufficient to effect the conversion of this Note in full. In the event that the
number of authorized but unissued shares of such Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, then in addition to such other remedies as shall be available to
the Holder, the Company shall promptly take such corporate action as may be
necessary to increase its authorized but unissued shares of such Common stock to
such number of shares as shall be sufficient for such purpose.

Section 5. Transfer Restrictions.

   (a) This Note may not be transferred except upon satisfaction of all of the
requirements of the Act and applicable state securities laws. Without limiting
the generality of the foregoing, the Holder agrees that (i) this Note and the
Conversion Shares have not been registered under the Act and may not be sold or
transferred with-out registration under the Act or unless an exemption from such
registration is available; (ii) the Holder has acquired this Note and will
acquire the Conversion Shares for its own account for investment purposes only
and not with a view toward resale or distribution; (iii) stop transfer
instructions may be placed with the Company's transfer agent or registrar (which
may be the Company) so as to restrict the transfer of this Note and any
Conversion Shares in accordance with the provisions of the Note; and (iv) each
certificate representing any shares of Common Stock into which this Note may be
converted shall be inscribed with the following legend:

        THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY
        STATE SECURITIES LAWS. NEITHER SUCH SECURITIES NOR ANY INTEREST OR
        PARTICIPATION THEREIN MAY BE SOLD, ASSIGNED, OFFERED FOR SALE, PLEDGED,
        HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A
        REGISTRATION STATEMENT FILED UNDER THE ACT AND SUCH LAWS OR PURSUANT TO
        EXEMPTIONS FROM SUCH REGISTRATION.

   Section 6. Loss of Note. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and (in the case of loss, theft or destruction) of indemnification in form and
substance acceptable to the Company in its reasonable discretion, and upon
surrender and cancellation of this Note, if mutilated, the Company shall execute
and deliver a new Note of like tenor and date.

   Section 7. Entire Agreement. This Note represents the entire agreement
and understanding between the parties concerning the subject matter hereof and


<PAGE>


supersede all prior and contemporaneous agreements, understandings,
representations and warranties with respect thereto.

   Section 8. Binding Effect; No Third Party Beneficiaries. All provisions
of this Note shall be binding upon and inure to the benefit of the parties and
their respective heirs, legatees, executors, administrators, legal
representatives, successors, and permitted transferees and assigns. No person
other than the Holder and the Company shall have any legal or equitable right,
remedy or claim under, or in respect of, this Note.

   Section 9. Amendments and Waivers. This Note may be amended, changed or
modified only by a written instrument executed by the Company and the Holder of
this Note. Any waiver of any breach of any of the terms of this Note, and any
consent required or permitted to be given hereunder, shall be effective if in
writing and executed by or on behalf of the Holder of this Note. No waiver of
any breach nor consent to any transaction shall be deemed a waiver of or consent
to any other or subsequent breach or transaction.

   Section 10. Waiver of Presentment, etc. The Company hereby waives presentment
for payment, demand, notice of non-payment, protest and notice of protest, and
hereby agrees to all extensions and renewals of this Note, without notice.

   Section 11. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements and
instruments made and wholly performed and paid in that state, without regard
to its conflicts of law principles.

   Section 12. Headings. The headings used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.

   IN WITNESS WHEREOF, the Company has caused this Note to be signed and
attested to by its duly authorized officers.


ONLINE INNOVATION, INC.                       /s/ RICHARD L. COGLON
                                              -----------------------
                                                  (name of Holder)

By: Online Innovations Inc.        Address:    5060 Pinetree Cr.
    -------------------------                 -----------------------
Name:   Marlene C. Schluter                    West Vancouver BC
      ----------------------                  -----------------------
Title:  Director                               V7W 3B4
      ----------------------                  -----------------------

                                   Signature: /s/ Richard L. Coglon
                                              -----------------------

                                   Title:     -----------------------

<PAGE>


EXHIBIT A

CONVERSION NOTICE
[Cannot exercise prior to January 10 ,2003 (the "Maturity Date")]


(To be signed only upon conversion of this Note)


TO:  ONLINE INNOVATION, INC.

   The undersigned, the registered holder of the 7% Convertible Promissory
Note (the "Note") of Online Innovation, Inc. (the "Company"), hereby surrenders
the Note for conversion into shares of Common Stock of the Company ("Common
Stock") to the extent of $_______ unpaid principal amount of the Note, all in
accordance with the provisions of such Note. The undersigned requests (i) that
a certificate representing shares of Common Stock, bearing the appropriate
legends, be issued to the undersigned, and (ii) if the unpaid principal amount
so converted is less than the entire unpaid principal amount of the Note, that a
new substitute note representing the portion of said unpaid principal amount
that is not so converted be issued in accordance with the provisions of the
Note.

Dated: January 10, 2002.


________________________________________________
(Signature and name of the registered holder)


<PAGE>
Exhibit 10.4



THIS CONVERTIBLE PROMISSORY NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR SUCH
SHARES OF COMMON STOCK NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY
BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE ACT AND APPLICABLE STATE SECURITIES
LAWS, AND WITH THE TERMS AND CONDITIONS HEREOF.

ONLINE INNOVATION, INC.
CONVERTIBLE BRIDGE FINANCING NOTE


$30,000.00 USD                                                  November 7, 2001

Online Innovation, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to CK Dragon Trust(the "Holder"),in legal
tender of the United States of America, the principal sum of thirty-thousand
($30,000), six (6) months from the date of this Note(April 7, 2002, the
"Maturity Date"), and to pay interest thereon at the rate often percent (10%)
per annum. Interest shall be computed on the basis of a365-day year and the
number of actual days elapsed.

   Section 1. Time and Place of Payment. (a) The entire unpaid principal
balance of this Note, together with any accrued and unpaid interest thereon,
shall be due and payable on the Maturity Date. Principal and interest on this
Note shall be paid by wire transfer of immediately available funds or by check
delivered to the Holder's registered address as it appears upon the books of the
Company. Upon the payment in full of this Note, the Holder shall immediately
surrender this Note to the Company at its executive
offices.

   (b) Any payment made under this Note, whether upon acceleration, final
maturity or otherwise, shall be applied first to the payment of any accrued and
unpaid interest and the balance (if any) shall be applied on account of
principal.

   (c) Whenever any payment to be made under this Note shall be due on a
Saturday, Sunday or any day on which banks are required or authorized by law or
regulation to close in New York City (any other day being a "Business Day"),
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case not be included in the computation of interest
accrued.

(d) Notwithstanding any other provision of this Note, in the event that any
portion of the principal amount of this Note is converted into any shares of the
Company's Common


<PAGE>


Stock in accordance with the provisions of Section 3 below, then no interest
shall be payable on the portion so converted for the period following the
date of conversion.

   Section 2. Prepayments. The Company shall have the right to prepay this
Note, in whole or in part, at any time upon ten (10) days prior written notice
to the Holder.

Section 3. Conversion.

(a) After April 7, 2002 (the "Maturity Date"), the Holder shall have the right,
at its option, on or after the Maturity Date to convert the principal amount of
this Note, together with all accrued interest thereon in accordance with the
provisions of and upon satisfaction of the conditions contained in this Note,
into fully paid and non-assessable shares of the Company's Common Stock at a
conversion price of $0.20 per share (the "Conversion Shares").

   (b) The Holder's conversion right set forth in this Section may be exercised
only on the "Maturity Date" and at any time thereafter but prior to payment in
full of the principal amount of and accrued interest on this Note.

   (c) The Holder may exercise the right to convert all or any portion of the
principal amount of this Note only by delivery of (i) this Note and (ii) a
properly completed conversion notice on a Business Day to the Company's
principal executive offices. Such conversion shall be deemed to have been made
immediately prior to the close of business on the Business Day of such delivery
of this Note and the conversion notice (the "Conversion Date"), and the Holder
shall be treated for all purposes as the record holder of the shares of Common
Stock into which this Note is converted as of such date.

   (d) As promptly as practicable after the conversion of this Note, the
Company at its expense shall issue and deliver to the Holder of this Note a
stock certificate or certificates representing the number of Conversion Shares
into which this Note has been converted.

   (e) Upon conversion of this Note and the delivery of the items set forth in
Section 3(d), the Company shall be forever released from all of its obligations
and liabilities under this Note.

   (f) If, prior to the Conversion Date, the Company shall (i) pay a stock
dividend or make a distribution to all holders of Common Stock in shares of its
Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the number of Conversion Shares shall be
proportionately increased or decreased, as the case may be.

   (g) The Company agrees that after April 7, 2002 the Holder shall retain the
right to convert even if the Company indicates its willingness to repay the
loan.

<PAGE>

   Section 4. Reservation of Stock Issuable Upon Conversion. At all times
that this Note shall be convertible into shares of Common Stock, the Company
shall reserve and keep available out of its authorized but unissued shares of
Common Stock solely for the purpose of effecting the conversion of this Note
such number of its shares of such Common Stock as shall from time to time be
sufficient to effect the conversion of this Note in full. In the event that the
number of authorized but unissued shares of such Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, then in addition to such other remedies as shall be available to
the Holder, the Company shall promptly take such corporate action as may be
necessary to increase its authorized but unissued shares of such Common stock to
such number of shares as shall be sufficient for such purpose.

Section 5. Transfer Restrictions.

   (a) This Note may not be transferred except upon satisfaction of all of the
requirements of the Act and applicable state securities laws. Without limiting
the generality of the foregoing, the Holder agrees that (i) this Note and the
Conversion Shares have not been registered under the Act and may not be sold or
transferred with-out registration under the Act or unless an exemption from such
registration is available; (ii) the Holder has acquired this Note and will
acquire the Conversion Shares for its own account for investment purposes only
and not with a view toward resale or distribution; (iii) stop transfer
instructions may be placed with the Company's transfer agent or registrar (which
may be the Company) so as to restrict the transfer of this Note and any
Conversion Shares in accordance with the provisions of the Note; and (iv) each
certificate representing any shares of Common Stock into which this Note may be
converted shall be inscribed with the following legend:

        THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY
        STATE SECURITIES LAWS. NEITHER SUCH SECURITIES NOR ANY INTEREST OR
        PARTICIPATION THEREIN MAY BE SOLD, ASSIGNED, OFFERED FOR SALE, PLEDGED,
        HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A
        REGISTRATION STATEMENT FILED UNDER THE ACT AND SUCH LAWS OR PURSUANT TO
        EXEMPTIONS FROM SUCH REGISTRATION.

   Section 6. Loss of Note. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and (in the case of loss, theft or destruction) of indemnification in form and
substance acceptable to the Company in its reasonable discretion, and upon
surrender and cancellation of this Note, if mutilated, the Company shall execute
and deliver a new Note of like tenor and date.

   Section 7. Entire Agreement. This Note represents the entire agreement
and understanding between the parties concerning the subject matter hereof and
supersede all


<PAGE>


prior and contemporaneous agreements, understandings, representations and
warranties with respect thereto.

   Section 8. Binding Effect; No Third Party Beneficiaries. All provisions
of this Note shall be binding upon and inure to the benefit of the parties and
their respective heirs, legatees, executors, administrators, legal
representatives, successors, and permitted transferees and assigns. No person
other than the Holder and the Company shall have any legal or equitable right,
remedy or claim under, or in respect of, this Note.

   Section 9. Amendments and Waivers. This Note may be amended, changed or
modified only by a written instrument executed by the Company and the Holder of
this Note. Any waiver of any breach of any of the terms of this Note, and any
consent required or permitted to be given hereunder, shall be effective if in
writing and executed by or on behalf of the Holder of this Note. No waiver of
any breach nor consent to any transaction shall be deemed a waiver of or consent
to any other or subsequent breach or transaction.

   Section 10. Waiver of Presentment, etc. The Company hereby waives presentment
for payment, demand, notice of non-payment, protest and notice of protest, and
hereby agrees to all extensions and renewals of this Note, without notice.

   Section 11. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements and
instruments made and wholly performed and paid in that state, without regard to
its conflicts of law principles.

   Section 12. Headings. The headings used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.

   IN WITNESS WHEREOF, the Company has caused this Note to be signed and
attested to by its duly authorized officers.


ONLINE INNOVATION, INC.                               CK DRAGON TRUST
                                                   -------------------------
                                                        (name of Holder)


By:    /s/ Chad Lee                    Address:   P.O. Box 1465
       -------------------                        --------------------------
Name:   Chad D. Lee                               Agoura Hills, California
       -------------------                        --------------------------
Title:  President & CEO                           91376
       -------------------                        --------------------------

                                      Signature:  /s/ Charlene Kalk
                                                  --------------------------
                                      Title:      President
                                                  --------------------------

<PAGE>


EXHIBIT A

CONVERSION NOTICE
[Cannot exercise prior to April 7 ,2002 (the "Maturity Date")]


(To be signed only upon conversion of this Note)


TO:  ONLINE INNOVATION, INC.

   The undersigned, the registered holder of the 10% Convertible Promissory
Note (the "Note") of Online Innovation, Inc. (the "Company"), hereby surrenders
the Note for conversion into shares of Common Stock of the Company ("Common
Stock") to the extent of $_______ unpaid principal amount of the Note, all in
accordance with the provisions of such Note. The undersigned requests (i) that
a certificate representing shares of Common Stock, bearing the appropriate
legends, be issued to the undersigned, and (ii) if the unpaid principal amount
so converted is less than the entire unpaid principal amount of the Note, that a
new substitute note representing the portion of said unpaid principal amount
that is not so converted be issued in accordance with the provisions of the
Note.

Dated:                  , 2002.
      ------------------

________________________________________________
(Signature and name of the registered holder)







<PAGE>
Exhibit 10.5



THIS CONVERTIBLE PROMISSORY NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR SUCH
SHARES OF COMMON STOCK NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY
BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE ACT AND APPLICABLE STATE SECURITIES
LAWS, AND WITH THE TERMS AND CONDITIONS HEREOF.

ONLINE INNOVATION, INC.
CONVERTIBLE BRIDGE FINANCING NOTE


$30,000.00 USD                                                   August 29, 2001
                                                                       ---

Online Innovation, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to   Progressive Contracting Ltd.      (the
                                    ----------------------------------
"Holder"),in legal tender of the United States of America, the principal sum of
thirty thousand dollars ( $30,000), one (1) year from the date of this Note
-----------------------  --------
(August 29, 2002, the "Maturity Date"), and to pay interest thereon at the rate
of ten percent (10%) per annum. Interest shall be computed on the basis of a 360
-day year and the number of actual days elapsed.

   Section 1. Time and Place of Payment. (a) The entire unpaid principal balance
of this Note, together with any accrued and unpaid interest thereon, shall be
due and payable on the Maturity Date. Principal and interest on this Note shall
be paid by wire transfer of immediately available funds or by check delivered to
the Holder's registered address as it appears upon the books of the Company.
Upon the payment in full of this Note, the Holder shall immediately surrender
this Note to the Company at its executive offices.

   (b)   Any payment made under this Note, whether upon acceleration, final
maturity or otherwise, shall be applied first to the payment of any accrued and
unpaid interest and the balance (if any) shall be applied on account of
principal.

   (c)   Whenever any payment to be made under this Note shall be due on a
Saturday, Sunday or any day on which banks are required or authorized by law or
regulation to close in New York City (any other day being a "Business Day"),
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case not be included in the computation of interest
accrued.

(d) Notwithstanding any other provision of this Note, in the event that any
portion of the principal amount of this Note is converted into any shares of the
Company's Common Stock in accordance with the provisions of Section 3 below,

<PAGE>


then no interest shall be payable on the portion so converted for the period
following the date of conversion.

   Section 2. Prepayments. The Company shall have the right to prepay this
Note, in whole or in part, at any time upon ten (10) days prior written notice
to the Holder.

Section 3. Conversion.

(a) After August 29, 2002 (the "Maturity Date"), the Holder shall have the
         -----------------
right, at its option, on or after the Maturity Date to convert the principal
amount of this Note, together with all accrued interest thereon in accordance
with the provisions of and upon satisfaction of the conditions contained in this
Note, into fully paid and non-assessable shares of the Company's Common Stock at
a conversion price of $0.30 per share (the "Conversion Shares").

   (b) The Holder's conversion right set forth in this Section may be exercised
only on the "Maturity Date" and at any time thereafter but prior to payment in
full of the principal amount of and accrued interest on this Note.

   (c) The Holder may exercise the right to convert all or any portion of the
principal amount of this Note only by delivery of (i) this Note and (ii) a
properly completed conversion notice on a Business Day to the Company's
principal executive offices. Such conversion shall be deemed to have been made
immediately prior to the close of business on the Business Day of such delivery
of this Note and the conversion notice (the "Conversion Date"), and the Holder
shall be treated for all purposes as the record holder of the shares of Common
Stock into which this Note is converted as of such date.

   (d) As promptly as practicable after the conversion of this Note, the
Company at its expense shall issue and deliver to the Holder of this Note a
stock certificate or certificates representing the number of Conversion Shares
into which this Note has been converted.

   (e) Upon conversion of this Note and the delivery of the items set forth in
Section 3(d), the Company shall be forever released from all of its obligations
and liabilities under this Note.

   (f) If, prior to the Conversion Date, the Company shall (i) pay a stock
dividend or make a distribution to all holders of Common Stock in shares of its
Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the number of Conversion Shares shall be
proportionately increased or decreased, as the case may be.

   (g) The Company agrees that after August 31, 2002, the Holder shall retain
                                    ----------------
the right to convert even if the Company indicates its willingness to repay the
loan.

<PAGE>


   Section 4. Reservation of Stock Issuable Upon Conversion. At all times
that this Note shall be convertible into shares of Common Stock, the Company
shall reserve and keep available out of its authorized but unissued shares of
Common Stock solely for the purpose of effecting the conversion of this Note
such number of its shares of such Common Stock as shall from time to time be
sufficient to effect the conversion of this Note in full. In the event that the
number of authorized but unissued shares of such Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, then in addition to such other remedies as shall be available to
the Holder, the Company shall promptly take such corporate action as may be
necessary to increase its authorized but unissued shares of such Common stock to
such number of shares as shall be sufficient for such purpose.

Section 5. Transfer Restrictions.

   (a) This Note may not be transferred except upon satisfaction of all of the
requirements of the Act and applicable state securities laws. Without limiting
the generality of the foregoing, the Holder agrees that (i) this Note and the
Conversion Shares have not been registered under the Act and may not be sold or
transferred with-out registration under the Act or unless an exemption from such
registration is available; (ii) the Holder has acquired this Note and will
acquire the Conversion Shares for its own account for investment purposes only
and not with a view toward resale or distribution; (iii) stop transfer
instructions may be placed with the Company's transfer agent or registrar (which
may be the Company) so as to restrict the transfer of this Note and any
Conversion Shares in accordance with the provisions of the Note; and (iv) each
certificate representing any shares of Common Stock into which this Note may be
converted shall be inscribed with the following legend:

        THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY
        STATE SECURITIES LAWS. NEITHER SUCH SECURITIES NOR ANY INTEREST OR
        PARTICIPATION THEREIN MAY BE SOLD, ASSIGNED, OFFERED FOR SALE, PLEDGED,
        HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A
        REGISTRATION STATEMENT FILED UNDER THE ACT AND SUCH LAWS OR PURSUANT TO
        EXEMPTIONS FROM SUCH REGISTRATION.

   Section 6. Loss of Note. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and (in the case of loss, theft or destruction) of indemnification in form and
substance acceptable to the Company in its reasonable discretion, and upon
surrender and cancellation of this Note, if mutilated, the Company shall execute
and deliver a new Note of like tenor and date.

   Section 7. Entire Agreement. This Note represents the entire agreement
and understanding between the parties concerning the subject matter hereof and

<PAGE>

supersede all prior and contemporaneous agreements, understandings,
representations and warranties with respect thereto.

   Section 8. Binding Effect; No Third Party Beneficiaries. All provisions
of this Note shall be binding upon and inure to the benefit of the parties and
their respective heirs, legatees, executors, administrators, legal
representatives, successors, and permitted transferees and assigns. No person
other than the Holder and the Company shall have any legal or equitable right,
remedy or claim under, or in respect of, this Note.

   Section 9. Amendments and Waivers. This Note may be amended, changed or
modified only by a written instrument executed by the Company and the Holder of
this Note. Any waiver of any breach of any of the terms of this Note, and any
consent required or permitted to be given hereunder, shall be effective if in
writing and executed by or on behalf of the Holder of this Note. No waiver of
any breach nor consent to any transaction shall be deemed a waiver of or consent
to any other or subsequent breach or transaction.

   Section 10. Waiver of Presentment, etc. The Company hereby waives presentment
for payment, demand, notice of non-payment, protest and notice of protest, and
hereby agrees to all extensions and renewals of this Note, without notice.

   Section 11. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements and
instruments made and wholly performed and paid in that state, without regard to
its conflicts of law principles.

   Section 12. Headings. The headings used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.

   IN WITNESS WHEREOF, the Company has caused this Note to be signed and
attested to by its duly authorized officers.


ONLINE INNOVATION, INC.                             Milah Ilich
                                             ---------------------------
                                                 (name of Holder)

By: /s/ Chad Lee                   Address:    5591 No. 3 Road
   ---------------------------               ---------------------------

                                               Richmond, BC  V6X 2C7
                                             ---------------------------
Name:   Chad D. Lee
     ------------------------

Title:  President & CEO            Signature:   /s/ Milan Ilich
       ----------------------                ---------------------------
                                   Title:
                                            ----------------------------

<PAGE>


EXHIBIT A

CONVERSION NOTICE
[Cannot exercise prior to August 29 ,2002 (the "Maturity Date")]


(To be signed only upon conversion of this Note)


TO:  ONLINE INNOVATION, INC.

   The undersigned, the registered holder of the 10% Convertible Promissory
Note (the "Note") of Online Innovation, Inc. (the "Company"), hereby surrenders
the Note for conversion into shares of Common Stock of the Company ("Common
Stock") to the extent of $_______ unpaid principal amount of the Note, all in
accordance with the provisions of such Note. The undersigned requests (i) that
a certificate representing shares of Common Stock, bearing the appropriate
legends, be issued to the undersigned, and (ii) if the unpaid principal amount
so converted is less than the entire unpaid principal amount of the Note, that a
new substitute note representing the portion of said unpaid principal amount
that is not so converted be issued in accordance with the provisions of the
Note.

Dated: August 29, 2002


_____________________________________________________
(Signature and name of the registered holder)





<PAGE>



                            ONLINE INNOVATION, INC.

                           2000 STOCK INCENTIVE PLAN

   This 2000 STOCK INCENTIVE PLAN (the "2000 Plan") is hereby established by
Online Innovation, Inc., a Delaware Company (the "Company"), and adopted by its
Board of Directors as of October 20, 2000 (the "Effective Date").

ARTICLE 1

PURPOSES OF THE 2000 PLAN

    1.1   Purposes. The purposes of the 2000 Plan are (a) to enhance the
          --------
Company's ability to attract and retain the services of qualified employees,
officers and directors (including non-employee officers and directors), and
consultants and other service providers upon whose judgment, initiative and
efforts the successful conduct and development of the Company's business
largely depends, and (b) to provide additional incentives to such persons or
entities to devote their utmost effort and skill to the advancement and
betterment of the Company, by providing them an opportunity to participate in
the ownership of the Company and thereby have an interest in the success and
increased value of the Company.

                                      ARTICLE 2

                                    DEFINITIONS

   For purposes of this 2000 Plan, the following terms shall have the meanings
indicated:

    2.1   Affiliated Company. "Affiliated Company" means any "parent Company" or
          ------------------
"subsidiary Company" of the Company, whether now existing or hereafter created
or acquired, as those terms are defined in Sections 424(e) and 424(f) of the
Code, respectively.

    2.2   Board. "Board" means the Board of Directors of the Company.
          -----

    2.3   Cause. "Cause" means, with respect to a Participant's Continuous
          -----
Service, the termination by the Company of such Continuous Service for any of
the following reasons:

      (a)   The continued, unreasonable refusal or omission by the Participant
to perform any material duties required of him or her by the Company if such
duties are consistent with duties customary for the position held with the
Company;

      (b)   Any material act or omission by the Participant involving
malfeasance or gross negligence in the performance of Participant's duties to,
or material deviation from any of the policies or directives of, the Company;

      (c)   Conduct on the part of Participant which constitutes the breach of
any statutory or common law duty of loyalty to the Company; or

      (d)   Any illegal act by Participant which materially and adversely
affects the business of the Company or any felony committed by Participant, as
evidenced by conviction thereof, provided that the Company may suspend
Participant with pay while any allegation of such illegal or felonious act is
investigated.

<PAGE>
Page 2

    2.4   Change in Control. "Change in Control" shall mean (i) the acquisition,
          -----------------
directly or indirectly, after the Effective Date, by any person or group (within
the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) of the beneficial ownership of securities of the Company possessing
more than fifty percent (50%) of the total combined voting power of all
outstanding securities of the Company; (ii) a merger or consolidation in which
the Company is not the surviving entity, and in which securities possessing more
than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to or acquired by a person or persons
different from the persons holding those securities immediately prior to such
merger; (iii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company; (iv) a complete liquidation or dissolution of
the Company; or (v) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to or acquired by a person or persons different from the persons
holding those securities immediately prior to such merger.

    2.5   Code. "Code" means the Internal Revenue Code of 1986, as amended from
          ----
time to time.

    2.6   Committee. "Committee" means a committee of two or more members of the
          ---------
Board appointed to administer the 2000 Plan, as set forth in Section 7.1 hereof.
                                                             -----------

    2.7   Common Stock. "Common Stock" means the Common Stock, $.001 par value,
          -------------
of the Company, subject to adjustment pursuant to Section 4.2 hereof.
                                                  -----------

    2.8   Continuous Service. "Continuous Service" means (i) employment by
          ------------------
either the Company or any parent or subsidiary Company of the Company, or by a
Company or a parent or subsidiary of a Company issuing or assuming a stock
option in a transaction to which Section 424(a) of the Code applies, which is
uninterrupted except for vacations, illness (except for permanent disability,
as defined in Section 22(e)(3) of the Code), or leaves of absence which are
approved in writing by the Company or any of such other employer Companys, if
applicable, (ii) service as a member of the Board of Directors of the Company
until Participant resigns, is removed from office, or Participant's term of
office expires and he or she is not reelected, or (iii) so long as Participant
is engaged as a consultant or service provider to the Company or other Company
referred to in clause (i) above.

    2.9   Disability. "Disability" means permanent and total disability as
          ----------
defined in Section 22(e)(3) of the Code. The Board's determination of a
Disability or the absence thereof shall be conclusive and binding on all
interested parties.

    2.10  Effective Date. "Effective Date" means the date on which the 2000 Plan
          --------------
is adopted by the Board, as set forth on the first page hereof.

    2.11  Exercise Price. "Exercise Price" means the purchase price per share of
          --------------
Common Stock payable upon exercise of an Option.

    2.12  Fair Market Value.  "Fair Market Value" on any given date means the
          ------------------
value of one share of Common Stock, determined as follows:

<PAGE>
Page 3

      (a)   If the Common Stock is then listed or admitted to trading on a
NASDAQ market system or a stock exchange which reports closing sale prices, the
Fair Market Value shall be the closing sale price on the date of valuation on
such NASDAQ market system or principal stock exchange on which the Common Stock
is then listed or admitted to trading, or, if no closing sale price is quoted on
such day, then the Fair Market Value shall be the closing sale price of the
Common Stock on such NASDAQ market system or such exchange on the next preceding
day for which a closing sale price is reported.

      (b)   If the Common Stock is not then listed or admitted to trading on a
NASDAQ market system or a stock exchange which reports closing sale prices, the
Fair Market Value shall be the average of the closing bid and asked prices of
the Common Stock in the over-the-counter market on the date of valuation.

      (c)   If neither (a) nor (b) is applicable as of the date of valuation,
then the Fair Market Value shall be determined by the Board in good faith using
any reasonable method of evaluation, which determination shall be conclusive and
binding on all interested parties.

    2.13  Good Reason. "Good Reason" means with respect to a Participant's
          -----------
voluntary termination of Continuous Service if such termination is the result of
any of the following:

      (a)   A reduction in the amount of his base compensation pay in effect at
the time of a Change in Control;

      (b)   The taking of any action by the Company that would substantially
diminish the aggregate value of the benefits provided the Participant under the
Participant's medical, health, accident, disability insurance, life insurance,
thrift and retirement plans in which he was participating on the date of a
Change in Control, other than any such reduction which is (i) required by law,
(ii) implemented in connection with a general concessionary arrangement
affecting all employees or affecting the group of employees (of which the
Participant is a member) or (iii) generally applicable to all beneficiaries of
such 2000 Plans;

      (c)   A reduction in duties and responsibilities which results in the
Participant no longer having duties customary for the position held with the
Company at the time of a Change in Control; or

      (d)   The Company materially breaches any provision of the Participant's
Stock Option Agreement or Stock Purchase Agreement.

    2.14  Incentive Option. "Incentive Option" means any Option designated and
          -----------------
qualified as an "incentive stock option" as defined in Section 422 of the Code.

    2.15  Incentive Option Agreement. "Incentive Option Agreement" means an
          ---------------------------
Option Agreement with respect to an Incentive Option.

    2.16  NASD Dealer. "NASD Dealer" means a broker-dealer that is a member of
          ------------
the National Association of Securities Dealers, Inc.

    2.17  Nonqualified Option. "Nonqualified Option" means any Option that is
          --------------------
not an Incentive Option. To the extent that any Option designated as an
Incentive Option fails in whole or in part to qualify as an Incentive Option,


<PAGE>
Page 4

including, without limitation, for failure to meet the limitations applicable to
a 10% Stockholder or because it exceeds the annual limit provided for in Section
                                                                         -------
5.6 below, it shall to that extent constitute a Nonqualified Option.
---

   2.18  Nonqualified Option Agreement. "Nonqualified Option Agreement" means an
         ------------------------------
Option Agreement with respect to a Nonqualified Option.

    2.19  Offeree. "Offeree" means a Participant to whom a Right to Purchase has
          -------
been offered or who has acquired Restricted Stock under the 2000 Plan.

    2.20  Option. "Option" means any option to purchase Common Stock granted
          ------
pursuant to the 2000 Plan.

    2.21  Option Agreement. "Option Agreement" means the written agreement
           ----------------
entered into between the Company and the Optionee with respect to an Option
granted under the 2000 Plan.

    2.22  Optionee. "Optionee" means a Participant who holds an Option.
          --------

    2.23  Participant. "Participant" means an individual or entity who holds an
          -----------
Option, a Right to Purchase or Restricted Stock under the 2000 Plan.

    2.24  Purchase Price. "Purchase Price" means the purchase price per share of
          --------------
Restricted Stock payable upon acceptance of a Right to Purchase.

    2.25  Restricted Stock. "Restricted Stock" means shares of Common Stock
          -----------------
issued pursuant to Article 6 hereof, subject to any restrictions and conditions
                   ---------
as are established pursuant to such Article 6.
                                    ----------

    2.26  Right to Purchase. "Right to Purchase" means a right to purchase
          ------------------
Restricted Stock granted to an Offeree pursuant to Article 6 hereof.
                                                   ---------

    2.27  Service Provider. "Service Provider" means a consultant or other
          -----------------
person or entity who provides services to the Company or an Affiliated Company
and who the Board authorizes to become a Participant in the 2000 Plan.

    2.28  Stock Purchase Agreement. "Stock Purchase Agreement" means the written
          ------------------------
agreement entered into between the Company and the Offeree with respect to a
Right to Purchase offered under the 2000 Plan.

    2.29  10% Stockholder. "10% Stockholder" means a person who, as of a
          ----------------
relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of an
Affiliated Company.

                                       ARTICLE 3
                                      ELIGIBILITY
                                      -----------

    3.1   Incentive Options. Officers and other key employees of the Company or
          -----------------
of an Affiliated Company (including members of the Board if they are employees
of the Company or of an Affiliated Company) are eligible to receive Incentive
Options under the 2000 Plan.

<PAGE>
Page 5

    3.2   Nonqualified Options And Rights To Purchase. Officers and other key
          -------------------------------------------
employees of the Company or of an Affiliated Company, members of the Board
(whether or not employed by the Company or an Affiliated Company), and Service
Providers are eligible to receive Nonqualified Options or Rights to Purchase
under the 2000 Plan.

                                          ARTICLE 4
                                         PLAN SHARES
                                         -----------

    4.1   Shares Subject to the 2000 Plan. A total of 1,500,000 shares of Common
          -------------------------------
Stock may be issued under the 2000 Plan, subject to adjustment as to the number
and kind of shares pursuant to Section 4.2 hereof. For purposes of this
                               ------------
limitation, in the event that (a) all or any portion of any Option or Right to
Purchase granted or offered under the 2000 Plan can no longer under any
circumstances be exercised, or (b) any shares of Common Stock are reacquired by
the Company pursuant to an Incentive Option Agreement, Nonqualified Option
Agreement or Stock Purchase Agreement, the shares of Common Stock allocable to
the unexercised portion of such Option or such Right to Purchase, or the shares
so reacquired, shall again be available for grant or issuance under the 2000
Plan.

    4.2   Changes in Capital Structure.  In the event that the outstanding
          ----------------------------
shares of Common Stock are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Board to the
aggregate number and kind of shares subject to this 2000 Plan, and the number
and kind of shares and the price per share subject to outstanding Option
Agreements, Rights to Purchase and Stock Purchase Agreements in order to
preserve, as nearly as practical, but not to increase, the benefits to
Participants.

                                          ARTICLE 5
                                           OPTIONS
                                           -------

    5.1   Option Agreement. Each Option granted pursuant to this 2000 Plan shall
          -----------------
be evidenced by an Option Agreement which shall specify the number of shares
subject thereto, the vesting provisions relating to such Option, the Exercise
Price per share, and whether the Option is an Incentive Option or Nonqualified
Option. As soon as is practical following the grant of an Option, an Option
Agreement shall be duly executed and delivered by or on behalf of the Company to
the Optionee to whom such Option was granted. Each Option Agreement shall
be in such form and contain such additional terms and conditions, not
inconsistent with the provisions of this 2000 Plan, as the Board shall, from
time to time, deem desirable, including, without limitation, the imposition of
any rights of first refusal and resale obligations upon any shares of Common
Stock acquired pursuant to an Option Agreement. Each Option Agreement may be
different from each other Option Agreement.

    5.2   Exercise Price. The Exercise Price per share of Common Stock covered
      --------------
by each Option shall be determined by the Board, provided that the Exercise
Price of an Incentive Option shall not be less than 100% of Fair Market Value on
the date the Incentive Option is granted. If at any time the Company retains
employees in California, then the Exercise Price is subject to the following:
(b) the Exercise Price of a Nonqualified Option shall not be less than 85% of
Fair Market Value on the date the Nonqualified Option is granted, and (c) if the

<PAGE>
Page 6

person to whom an Option is granted is a 10% Stockholder on the date of grant,
the Exercise Price shall not be less than 110% of Fair Market Value on the date
the Option is granted.

    5.3   Payment of Exercise Price. Payment of the Exercise Price shall be made
          --------------------------
upon exercise of an Option and may be made, in the discretion of the Board,
subject to any legal restrictions, by: (a) cash; (b) check; (c) the surrender
of shares of Common Stock owned by the Optionee that have been held by the
Optionee for at least six (6) months, which surrendered shares shall be valued
at Fair Market Value as of the date of such exercise; (d) the Optionee's
promissory note in a form and on terms acceptable to the Board; (e) the
cancellation of indebtedness of the Company to the Optionee; (f) the waiver of
compensation due or accrued to the Optionee for services rendered; (g) provided
that a public market for the Common Stock exists, a "same day sale" commitment
from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the shares so purchased to pay for
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such shares to forward the Exercise Price directly to the Company; (h)
provided that a public market for the Common Stock exists, a "margin" commitment
from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to
exercise the Option and to pledge the shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of

<PAGE>
Page 6

the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt
of such shares to forward the Exercise Price directly to the Company; or (i) any
combination of the foregoing methods of payment or any other consideration or
method of payment as shall be permitted by applicable corporate law.

    5.4   Term and Termination of Options. The term and provisions for
          --------------------------------
termination of each Option shall be as fixed by the Board, but no Option may be
exercisable more than ten (10) years after the date it is granted.

    5.5   Vesting and Exercise of Options. Each Option shall vest and become
          --------------------------------
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives, as shall be determined by the Board. In the
event that the Company shall retain employees in California, then the Option
shall vest at a rate of at least twenty percent (20%) per year over a five (5)
year period.

    5.6   Annual Limit on Incentive Options. To the extent required for
          ----------------------------------
"incentive stock option" treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Common Stock shall
not, with respect to which Incentive Options granted under this 2000 Plan and
any other plan of the Company or any Affiliated Company become exercisable for
the first time by an Optionee during any calendar year, exceed $100,000.

    5.7   Nontransferability of Options. No Option shall be assignable or
          ------------------------------
transferable except by will or the laws of descent and distribution, and during
the life of the Optionee shall be exercisable only by such Optionee.

    5.8   Rights as Stockholder. An Optionee or permitted transferee of an
          ---------------------
Option shall have no rights or privileges as a Stockholder with respect to any
shares covered by an Option until such Option has been duly exercised and
certificates representing shares purchased upon such exercise have been issued
to such person.

    5.9   Company's Repurchase Right. In the event of termination of a
          --------------------------
Participant's Continuous Service, for any reason whatsoever (including death or

<PAGE>
Page 7

disability), the Option Agreement may provide, in the discretion of the Board,
that the Company, or its assignee, shall have the right, exercisable at the
discretion of the Board, to repurchase shares of Common Stock acquired pursuant
to the exercise of an Option at any time prior to the consummation of the
Company's initial public offering of securities in an offering registered under
the Securities Act of 1933, as amended, and at the price equal to the Fair
Market Value per share of Common Stock (determined in accordance with Section
                                                                      -------
2.12 hereof) as of the date of termination of Optionee's employment. The
----
repurchase right provided in this Section 5.9 shall terminate and be of no
further force or effect following the consummation of an underwritten public
offering of the Company's Common Stock.

   In any event, the right to repurchase must be exercised within sixty (60)
days of the termination of Participant's Continuous Service and may be paid by
the Company, or its assignee, by cash, check, or cancellation of purchase money
indebtedness within thirty (30) days of the termination of the exercise window.
If at any time the Company retains employees in California, then the right to
repurchase must be exercised within ninety (90) days.

    5.10  Restrictions On Underlying Shares Of Common Stock. Shares of Common
          -------------------------------------------------
Stock issued pursuant to the exercise of an Option may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in the Option Agreement.

                                      ARTICLE 6
                                  RIGHTS TO PURCHASE
                                  ------------------

    6.1   Nature of Right to Purchase. A Right to Purchase granted to an Offeree
          ----------------------------
entitles the Offeree to purchase, for a Purchase Price determined by the Board,
shares of Common Stock subject to such terms, restrictions and conditions as the
   Board may determine at the time of grant ("Restricted Stock"). Such
conditions may include, but are not limited to, continued employment or the
achievement of specified performance goals or objectives.

     6.2   Acceptance of Right to Purchase. An Offeree shall have no rights with
           -------------------------------
respect to the Restricted Stock subject to a Right to Purchase unless the
Offeree shall have accepted the Right to Purchase within ten (10) days (or such
longer or shorter period as the Board may specify) following the grant of the
Right to Purchase by making payment of the full Purchase Price to the Company in
the manner set forth in Section 6.3 hereof and by executing and delivering
                        -----------
to the Company a Stock Purchase Agreement. Each Stock Purchase Agreement shall
be in such form, and shall set forth the Purchase Price and such other terms,
conditions and restrictions of the Restricted Stock, not inconsistent with the
provisions of this 2000 Plan, as the Board shall, from time to time, deem
desirable. Each Stock Purchase Agreement may be different from each other Stock
Purchase Agreement.

    6.3   Payment of Purchase Price. Subject to any legal restrictions, payment
          --------------------------
of the Purchase Price upon acceptance of a Right to Purchase Restricted Stock
may be made, in the discretion of the Board, by: (a) cash; (b) check; (c) the
surrender of shares of Common Stock owned by the Offeree that have been held by
the Offeree for at least six (6) months, which surrendered shares shall be
valued at Fair Market Value as of the date of such exercise; (d) the Offeree's
promissory note in a form and on terms acceptable to the Board; (e) the
cancellation of indebtedness of the Company to the Offeree; (f) the waiver of
compensation due or accrued to the Offeree for services rendered; or (g) any
combination of the foregoing methods of payment or any other consideration or
method of payment as shall be permitted by applicable corporate law.

<PAGE>
Page 8

    6.4   Rights as a Stockholder. Upon complying with the provisions of Section
          ------------------------                                       -------
6.2 hereof, an Offeree shall have the rights of a Stockholder with respect to
---
the Restricted Stock purchased pursuant to the Right to Purchase, including
voting and dividend rights, subject to the terms, restrictions and conditions as
are set forth in the Stock Purchase Agreement. Unless the Board shall determine
otherwise, certificates evidencing shares of Restricted Stock shall remain in
the possession of the Company until such shares have vested in accordance with
the terms of the Stock Purchase Agreement.

    6.5   Restrictions. Shares of Restricted Stock may not be sold, assigned,
          ------------
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in the Stock Purchase Agreement. In the event of
termination of a Participant's employment, service as a director of the Company
or Service Provider status for any reason whatsoever (including death or
disability), the Stock Purchase Agreement may provide, in the discretion of the
Board, that the Company shall have the right, exercisable at the discretion of
the Board, to repurchase (i) at the original Purchase Price, any shares of
Restricted Stock which have not vested as of the date of termination, and (ii)
at Fair Market Value, any shares of Restricted Stock which have vested as of
such date, on such terms as may be provided in the Stock Purchase Agreement.
The repurchase right provided in this Section 6.5 shall terminate and be of no
                                       -----------
further force or effect following the consummation of an underwritten public
offering of the Company's Common Stock.

    6.6   Vesting of Restricted Stock. The Stock Purchase Agreement shall
          ---------------------------
specify the date or dates, the performance goals or objectives which must be
achieved, and any other conditions on which the Restricted Stock may vest.

    6.7   Dividends. If payment for shares of Restricted Stock is made by
          ---------
promissory note, any cash dividends paid with respect to the Restricted Stock
may be applied, in the discretion of the Board, to repayment of such note.

     6.8   Nonassignability of Rights. No Right to Purchase shall be assignable
           --------------------------
or transferable except by will or the laws of descent and distribution or as
otherwise provided by the Board.

    6.9   Restrictions On Shares Of Common Stock. Shares of Common Stock issued
          --------------------------------------
pursuant to a Stock Purchase Agreement may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
in the Stock Purchase Agreement.

                                          ARTICLE 7
                                ADMINISTRATION OF THE 2000 PLAN
                                -------------------------------

    7.1   BOARD. Authority to control and manage the operation and
          -----
administration of the 2000 Plan shall be vested in the Board, which may delegate
such responsibilities in whole or in part to a committee consisting of two (2)
or more members of the Board (the "Committee"). Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.

    7.2   POWERS OF THE BOARD. In addition to any other powers or authority
          --------------------
conferred upon the Board elsewhere in the 2000 Plan or by law, the Board shall
have full power and authority: (a) to determine the persons to whom, and the
time or times at which, Incentive Options or Nonqualified Options shall be
granted and Rights to Purchase shall be offered, the number of shares to be
represented by each Option and Right to Purchase and the consideration to be
received by the Company upon the exercise thereof; (b) to interpret the 2000
Plan; (c) to create, amend or rescind rules and regulations relating to the 2000

<PAGE>
Page 9

Plan; (d) to determine the terms, conditions and restrictions contained in, and
the form of, Option Agreements and Stock Purchase Agreements; (e) to determine
the identity or capacity of any persons who may be entitled to exercise a
Participant's rights under any Option or Right to Purchase under the 2000 Plan;
(f) to correct any defect or supply any omission or reconcile any inconsistency
in the 2000 Plan or in any Option Agreement or Stock Purchase Agreement; (g) to
accelerate the vesting of any Option or release or waive any repurchase rights
of the Company with respect to Restricted Stock; (h) to extend the exercise date
of any Option or acceptance date of any Right to Purchase; (i) to provide for
rights of first refusal and/or repurchase rights; (j) to amend outstanding
Option Agreements and Stock Purchase Agreements to provide for, among other
things, any change or modification which the Board could have provided for upon
the grant of an Option or Right to Purchase or in furtherance of the powers
provided for herein; and (k) to make all other determinations necessary or
advisable for the administration of the 2000 Plan, but only to the extent not
contrary to the express provisions of the 2000 Plan. Any action, decision,
interpretation or determination made in good faith by the Board in the exercise
of its authority conferred upon it under the 2000 Plan shall be final and
binding on the Company and all Participants.

    7.3   Limitation on Liability. No employee of the Company or member of the
          -------------------------
Board or Committee shall be subject to any liability with respect to duties
under the 2000 Plan unless the person acts fraudulently or in bad faith. To the
extent permitted by law, the Company shall indemnify each member of the Board or
Committee, and any employee of the Company with duties under the 2000 Plan, who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person's conduct in the performance of duties
under the 2000 Plan.

                                       ARTICLE 8
                                   CHANGE IN CONTROL
                                   -----------------

    8.1   Change in Control. In order to preserve a Participant's rights in the
          -----------------
event of a Change in Control of the Company, (i) the time period relating to the
exercise or realization of all outstanding Options, Rights to Purchase and
Restricted Stock shall automatically accelerate immediately prior to the
consummation of such Change in Control if the Board does not take the action
described in subitem (C) of this Section 8.1, and if such action is taken, such
                                 -----------
automatic acceleration shall then occur only if within twelve (12) months of the
consummation of a Change in Control a Participant's Continuous Service is
terminated without Cause or pursuant to the Participant's voluntary termination
for Good Reason, and (ii) with respect to Options and Rights to Purchase, in
connection with such Change in Control the Board in its discretion may, at any
time an Option or Right to Purchase is granted, or at any time thereafter, take
one or more of the following actions: (A) provide for the purchase or exchange
of each Option or Right to Purchase for an amount of cash or other property
having a value equal to the difference, or spread, between (x) the value of the
cash or other property that the Participant would have received pursuant to such
Change in Control transaction in exchange for the shares issuable upon exercise
of the Option or Right to Purchase had the Option or Right to Purchase been
exercised immediately prior to such Change in Control transaction and (y) the
Exercise Price of such Option or the Purchase Price under such Right to
Purchase, (B) adjust the terms of the Options and Rights to Purchase in a manner
determined by the Board to reflect the Change in Control, (C) cause the Options
and Rights to Purchase to be assumed, or new rights substituted therefor, by
another entity, through the continuance of the 2000 Plan and the assumption of
outstanding Options and Rights to Purchase, or the substitution for such Options
and Rights to Purchase of new options and new rights to purchase of comparable
value covering shares of a successor Company, with appropriate adjustments as to

<PAGE>
Page 10

the number and kind of shares and Exercise Prices, in which event the 2000 Plan
and such Options and Rights to Purchase, or the new options and rights to
purchase substituted therefor, shall continue in the manner and under the terms
so provided, or (D) make such other provision as the Board may consider
equitable. If the Board does not take any of the forgoing actions, all Options
and Rights to Purchase shall terminate upon the consummation of the Change in
Control and the Board shall cause written notice of the proposed transaction to
be given to all Participants not less than fifteen (15) days prior to the
anticipated effective date of the proposed transaction.

                                         ARTICLE 9
                     AMENDMENT AND TERMINATION OF THE 2000 PLAN
                     ------------------------------------------

    9.1   Amendments. The Board may from time to time alter, amend, suspend or
          ----------
terminate the 2000 Plan in such respects as the Board may deem advisable. No
such alteration, amendment, suspension or termination shall be made which shall
substantially affect or impair the rights of any Participant under an
outstanding Option Agreement or Stock Purchase Agreement without such
Participant's consent. The Board may alter or amend the 2000 Plan to comply
with requirements under the Code relating to Incentive Options or other types of
options which give Optionees more favorable tax treatment than that applicable
to Options granted under this 2000 Plan as of the date of its adoption. Upon any
such alteration or amendment, any outstanding Option granted hereunder may, if
the Board so determines and if permitted by applicable law, be subject to the
more favorable tax treatment afforded to an Optionee pursuant to such terms and
conditions.

    9.2   2000 Plan Termination. Unless the 2000 Plan shall theretofore have
          ---------------------
been terminated, the 2000 Plan shall terminate on the tenth (10th) anniversary
of the Effective Date (or from the date the Company's Stockholders approved the
2000 Plan, if earlier) and no Options or Rights to Purchase may be granted under
the 2000 Plan thereafter, but Option Agreements, Stock Purchase Agreements and
Rights to Purchase then outstanding shall continue in effect in accordance with
their respective terms.


                                           ARTICLE 10
                                        TAX WITHHOLDING
                                        ---------------

   10.1  Withholding. The Company shall have the power to withhold, or require
          -----------
a Participant to remit to the Company, an amount sufficient to satisfy any
applicable Federal, state, and local tax withholding requirements with respect
to any Options exercised or Restricted Stock issued under the 2000 Plan. To the
   extent permissible under applicable tax, securities and other laws, the
Board may, in its sole discretion and upon such terms and conditions as it may
deem appropriate, permit a Participant to satisfy his or her obligation to pay
any such tax, in whole or in part, up to an amount determined on the basis of
the highest marginal tax rate applicable to such Participant, by (a) directing
the Company to apply shares of Common Stock to which the Participant is entitled
as a result of the exercise of an Option or as a result of the purchase of or
lapse of restrictions on Restricted Stock or (b) delivering to the Company
shares of Common Stock owned by the Participant. The shares of Common Stock so
applied or delivered in satisfaction of the Participant's tax withholding
obligation shall be valued at their Fair Market Value as of the date of
measurement of the amount of income subject to withholding.

<PAGE>
Page 11

                                         ARTICLE 11
                                       MISCELLANEOUS
                                       -------------

    11.1  Benefits Not Alienable. Other than as provided above, benefits under
          -----------------------
the 2000 Plan may not be assigned or alienated, whether voluntarily or
involuntarily. Any unauthorized attempt at assignment, transfer, pledge or
other disposition shall be without effect.

    11.2  No Enlargement of Employee Rights. This 2000 Plan is strictly a
          ---------------------------------
voluntary undertaking on the part of the Company and shall not be deemed to
constitute a contract between the Company and any Participant to be
consideration for, or an inducement to, or a condition of, the employment of any
Participant. Nothing contained in the 2000 Plan shall be deemed to give the
right to any Participant to be retained as an employee of the Company or any
Affiliated Company or to interfere with the right of the Company or any
Affiliated Company to discharge any Participant at any time.

    11.3  Application of Funds. The proceeds received by the Company from the
          ---------------------
sale of Common Stock pursuant to Option Agreements and Stock Purchase
Agreements, except as otherwise provided herein, will be used for general
corporate purposes.

<PAGE>
Exhibit 99.1


                 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                        AS ADOPTED PURSUANT TO SECTION 906
                         OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Online Innovation, Inc. (the "Company")
on Form 10-KSB for the period ending June 30, 2002 as filed with the Securities
and Exchange Commission (the "Report"), I, Chad D. Lee, Principal Executive
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)   The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.



Date:   September 26, 2002
    -----------------------------


      /s/ Chad D. Lee
---------------------------------
Chad D. Lee, President, Director,
Principal Executive Officer

<PAGE>
Exhibit 99.2


                 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                        AS ADOPTED PURSUANT TO SECTION 906
                         OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Online Innovation, Inc. (the "Company")
on Form 10-KSB for the period ending June 30, 2002 as filed with the Securities
and Exchange Commission (the "Report"), I, Chad D. Lee, Principal Executive
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)   The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.



Date:   September 26, 2002
    -----------------------------


/s/ Marlene C. Schluter
----------------------------
Marlene C. Schluter, Director,
Principal Financial Officer




<PAGE>