================================================================================

                                  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, 2000

                         Commission File Number 0-303000

                                  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 theExchange Act:

                                  Common Shares

         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 X
No

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

            5,749,592 shares of common stock as of November 12, 2000.


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

================================================================================

<PAGE>

<TABLE>
Part I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
         ZAPWORLD.COM
         CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
         (In thousands)
<CAPTION>
                                                                                        September 30,
                                                                                           2000
-----------------------------------------------------------------------------------------------------
                                          ASSETS
<S>                                                                                     <C>
CURRENT ASSETS
     Cash                                                                               $      3,536
     Accounts receivable, net of allowance for doubtful accounts of $53                        1,286
     Inventories                                                                               1,708
     Notes receivable                                                                             35
     Prepaid expenses and other assets                                                         1,236
                                                                                        ------------
                      Total current assets                                                     7,801
                                                                                        ------------

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $489                                  507

OTHER ASSETS

      Patents, Trademarks & Copyrights,
              net of accumulated amortization of $128                                          1,440
      Goodwill, net of amortization of $14                                                     1,197
      Advances to retail stores & technology companies                                            63
      Deposits                                                                                    53
                                                                                        ------------
                Total other assets                                                             2,753
                                                                                        ------------

TOTAL ASSETS                                                                                 $11,061
                                                                                        ============

                           LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                                   $        612
     Accrued liabilities and other expenses                                                      697
     Current maturities of long-term debt                                                         41
     Current maturities of obligations under capital leases                                        4
                                                                                        ------------
          Total current liabilities                                                            1,354
                                                                                        ------------

OTHER LIABILITIES
     Obligations under capital leases, less current maturities                                    35
     Long-Term Debt, less current maturities                                                     390
                                                                                        ------------
                      Total other liabilities                                                    425
                                                                                        ------------
TOTAL LIABILITIES                                                                              1,779
                                                                                        ------------

STOCKHOLDERS' EQUITY
    Preferred stock, authorized 10,000,000 shares;
            issued and outstanding  2,372                                                      2,768
    Common stock, authorized 20,000,000 shares of
             no par value; issued and outstanding 5,557,100                                   13,809
    Accumulated deficit                                                                        (7032)
    Unearned compensation                                                                        (55)
                                                                                        ------------
                                                                                               9,490
     Less: notes receivable from shareholders                                                   (208)
                                                                                        ------------
                Total stockholders' equity                                                     9,282
                                                                                        ------------
Total liabilities and stockholders' equity                                              $     11,061
                                                                                        ============

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


                                               2

<PAGE>

<TABLE>
ZAPWORLD.COM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Thousands, except share and per share amounts)
<CAPTION>
                                      Quarter ended September 30,    Nine Months ended September 30,
                                      ---------------------------    -------------------------------
                                         2000             1999          2000              1999
----------------------------------------------------------------------------------------------
<S>                                     <C>              <C>           <C>              <C>
NET SALES                               $3,948           $1,767        $8,128           $4,444

COST OF GOODS SOLD                       2,532            1,379         5,190            2,978
                                     ---------        ---------     ---------        ---------

GROSS PROFIT                             1,416              388         2,938            1,466
                                     ---------        ---------     ---------        ---------

OPERATING EXPENSES
     Selling                               579              280         1,327              729
     General and administrative            774              364         2,269              878
     Research and development              153               82           464              205
                                     ---------        ---------     ---------        ---------
                                         1,506              726         4,060            1,812
                                     ---------        ---------     ---------        ---------

LOSS FROM OPERATIONS                       (90)            (338)       (1,122)            (346)
                                     ---------        ---------     ---------        ---------


OTHER INCOME (EXPENSE)
     Interest income                        58               18           135               41
     Other income (expense)                (22)              (3)          (27)             (86)
                                     ---------        ---------     ---------        ---------
                                            36               15           108               45
                                     ---------        ---------     ---------        ---------

NET LOSS                                $  (54)        $   (323)    $  (1,014)        $   (391)
                                     =========        =========     =========        =========


NET LOSS ATTRIBUTABLE TO
COMMON SHARES

     Net Loss                           $  (54)        $   (323)    $  (1,014)        $   (391)
     Preferred Dividend                   (900)               -          (900)               -
                                     ---------        ---------     ---------        ---------
                                        $ (954)        $   (323)    $  (1,914)        $   (391)
                                     =========        =========     =========        =========

NET LOSS PERCOMMON SHARE

BASIC AND DILUTED                       $(0.18)        $  (0.07)    $   (0.37)        $  (0.11)
                                     =========        =========     =========        =========


WEIGHTED AVERAGE OF

 COMMON SHARES OUTSTANDING           5,265,100        4,416,200     5,213,000        3,668,000
                                     =========        =========     =========        =========

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

<PAGE>

<TABLE>
ZAPWORLD.COM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<CAPTION>
                                                                           Nine months ended September 30,
                                                                             2000                   1999
-------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                              ($1,014)               ($391)
     Adjustments to reconcile net loss to net cash
       (used for) operating activities
         Depreciation and amortization                                         250                   79
         Allowance for doubtful accounts                                        18                    -
         Issuance of common stock for services rendered                         63                  805
       Amortization of unearned compensation                                    41                    -
       Changes in:
         Receivables                                                          (966)                (489)
         Inventories                                                            17                 (653)
         Prepaid expenses                                                     (933)                (314)
         Deposits                                                              (29)                 (88)
         Other assets                                                         (211)                 (59)
         Accounts payable                                                     (130)                  74
         Accrued liabilities and other expenses                                329                  303
                                                                         ---------             --------
                    Net cash (used for) operating activities                (2,565)                (733)
                                                                         ---------             --------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchases of equipment                                                   (285)                (158)
     Investment in Technology Companies                                        167                 (127)
     Purchase of Aquatic Propulsion Technologies                              (981)                   -
     Purchase of Patents from EVS                                             (162)                   -
     Purchase of ASCR - Barbary Coast                                          132                  (19)
                                                                         ---------             --------

                    Net cash (used for) investing activities                (1,129)                (304)
                                                                         ---------             --------

CASH FLOWS FROM FINANCING ACTIVITIES

     Proceeds from issuance of notes and loans payable                         409                   27
     Sale of common stock, net of stock offering costs                       1,589                3,750
     Sale of Preferred stock, net of Preferred stock offering costs          1,972                    -
     Principal repayments on long-term debt                                    (11)                   -
     Increase in capital leases                                                 26                   22
     Payments on obligations under capital leases                              (10)                  (7)
     Principal repayments on note payable                                       (6)                (889)
     Advances on Notes Receivable to shareholders                               77                    -
                                                                         ---------             --------
              Net cash provided by financing activities                      4,046                2,903
                                                                         ---------             --------

NET INCREASE IN CASH                                                           352                1,866

CASH, beginning of period                                                    3,184                  475
                                                                         ---------             --------

CASH, end of period                                                         $3,536               $2,341
                                                                         =========             ========

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

                                                       4

<PAGE>

<TABLE>
ZAPWORLD.COM
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In thousands)
<CAPTION>
                                                                                           Unearned           Note
                                   Common Stock       Preferred Stock    Accumulated     Compensation      Receiveable
                                 Shares    Amount     Shares    Amount     Deficit       & Services      from Shareholder    Total
                                 ------    ------     ------    ------     -------       ----------      ----------------    -----
<S>               <C>            <C>       <C>           <C>      <C>     <C>                <C>              <C>           <C>
Balance, December 31,1999        5,109     $12,503       0        $0      ($5,118)           ($96)            ($285)        $6,554
  Issuance of Common Stock:
        Cash                         3          14                                                                              14
        Cashless Conversion
            of Warrants             59                                                                                           -
        Employee Stock
            Purchase Plan            1           9                                                                               9
        Services                    11          60                                                                              60
        Acquisitions               120         726                                                                             726

  Issuance of Preferred Stock:
        Cash                                             3     2,600                                                         2,600

Beneficial Conversion Feature
  on Preferred Stock                                             900         (900)                                               -

  Conversion of Preferred Stock
     to Common Stock               156         735      (1)     (732)                                                            3

  Exercise of employee stock
     options                        74          86                                                                              86
  Exercise of non-employee
     stock options                  24         126                                                                             126

 Amortization of Unearned
     compensation                                                                              41                               41

  Note receivable from
     shareholders                                                                                                77             77


  Net Loss                                                                 (1,014)                                          (1,014)
                                 -------------------------------------------------------------------------------------------------
Balance, September 30, 2000      5,557     $13,809       2    $2,768      ($7,032)           ($55)            ($208)        $9,282
                                 =================================================================================================



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

<PAGE>

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

(1)   Basis of Presentation

The 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, 1999.

The financial  statements presented herein as of September 30, 2000, and for the
three months and nine months ended  September  30, 2000 and  September  30, 1999
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.

The net loss per common share is based on the weighted  average number of common
shares outstanding in each period.  Potentially dilutive securities of 1,289,900
have been excluded from the weighted average shares outstanding since the effect
of these securities would be anti-dilutive.

(2)  Principals  of  Consolidation  -  The  accounts  of  the  Company  and  its
consolidated  subsidiaries are included in the consolidated financial statements
after elimination of significant inter-company accounts and transactions.

 (3)    Description of Securities

On May 22, 2000, ZAPWORLD.COM's Common Stock qualified for listing on the NASDAQ
SmallCap  stock exchange  under the stock symbo1  "ZAPP".  On July 19,2000,  ZAP
received  funding for the purchase of $3.0 million in a Preferred Stock offering
from Union Atlantic L.C.. The Union Atlantic  Capital L.C.  investors  purchased
$3.0 million of Series A-1 Convertible  Preferred Stock at a price of $1,000 per
share.  Additionally,  by October  24,  2000,  the Company  received  additional
funding  totaling $2.0 million from Union  Atlantic  Capital L.C. for Series A-2
Convertible  Preferred  Stock at a price of $1,000 per share.  This $2.0 million
preferred stock financing was received in two parts: $1,333,333.33 on October 6,
2000, and the remaining $666,666.67 on October 24, 2000. In the third quarter of
2000, the Company (1) realized $2,238 on the sale of stock to employees  through
a stock  purchase  plan and issued 257 shares;  (2) realized  $4,000 in proceeds
from the exercise of stock options and issued 1,000 shares of common stock;  (3)
sold 2,600 shares of common stock and realized  gross  proceeds of $13,000;  and
(4) issued  10,446  shares of common  stock in payment  for  current  and future
services.

During the 3rd Quarter,  Union  Atlantic  Capital L.C.  converted  628 shares of
Preferred  Stock for  155,989  shares of Common  Stock at an average  conversion
price of $4.35 per share.

During the third  quarter of 2000,  the  company  recorded a deemed  dividend on
preferred stock of $900,000.  This is the result of the conversion  price of the
convertible preferred stock issued during the quarter being less than the market
price of the common stock on the date of the  transaction.  All deemed dividends
related to the transaction  have been  recognized  during the third quarter as a
result of the preferred stock being immediately convertible at the discretion of
the holder.

On July 31, 2000,  ZAP issued 120,000 shares of common stock and $95,000 in cash
for the acquisition by merger of Aquatic  Propulsion  Technology,  Inc. (APT), a
Florida  electric sea scooter  company.  ZAP acquired all technology,  including
five patents on electric sea scooters,  assets and current operations  including
$465,700 in liabilities.


                                       6

<PAGE>

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" or ZAP)  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 scooters,
electric bicycle power kits, electric bicycles,  aquatic  propulsion,  and other
personal electric  transportation  vehicles.  The Company  manufactures  several
electric motor kits. The electric motor kit  manufacturing  and  installation of
the  motor  systems  to the  bicycles  and  scooters  is done at its  Sebastopol
location. The aquatic propulsion vehicles are primarily assembled at its Florida
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 & Wesson who provides the Company with
Law Enforcement Bicycles.  The Company has agreed to purchase at least 250 bikes
from Smith & Wesson in exchange for specific exclusive  distribution and pricing
rights.

The Company as of September 30, 2000 had a $3,660,000 sales backlog. The Company
expects to fill these orders within the next 75 days.

The Company's growth plan for the future combines a strategy of distribution and
acquisition while focusing on a program of "Five P's" which include  Production,
Product,  (Market) Penetration,  Personnel, and Profitability.  The intent is to
transform ZAP into a light electric transportation company with the standards of
measurement  similar to the auto industry.  The Company will continue to develop
products  with the goal of being the low cost  leader in the  industry.  Product
improvements, new product introductions, and the development of the ZAP electric
outlet  franchise  network  are  continuing  to enlarge  ZAP's  presence  in the
electric vehicle industry.

On July 1, 2000 ZAP completed its  acquisition  by merger of Aquatic  Propulsion
Technology,  Inc.  (APT),  a Florida  electric sea scooter  company.  The merger
documents were filed with the  California  Secretary of State on August 8, 2000.
ZAP acquired all  technology,  including  five patents on electric sea scooters,
assets, current operations from APT in exchange for 120,000 shares of ZAP common
stock,  $95,000 in cash and the assumption of APT's liabilities to the extent of
$465,700.

On July 19, 2000,  ZAP sold $3.0 million of a Preferred  Stock offering to Union
Atlantic Capital L.C. The Union Atlantic Capital L.C.  investors  purchased $3.0
million  of Series  A-1  Convertible  Preferred  Stock at a price of $1,000  per
share.  Additionally,  by October 24, 2000, the Company sold an additional  $2.0
million Series A-2 Convertible Preferred Stock at a price of $1,000 per share to
Union Atlantic Capital L.C.


                                       7

<PAGE>

On August 14,2000, ZAP announced that it had signed an agreement to form a joint
venture with Ningbo Topp Industrial Co. Ltd. of China.  The purpose of the joint
venture will be for manufacturing  and distributing  electric vehicles in China,
starting with the ZAPPY scooter. Under the terms of the joint venture, the joint
venture company will purchase key components  from ZAP,  assemble and distribute
the  ZAPPY in China,  and pay ZAP a royalty  on each  electric  scooter  sold in
China.  Additionally,  ZAP will  receive a share of the  profits  from the joint
venture. As of September 30, 2000 the joint venture has not been formed.

On October 6, 2000,  ZAP completed its purchase of Electric  Motorbike  Inc. The
Company  issued  140,000  shares of its common stock and $135,000 in cash as the
final purchase price.

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 Financial  Statements and
Notes) for the periods indicated:
<CAPTION>
                                                            Quarter ended September 30,  Nine months ended September 30,
                                                                2000          1999            2000            1999
                                                            ------------  ------------   ---------------  --------------
<S>                                                              <C>         <C>             <C>             <C>
     Statements of Income Data:
         Net sales........................................       100.0%      100.0%          100.0%          100.0%
         Cost of sales....................................        64.1        78.0            63.9            67.0
         Gross profit.....................................        35.9        22.0            36.1            33.0
         Operating expenses...............................        38.1        41.1            49.9            40.8
         Loss from operations.............................        (2.2)      (19.1)          (13.8)           (7.8)
         Other income (expense)...........................         0.9         0.8             1.3            (1.0)
         Loss before income taxes.........................        (1.3)      (18.3)          (12.5)           (8.8)
         Provision for income taxes.......................         0.0         0.0             0.0             0.0
         Net Loss.........................................        (1.3)      (18.3)          (12.5)           (8.8)
</TABLE>
Quarter Ended September 30, 2000 Compared to Quarter Ended September 30, 1999

     Net sales  for the  quarter  ended  September  30,  2000,  were  $3,948,000
compared to  $1,767,000  in the prior year,  an increase of $2,181,000 or 123 %.
The increase in sales in 2000 over the same period in 1999 was largely due to an
increased demand of the Company's products  worldwide.  The Company improved its
production  flow  and  output  to meet  the  greater  demand  for its  products.
Additionally,  the introduction of the new non-motorized scooter called the Kick
and acquisition of the electric seascooter company generated increased revenues.

     Gross profit  increased  as a percentage  of net sales to 36% in the second
quarter of 2000 from 22% in 1999.  The total gross profit  increased $ 1,028,000
or 265 %. The  increase in gross  margin  dollars can be  attributed  to margins
generated  from increased  sales dollars from new and existing  products for the
quarter. The increase in gross margin percentage can mainly be attributed to the
Company's  improved  efficiencies  within  production  and  distribution  of all
products. In addition, the Company has increased its emphasis on margins as well
as sales.

     Selling  expenses  in the  third  quarter  ended  September  30,  2000 were
$579,000  compared to the $280,000 for the third  quarter  ended  September  30,
1999.  This  was an  increase  of  $299,000  or 107%  from  1999 to  2000.  As a
percentage of sales,  selling  expenses  remained  constant at 16% of sales. The
increase  in selling  expenses  can  partially  be  attributed  to the hiring of
personnel to handle the expanded sales volume. Additional promotional efforts to
introduce the Company's  products to new markets have also added to the increase
in selling expenses.

     General and  administrative  expenses for the quarter  ended  September 30,
2000 were  $774,000.  This was an increase  of $410,000 or 113% from 1999.  As a
percentage of sales,  general and administrative  expenses decreased to 20% from
21% of net sales. Expense increases during the third quarter of 2000 as compared
to the third  quarter  of 1999 can be  partially  attributed  to the  hiring and
retention  of key  management  personnel  to oversee  and  direct the  Company's
expanding  business.  Additionally  in the third  quarter of 2000,  the  Company
incurred  consulting  and legal costs of $76,000  specifically  associated  with
prior  period  acquisitions.  Also in the third  quarter  of 2000,  the  Company
amortized  $40,000 towards  patents,  trademarks,  and goodwill costs associated
with acquisitions from the fourth quarter of 1999.


                                       8

<PAGE>

     Research and  development expenses  increased  $71,000  or 87% from the 3rd
quarter of 1999 as compared to the 3rd quarter of 2000.  As a percentage  of net
sales,  expenses decreased to 4% of sales in the 3rd quarter of 2000 as compared
to 5% of sales  in the 3rd  quarter  of 1999.  Expense  increases  in the  third
quarter  of 2000 as  compared  to the third  quarter  of 1999 were the result of
increased personnel hired to assist in the development of new products.

     Interest income increased  $40,000 in the third quarter of 2000 as compared
to the third quarter of 1999.  The increase is attributed  primarily to interest
income derived from proceeds from financing.

Nine Months Ended  September 30, 2000  Compared to Nine Months Ending  September
30, 1999

     Net sales for the nine months  ended  September  30,  2000 were  $8,128,000
compared  with  $4,444,000  in the nine months  ended  September  30,  1999,  an
increase of  $3,684,000  or 83%. The increase in sales,  both  domestically  and
overseas,  is primarily  attributable  to increased  production of the company's
products. Additionally, the Company has added new product lines to diversify its
core products available.

     Gross profit  dollars  increased in the third quarter of 2000 to $2,938,000
from  $1,466,000 in the third quarter of 1999 an increase of $1,472,000 or 100%.
The increase in gross profit  dollars can be  attributed  to the increase in net
sales  and  greater  cost  controls.  As a  percentage  of sales,  gross  profit
increased  to 36% in the third  quarter of 2000  compared  with 33% in the third
quarter  of 1999.  The  increase  in gross  margin  percentage  can be  directly
attributed  to  the  Company's   increased   efficiencies  with  its  production
processes.

     Selling  expenses  for the  nine  months  ended  September  30,  2000  were
$1,327,000 as compared to $729,000 for the nine months ended September 30, 1999.
This was an increase of $598,000 or 82% from 1999 to 2000.  As a  percentage  of
sales, selling expenses remained constant at 16% of sales. Added personnel costs
incurred  from the San  Francisco  location and  increased  promotional  efforts
worldwide led to increased costs in the nine months ended September 30, 2000.

     General and administrative expenses for the nine months ended September 30,
2000 were $2,269,000.  This is an increase of $1,391,000 or 158% from 1999. As a
percentage of sales,  general and  administrative  expense increased to 28% from
20% of net sales.  Expense  increases  during  the first nine  months of 2000 as
compared  to the  first  nine  months of 1999  occurred  due to  overall  salary
increases in all administrative  areas due to the pressures of low unemployment.
Legal costs  incurred from  acquisitions  and costs of options  associated  with
operational   consulting   contributed   to  $156,000  in  increased   expenses.
Additionally,  the amortization of patents,  trademarks,  and goodwill accounted
for $110,000 in expenses during the first nine months of 2000 from  acquisitions
completed during the fourth quarter of 1999. Furthermore,  the costs incurred to
manage the San Francisco  store accounted for $236,000 in expenses for the first
nine months of 2000 that were not incurred in the first nine months of 1999.

     Research and development expenses increased $259,000 or 126% from the first
nine  months  of 1999 as  compared  to the  first  nine  months  of  2000.  As a
percentage of net sales,  research and development  increased to 6 % of sales in
the first  nine  months  of 2000 as  compared  to 5% of sales in the first  nine
months of 1999. Increased personnel and facilities costs incurred to accommodate
new product development and improve existing products led to higher costs in the
first nine months of 2000.

     Interest  income  increased  $ 94,000 in the first  nine  months of 2000 as
compared to the first nine months of 1999. This increase is attributed primarily
to interest income derived from proceeds from financing.

     Other expense  decreased $ 59,000 from the first nine months of 1999 to the
first nine months of 2000.  This  decrease  can be primarily  attributed  to the
completion  of the  amortization  of the fair  value of  warrants  issued  to an
investment banker for securing equity financing for the Company during 1999.


                                       9

<PAGE>

Liquidity and Capital Resources

     The Company used cash from operations of $2,565,000 and $733,000 during the
nine  months  ended  September  30,  2000 and 1999  respectively.  Cash  used in
operations  in the  first  nine  months  of 2000 was the  result of the net loss
incurred  for the  period of  $1,014,000,  offset by net  non-cash  expenses  of
$372,000,  and the net change in operating assets and liabilities resulting in a
further use of cash of  $1,923,000.  Cash used in operations  for the first nine
months of 1999 was the result of the net loss incurred for the first nine months
of $391,000,  offset by net non-cash expenses of $884,000, and the net change in
operating assets and liabilities resulting in a use of cash of $1,226,000.

     Investing  activities used cash of $1,129,000 and $304,000 during the first
nine months ended  September  30, 2000 and 1999  respectively.  The uses of cash
were for the  purchase  of fixed  assets and  patents,  and the  acquisition  of
additional technology.

     Financing  activities  provided  cash  of $4,046,000 and $2,903,000  during
the first nine months ended  September  30,2000 and 1999  respectively.  In both
years,  the cash  provided by financing  activities  resulted  from the sales of
common and preferred stock,  $3,561,000 and $3,750,000 for the first nine months
ended September 30, 2000 and 1999 respectively,  offset by principal payments on
outstanding debt.

       At  September  30,  2000,  the Company had cash and cash  equivalents  of
$3,536,000  as compared to  $2,341,000  at September  30, 1999. At September 30,
2000,  the  Company  had working  capital of  $6,447,000  as compared to working
capital of  $3,970,000  at September  30, 1999.  The  increases in both cash and
working  capital in the first nine  months of 2000 from the first nine months of
1999 are mostly due to the equity financing raised during the year. The Company,
at  present,  does  not  have a credit  facility  in place  with a bank or other
financial  institution.  Additionally,  by October 24, 2000, the Company sold an
additional $2.0 million in Preferred  Stock financing to Union Atlantic  Capital
L.C. The Company  believes that the cash on hand at September 30, 2000,  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,   improving  and
increasing   distribution   channels,   establishing   ZAP  franchised   stores,
introducing  new products,  improving  existing  product lines and  developing a
strong corporate infrastructure.

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. As the company is  marketing  worldwide,  it is not impacted
100% by U.S. seasonality.

Inflation

     A majority of 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.


                                       10

<PAGE>

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     There were no legal proceedings.

Item 2.  Changes in Securities

     There were no changes in rights of securities holders.

Item 3.  Defaults Upon Senior Securities

     There were no defaults upon senior securities.

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

     There were no submissions of matters to a vote of security holders.

Item 5.  Other Information

     There were no major contracts signed during the period.

Item 6.  Exhibits and Reports on Form 8-K

     No reports on form 8-K were filed during the quarter.


                                       11

<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


Date
         ------------------       ----------------------------------------------
                                           John Dabels - President