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

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

                                   Form 10-QSB

                  QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                          -----------------------------
                For the quarterly period ended September 30, 1999

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

         CALIFORNIA                                      94-3210624
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                                117 Morris Street
                              Sebastopol, CA 95472
                                 (707) 824-4150
   (Address, including zip code, and telephone number, including area code, of
                    registrant's principal executive offices)

         Securities registered under section 12(b) of the Exchange Act:
                                      None


         Securities registered under section 12(g) of the Exchange Act:
                                      None

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Securities 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  No X

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

            4,608,870 shares of common stock as of November 19, 1999.

           Transitional Small Business Disclosure Format Yes[ ] No[x]

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


<PAGE>

Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

ZAPWORLD.COM AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
                                                                   September 30,
                                                                       1999
--------------------------------------------------------------------------------
                                   ASSETS
CURRENT ASSETS
   Cash                                                             $ 2,341,200
   Receivables                                                          772,800
   Inventories                                                        1,286,400
   Prepaid expenses and other assets                                    442,800
                                                                    -----------
             Total current assets                                     4,843,200
                                                                    -----------

PROPERTY AND EQUIPMENT                                                  265,100
                                                                    -----------

OTHER ASSETS
    Intangibles, net of accumulated amortization
        of $16,600                                                      134,500
   Investment in Technology Companies                                   127,000
   Advance to ASCR                                                       99,000
   Deposits                                                             100,100
                                                                    -----------
              Total other assets                                        460,600
                                                                    -----------

              Total assets                                          $ 5,568,900
                                                                    -----------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                                 $   408,500
   Accrued liabilities and other expenses                               415,200
   Customer Deposits                                                     38,700
   Notes payable                                                          4,000
   Current maturities of long-term debt                                   3,700
   Current maturities of obligations under capital leases                 2,900
                                                                    -----------
               Total current liabilities                                873,000
                                                                    -----------

OTHER LIABILITIES
   Obligations under capital leases, less current maturities             22,100
   Long-Term Debt, less current maturities                               39,500
                                                                    -----------
               Total other liabilities                                   61,600
                                                                    -----------

STOCKHOLDERS' EQUITY
   Common stock, no par value; 10,000,000 shares
      authorized, 4,593,532 shares issued and outstanding             8,372,000
   Accumulated deficit                                               (3,737,700)
                                                                    -----------
               Total stockholders' equity                             4,634,300
                                                                    -----------

Total liabilities and stockholders' equity                          $ 5,568,900
                                                                    -----------

The accompanying notes are an integral part of this financial statement

                                       2
<PAGE>


<TABLE>

ZAPWORLD.COM AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
                                  Quarter ended September 30,  Nine Months ended September 30,
                                     1999           1998           1999           1998
------------------------------------------------------------------------------------------
<S>                               <C>            <C>            <C>            <C>
NET SALES                         $ 1,767,000    $ 1,229,700    $ 4,444,200    $ 2,554,600

COST & EXPENSES
     Cost of Goods Sold             1,379,200        778,500      2,978,400      1,684,900
     Selling                          280,400        255,700        729,500        665,400
     General and administrative       363,500        225,600        877,800        608,000
     Research and development          81,600         51,500        204,800        131,400
                                  -----------    -----------    -----------    -----------

LOSS FROM OPERATIONS                 (337,700)       (81,600)      (346,300)      (535,100)
                                  -----------    -----------    -----------    -----------

OTHER INCOME (EXPENSE)
     Interest expense                  (1,700)        (4,500)       (77,400)       (10,800)
     Interest Income                   17,700          1,000         41,400          5,700
     Other                             (1,500)        (6,000)        (8,600)       (10,300)
                                  -----------    -----------    -----------    -----------
                                       14,500         (9,500)       (44,600)       (15,400)
                                  -----------    -----------    -----------    -----------

NET LOSS                          $  (323,200)   $   (91,100)   $  (390,900)   $  (550,500)
                                  ===========    ===========    ===========    ===========

NET LOSS
PER COMMON SHARE,
BASIC AND DILUTED                 $     (0.07)   $     (0.03)   $     (0.11)   $     (0.21)
                                  ===========    ===========    ===========    ===========


WEIGHTED AVERAGE COMMON
      SHARES OUTSTANDING            4,416,249      2,633,500      3,668,118      2,592,400
                                  ===========    ===========    ===========    ===========

<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
                                       3
<PAGE>
<TABLE>

ZAPWORLD.COM AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
                                                                Nine months ended September 30,
                                                                     1999          1998
-----------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                    $  (390,900)   $  (550,500)
     Adjustments to reconcile net loss to net cash
       used by operating activities
         Depreciation and amortization                                78,700         58,200
         Issuance of common stock for services rendered              805,100          3,000
       Changes in:
         Receivables                                                (489,300)      (346,000)
         Inventories                                                (652,700)      (339,900)
         Prepaid expenses                                           (314,200)       (40,400)
         Deposits                                                    (88,200)       (67,300)
         Other Assets                                                (58,400)       (27,100)
         Accounts payable                                             74,200        245,700
         Accrued liabilities and other expenses                      303,100        (35,200)
                                                                 -----------    -----------

                      Net cash used in operating activities         (732,600)    (1,099,500)
                                                                 -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchases of equipment                                         (158,000)       (80,100)
     Investment in Technology Companies                             (127,000)          --
     Advance to ASCR                                                 (19,000)          --
                                                                 -----------    -----------
                         Net cash used in investing activities      (304,000)       (80,100)
                                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from issuance of notes & loans payable                  27,000           --
     Increase in loans payable                                          --          517,500
     Increase in capital leases payable                               21,500           --
     Sale of common stock, net of stock offering costs             3,750,200        558,000
     Principal repayments on long-term debt                             --           (4,700)
     Payments on obligations under capital leases                     (7,400)       (11,800)
     Principal repayments on note payable                           (888,800)       (13,500)
                                                                 -----------    -----------
              Net cash provided by financing activities            2,902,500      1,045,500
                                                                 -----------    -----------

NET INCREASE/(DECREASE) IN CASH                                    1,865,900       (134,100)

CASH, beginning of period                                            475,300        690,500
                                                                 -----------    -----------

CASH, end of period                                              $ 2,341,200    $   556,400
                                                                 ===========    ===========
<FN>

The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
                                       4
<PAGE>
<TABLE>

ZAPWORLD.COM AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
                                                                        Nine months ended September 30,
                                                                              1999               1998
-------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                  <C>
Supplemental cash flow information:

Non-cash investing and financial activities:
  Conversion of notes payable and accrued interest into common stock        $504,100              --
  Stock issued for current and future services                               301,000              --
  Stock issued for Advance to ASCR                                            80,000              --
  Stock Issued as investment in Big Boy Bicycles                               5,000


<FN>

The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
                                       5
<PAGE>

ZAPWORLD.COM AND SUBSIDIARIES
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)   Basis of Presentation

The condensed  consolidated  financial  statements  included in this Form 10-QSB
have been  prepared by the  Company,  without  audit,  pursuant to the rules and
regulations of the Securities and Exchange  Commission.  Certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted,  pursuant to such rules and regulations,  although  management believes
the disclosures  are adequate to make the information  presented not misleading.
The results of operations for any interim period are not necessarily  indicative
of results for a full year. These statements  should be read in conjunction with
the  financial  statements  and related notes  included in the Company's  Annual
Report on Form 10-KSB for the year ended December 31, 1998 and prior disclosures
of 10-QSB's and 8-K's.

The condensed consolidated financial statements presented herein as of September
30, 1999, and for the three months and nine months ended  September 30, 1999 and
September  30,  1998  reflect,  in  the  opinion  of  management,  all  material
adjustments consisting only of normal recurring adjustments necessary for a fair
presentation of the financial position,  results of operations and cash flow for
the interim periods.

In July, 1999, the Company incorporated two new legal entities, ZAPWORLD Stores,
Inc. and ZAPWORLD Outlets,  Inc., which operate as wholly owned  subsidiaries of
the Company.

The net loss per common share is based on the weighted  average number of common
shares  outstanding in each period.  Common stock  equivalents  associated  with
stock options have been excluded from the weighted  average  shares  outstanding
since the effect of these securities would be anti-dilutive.

(2) -  RECEIVABLES

                                                              September 30, 1999
                                                              ------------------
Trade accounts receivable                                        $   807,800
Less allowance for doubtful accounts                                 (35,000)
                                                                 ------------

                                                                 $   772,800
                                                                 ------------

(3) - INVENTORIES

                                                              September 30, 1999
                                                              ------------------
Raw materials                                                    $   872,000
Work-in-process                                                      197,800
Finished goods                                                       216,600
                                                                 ------------

                                                                 $ 1,286,400
                                                                 ------------

(4) - PROPERTY AND EQUIPMENT

                                                              September 30, 1999
                                                              ------------------
Demonstration items                                              $    89,600
Machinery and equipment                                              113,700
Equipment under capital leases                                        45,900
Office furniture and fixtures                                         44,000
Computers                                                             79,900
Leasehold improvements                                                62,000
Vehicles                                                              97,700
                                                                 -------------
                                                                     532,800
Less accumulated depreciation and amortization                      (267,700)
                                                                 -------------
                                                                 $   265,100
                                                                 -------------

                                       6
<PAGE>

(5) - COMMON STOCK

The Company's  Common Stock is traded on the OTC Bulletin  Board under the stock
symbol  "ZAPP".  On July 30, 1999,  ZAP  completed a private  placement of 4,000
shares of its common  stock for the  purpose  of  investing  in a PowerSki  test
marketing   project  and  prototyping  a  utilitarian   electric   cart/electric
wheelbarrow type vehicle.  Additionally, a private placement of 21,001 shares of
the  Company's  common  stock was  completed  for the  purchase of the assets of
American  Scooter and Cycle  Rentals and 1,000  shares of the  Company's  common
stock to complete the purchase of the assets of Big Boy Bicycles. Furthermore in
the third  quarter of 1999,  the Company 1) issued  1,840  shares in payment for
current  services,  and 2) realized  $161,100 in proceeds  from the  exercise of
employee stock options and issued 247,500 common shares.

(6) - 1999 STOCK OPTION PLAN

In 1999, the Company created a new Employee and Consultant  Stock Option Plan of
500,000  shares.  As of the end of the third  quarter  1999,  no shares had been
issued under this plan.


Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF PLAN OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS.

Special Note Regarding Forward-Looking Statements

     Certain  statements in this Form 10-QSB,  including  information  set forth
under this Item 2. "Management's  Discussion and Analysis of Financial Condition
and Results of Operations"  constitute  "forward-looking  statements" within the
meaning of the Private  Securities  Litigation  Reform Act of 1995 (the  "ACT").
ZAPWORLD.COM  (the  "Company")  desires to avail itself of certain "safe harbor"
provisions of the Act and is therefore including this special note to enable the
Company to do so.  Forward-looking  statements  included  in this Form 10-QSB or
hereafter  included  in  other  publicly  available  documents  filed  with  the
Securities and Exchange  Commission,  reports to the Company's  stockholders and
other publicly  available  statements  issued or released by the Company involve
known and unknown risks, uncertainties,  and other factors which could cause the
Company's actual results,  performance  (financial or operating) or achievements
to differ from the future  results,  performance  (financial  or  operating)  or
achievements  expressed  or implied by such  forward  looking  statements.  Such
future results are based upon  management's  best  estimates  based upon current
conditions and the most recent results of operations.

Overview

         The Company designs,  assembles,  manufactures and distributes electric
bicycle  power  kits,  electric  bicycles  and  tricycles,  and other  low-power
electric   transportation   vehicles.   Historically,   unit   sales  have  been
approximately 50% kits, 30% electric bicycles, and 20% electric scooters. Dollar
sales have been 30% kits, 35% electric bicycles, and 35% electric scooters.

         The Company  manufactures  several electric motor kits. The Company was
issued its first United States Patent on February 13, 1996 on its electric motor
power system for  bicycles,  tricycles,  and scooters  (Patent  #5,491,390).  On
September  30, 1997,  the Company was issued its second  United States Patent on
its electric motor system (Patent #5,671,821). On December 15, 1998, the Company
was issued a United States Patent for its ZAPPY scooter (Patent #5,848,660). ZAP
also holds several  trademarks.  The "ZAP" trademark was registered on September
28,  1993  under  registration  no.  1,794,866,   the  ELECTRICRUIZER  mark  was
registered on April 2, 1999 under registration no. 2,248,753,  and the POWERBIKE
mark was  registered  on June 1, 1999  under  registration  no.  2,248,753.  The
electric motor kit  manufacturing  and  installation of the motor systems to the
bicycles and scooters is done at its Sebastopol  location.  The electric  motors
are  purchased  from an original  equipment  manufacturer  (OEM) in the auto and
air-conditioning  industry.  The  Company is using one  company  for its motors,
although there are other companies that could be used with slight  modifications
to the motor support brackets.  The batteries are standard batteries used in the
computer  industry  for power  interrupt  systems.  The  electronic  system uses
standard electronic components.  The Company has a contractual relationship with
Smith &

                                       7
<PAGE>

Wesson who provides the Company with Law Enforcement  Bicycles.  The Company has
agreed to  purchase  at least  250  bikes  from  Smith & Wesson  during  1999 in
exchange for specific exclusive distribution and pricing rights. The Company has
no other contractual agreements with any of its other vendors.


         On July 19,  1999,  the  Company  created  two  subsidiaries,  ZAPWORLD
Stores,  Inc. and ZAPWORLD  Outlets,  Inc.  ZAPWORLD Stores,  Inc. was set up to
record the  activity for acquired  stores while  ZAPWORLD  Outlets was set up to
record the activity for future franchise  stores.  Both  subsidiaries are wholly
owned by ZAPWORLD.COM.

         At the Board of Directors meeting dated September 9, 1999, the Board of
Directors selected Gary Starr to be the Chief Executive Officer of the Company.

         On July 12,  1999,  the Company  entered  into an  agreement to acquire
American  Scooter and Rentals,  Inc located in San  Francisco,  CA. The purchase
price for the business and  lease/purchase  of the equipment  consists of 21,001
shares of the Company's Common Stock and $70,000 in cash. The 21,001 shares were
issued  prior to  September  30,1999 and have been  recorded as an advance.  The
purchase was completed on November 05, 1999.  The Company has  consolidated  all
revenues and expenses  incurred by the business since the  acquisition  date and
has included the cash, inventory,  and fixed assets acquired since the agreement
in its consolidated balance sheet.

         On  September  17,  1999,  the Company  entered  into an  agreement  to
purchase the business and all the assets and  liabilities of Big Boy Bicycles in
Key West, FL. The purchase  price for the business and all its assets  consisted
of 1,000 shares of the Company's  Common stock and $15,165 in cash.  The Company
also assumed  approximately  $67,636 of Big Boy Bicycles debt  obligations as of
the closing date, November 12, 1999.

     The Company as of September 30, 1999 had a $450,000 sales backlog.

     The Company's  growth  strategy is to increase net sales by augmenting  its
marketing and sales force, by increasing  distribution  channels  through retail
organizations  and wholesale  distributors  both  domestically and overseas,  by
setting  up  and  acquiring   additional  outlet  stores  under  its  subsidiary
corporation  as well as  franchise  stores to assist in the  retail  arena.  The
Company  will  continue  to  increase  its  production  capability  to meet  the
increasing  demand for its  product.  The Company  will  continue to develop the
product with the goal of being the low cost leader in the industry.  The Company
will continue to develop new products with the goal of offering the consumer the
most  complete  line  of  electric  vehicles  available.  Product  improvements,
strategic relations, the development of the ZAP Electric Vehicle Outlet network,
and ZAP's Shopping Mall on the Internet are continuing to enlarge ZAP's presence
and brand awareness in the electric vehicle industry.


Results of Operations
<TABLE>
         The following table sets forth,  as a percentage of net sales,  certain
items  included  in the  Company's  Income  Statements  (see  interim  condensed
consolidated Financial Statements and Notes) for the periods indicated:
<CAPTION>
                                                            Quarter ended September 30,  Nine months ended September 30,
                                                                1999            1998         1999          1998
                                                                -----           -----        -----        -----
<S>                                                             <C>             <C>          <C>          <C>
     Statements of Income Data:
         Net sales........................................      100.0%          100.0%       100.0%       100.0%
         Cost of sales....................................       78.0            63.3         67.0         66.0
         Gross profit.....................................       22.0            36.7         33.0         34.0
         Operating  expenses..............................       41.1            43.3         40.8         55.0
         Gain/(Loss) from operations......................      (19.1)           (6.6)         7.8        (20.9)
         Other  income (expense)..........................        0.8            (0.8)        (1.0)        (0.6)
         Loss before income taxes.........................      (18.3)           (7.4)        (8.8)       (21.5)
         Provision for income taxes.......................        0.0             0.0          0.0          0.0
         Net loss.........................................      (18.3)           (7.4)        (8.8)       (21.5)
</TABLE>
                                       8
<PAGE>

     Net sales  for the  quarter  ended  September  30,  1999,  were  $1,767,000
compared to  $1,229,700  in the prior year,  an increase of $537,300 or 44%. The
increase  in sales in 1999 over the same  period in 1998 was due to the sales of
the ZAPPY scooter that  accounted for $1,151,200 or 65% of total sales and sales
recognized  from the newly acquired outlet stores that accounted for $169,300 of
sales.  During the third quarter of 1999,  $470,000 in sales representing 27% of
total net sales were with one customer.

     Gross profit  decreased  as a percentage  of net sales to 22% from 37%. The
total gross profit decreased  $63,400 or 14%. The decrease in profit dollars and
percentage  is  largely  due to a  one-time  sale  to a large  distributor  at a
significant  discount  in the  third  quarter  of 1999.  Additional  costs  were
incurred in moving and scaling up operations.

     Selling  expenses in the quarter ended  September 30, 1999 were $280,400 as
compared to $255,600  for the quarter  ended  September  30,  1998.  This was an
increase of $24,800 or 10% from 1998 to 1999. As a percentage of sales,  selling
expenses  decreased  from 21% of sales to 16% of sales.  The increase in selling
expenses is consistent with the Company's plan to increase sales volume.

     General and  administrative  expenses for the quarter  ended  September 30,
1999 were  $363,500.  This was an  increase  of 137,900  or 61% from 1998.  As a
percentage of sales,  general and  administrative  expense increased to 21% from
18% of net sales.  Expense  increases during the 3rd quarter of 1999 as compared
to the 3rd quarter of 1998 resulted from increased  personnel  costs of $117,200
due to the needs of the new outlet  stores and  increased  requirements  for the
parent company.

     Research and development  increased  $30,100 or 58% from the 3rd quarter of
1998 as  compared to the 3rd quarter of 1999.  As a  percentage  of net sales it
increased  to 5% of sales in the 3rd  quarter of 1999 as compared to 4% of sales
in the 3rd quarter of 1998. New product development and improvements to existing
products resulted in the increase of dollars.


Nine Months Ended  September 30, 1999  Compared to Nine Months Ending  September
30, 1998

     Net sales for the nine months  ended  September  30,  1999 were  $4,444,200
compared  with  $2,554,600  in the nine months  ended  September  30,  1998,  an
increase of  $1,889,600  or 74%. The increase in sales is attributed to sales of
the new ZAPPY scooter and a greater  acceptance of the Company's products in the
marketplace.  ZAPPY  scooters  accounted  for  $2,847,000 or 64% of sales in the
first nine  months of 1999.  During the nine  months of 1999,  $471,700 in sales
representing 11% of total sales were with one customer.

     Gross profit  decreased as a percentage of net sales,  to 33% from 34%. The
total gross  profit  increased  $596,100 or 69%.  The  increase in gross  margin
dollars can be attributed to the gross margins  realized on the sales of the new
ZAPPY scooters.

     Selling expenses for the nine months ended September 30, 1999 were $729,500
as compared to $665,400 for the nine months ended  September 30, 1998.  This was
an  increase  of $64,100  or 10% from 1998 to 1999.  As a  percentage  of sales,
selling  expenses  decreased from 26% of sales to 16% of sales.  The increase in
selling expenses is consistent with the Company's plan to increase sales volume.

     General and administrative expenses for the nine months ended September 30,
1999 were  $877,800.  This is an increase  of  $269,800  or 44% from 1998.  As a
percentage of sales,  general and  administrative  expense decreased to 20% from
24% of net sales.  Expense  increases  during  the first nine  months of 1999 as
compared  to the  first  nine  months  of  1998  occurred  due to the  need  for
managerial infrastructure related to acquisition activities.

     Research  and  development  increased  $73,400  or 56% from the first  nine
months of 1998 as compared to the first nine months of 1999.  As a percentage of
net sales,  research and development  remained flat at 5% of sales for the first
nine months of 1999 as  compared  to the first nine months of 1998.  New product
development and  improvements to existing  products  resulted in the increase of
dollars.

                                       9
<PAGE>

Liquidity and Capital Resources

     The Company used cash from operations of $732,600 and $1,099,500 during the
nine  months  ended  September  30,  1999 and 1998  respectively.  Cash  used in
operations  in the  first  nine  months  of 1999 was the  result of the net loss
incurred  for the  period  of  $390,900,  offset  by net  non-cash  expenses  of
$883,800,  and the net change in operating assets and liabilities resulting in a
further use of cash of  $1,225,500.  Cash used in operations  for the first nine
months of 1998 was the result of the net loss incurred for the first nine months
of $550,500,  offset by net non cash expenses of $61,200,  and the net change in
operating assets and liabilities resulting in further use of cash of $610,200.

     Investing  activities  used cash of $304,000  and $80,100  during the first
nine months ended  September  30, 1999 and 1998  respectively.  The uses of cash
were for the purchase of fixed assets,  defense of the company's patents and the
Company's investments in technology companies.

     Financing  activities provided cash of $2,902,500 and $1,045,500 during the
first nine months ended September 30, 1999 and 1998  respectively.  In 1999, the
cash provided by financing  activities  included the proceeds from loans payable
of $27,000,  increases in leases  payable of $21,500,  the sales of common stock
(net of offering  costs)  totaling  $3,750,200  offset by principal  payments on
outstanding debt. In 1998, the cash provided by financing activities included an
increase in loans  payable of $517,500 and the sales of common  stock,  $558,000
offset by principal payments on outstanding debt.

     At  September  30,  1999,  the  Company  had cash and cash  equivalents  of
$2,341,200 as compared to $556,400 at September 30, 1998. At September 30, 1999,
the Company had working  capital of $3,970,200 as compared to working capital of
$708,300 at September 30, 1998. The increase in both cash and working capital in
the first nine months of 1999 over the first nine  months of 1998 are  primarily
due to the net proceeds received from the Company's  private placement  offering
which more than offset the  Company's  net losses  during the same  period.  The
Company,  at  present,  does not have a credit  facility in place with a bank or
other financial institution.  The Company has established an accounts receivable
facility that is guaranteed by the U.S. Exim Bank. The Company believes that the
cash on hand at September  30, 1999,  will be sufficient to allow the Company to
continue its expected level of operations for the remainder of the year.

         The Company's  primary  capital needs are to fund its growth  strategy,
which  includes  increasing  its internet  shopping  mall  presence,  increasing
distribution channels,  strengthening company owned and establishing  franchised
ZAP stores,  introducing  new  products,  improving  existing  product lines and
developing of strong corporate infrastructure


                                       10
<PAGE>

Year 2000 Readiness

         State of Readiness. During the past three fiscal years, the Company has
been actively  involved in finding and correcting the Year 2000 problems  within
its information technology structure.  The information system correction process
is  essentially  complete.   The  Company  maintains  its  critical  information
technology  systems in close cooperation with its suppliers.  The Company is not
currently operating any legacy systems that are no longer being supported by the
original supplier.

         Costs.  The Company has had only limited  expenditures  related to Year
2000 issues,  consisting principally of personnel costs incurred in the scope of
normal  operations.  In  addition,  software  replacements  and  upgrades in the
ordinary  course of business  have enhanced the  Company's  Year 2000  readiness
without  incremental  costs.  The Company is in the final stages of its projects
and does not  anticipate  that  future  Year 2000 costs  related to  information
technology   operations  will  be  significantly  beyond  the  scope  of  normal
operations.

         Risks.  In the early weeks of 2000,  the Company  may  experience  some
random  supply  chain  disruptions  that may affect its  ability to produce  and
distribute key products. These disruptions will be material if the United States
experiences  significant  interruptions in basic services,  such as the electric
power grid, natural gas, telephone service or the banking systems.

         Completion.  Based on management's  assessment of current progress, the
Company believes it will complete the limited amount of Year 2000  modifications
and  contingency  plans that  remain  before the end of 1999.  The Company is in
close contact with its key hardware and software  suppliers,  and will implement
any future  updates  shortly  after they are  released.  The Company can give no
assurance that the Company's Year 2000 preparations will prevent  disruptions in
its business resulting from Year 2000 problems of the Company,  its suppliers or
its  customers,  or  that  costs  to  the  Company  of its  preparations  or any
disruptions will not be material.

Seasonality and Quarterly Results

     The Company's business is subject to seasonal influences.  Sales volumes in
the bicycle industry  typically slow down during the winter months,  November to
March, in the U.S.

Inflation

     The  Company's  raw  materials  are sourced  from  stable cost  competitive
industries.  As such,  the Company  does not foresee any  material  inflationary
trends for its raw material sources.




PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

      There were no material  proceedings  pending in which the  Registrant  was
      named as a party.

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

      On May 16,  1999 a Board  Meeting  resolved to  authorize  a new  employee
      incentive and consultant plan of 500,000  shares.  This action was brought
      before the annual  meeting on May 16, 1999. It was voted on and adopted by
      the shareholders.

Item 6.   Exhibits and Reports on Form 8-K

      On  July  12,  1999,  a Form  8-K  was  filed  amending  the  name  of the
      Corporation to be ZAPWORLD.COM.


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<PAGE>


                                   SIGNATURES

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


           ZAPWORLD.COM
----------------------------------
           (Registrant)


Date
     -----------------                 ----------------------------------------
                                               Gary Starr - CEO & CFO

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