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

                                   FORM 10-QSB

 (X) Quarterly  report  pursuant to Section 13 or 15(d) of the  Securities and
 Exchange Act of 1934.

                  For the quarterly period ended June 30, 2000.

 ( ) Transition report pursuant to Section 13 or 15(d) of the Exchange Act for
 the transition period from _________________ to ____________.


                         Commission File Number: 0-30492

                        DIVERSIFIED RESOURCES GROUP, INC.
                        ---------------------------------
               (Exact name of registrant as specified in charter)

          Utah                                            84-0771180
          ----                                            ----------
(State of Incorporation)                               (I.R.S. Employer I.D. No)

                    355 Interstate Blvd., Sarasota, Fl 34232

                    (Address of Principal Executive Offices)

                                 (941) 923-1949
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

Check whether the registrant:  (1) has filed all reports required to be filed by
Section by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 ( )

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
stock as of July 15, 2000.

                            93,237,391 Common Shares

Transitional Small Business Disclosure Format:

                                 YES ( ) NO (X)



                                       1
<PAGE>

                        DIVERSIFIED RESOURCES GROUP, INC.

                              INDEX TO FORM 10-QSB

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements (unaudited)

           Balance Sheet as of December 31, 2000 and June 30, 2000 ............3

           Statements of Operations for the three months and
             six months ended June 30, 2000 and 1999 ..........................5

           Statement of Stockholders' Equity (Deficit) for the six
             months ended June 30, 2000........................................7

           Statements of Cash Flows for the three and six months ended
             June 30, 2000 and 1999 ..........................................10

           Notes to Financial Statements .....................................12

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations .............................................26


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings..................................................30
Item 2.    Changes in Securities..............................................30
Item 3.    Defaults Upon Senior Securities....................................30
Item 4.    Submission of Matters to a Vote of Securities Holders .............30
Item 5.    Other Information..................................................30
Item 6.    Exhibits and Reports on Form 8-K...................................30

Signatures ...................................................................31



                                       2
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                           Consolidated Balance Sheets

ASSETS

                                                     June 30,     December 31,
                                                       2000          1999
                                                   ------------  ------------
                                                   (Unaudited)
CURRENT ASSETS

  Cash                                             $         28  $      3,565
  Inventory                                              12,098        14,891
  Accounts receivable                                     2,325         5,571
  Prepaid expenses, net                                       -         8,433
  Undeposited funds                                          -          1,080
                                                   ------------  ------------

     Total Current Assets                                14,451        33,540
                                                   ------------  ------------

FIXED ASSETS (Note 2)

  Computers                                              41,238        41,238
  Test equipment                                          1,569         1,569
  Office equipment                                       20,380        20,380
  Software                                               32,475        32,475
  Accumulated depreciation                              (89,486)      (83,145)
                                                   ------------  ------------

     Net Fixed Assets                                     6,176        12,517
                                                   ------------  ------------

OTHER ASSETS

  Deposits on land, net (Note 3)                              -             -
                                                   ------------  ------------

     Total Other Assets                                       -             -
                                                   ------------  ------------

     TOTAL ASSETS                                  $     20,627  $     46,057
                                                   ============  ============

See Notes to Financial Statements


                                       3
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                     Consolidated Balance Sheets (Continued)


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                     June 30,     December 31,
                                                       2000          1999
                                                   ------------  ------------
                                                    (Unaudited)
CURRENT LIABILITIES

  Cash overdraft                                   $          -  $        987
  Accounts payable - trade                               44,143        75,446
  Accounts payable - related party (Note 8)              48,660        58,078
  Accrued expenses (Note 4)                              60,013        94,308
  Current portion of long-term debt (Note 7)             19,858        19,858
  Notes payable - related party (Note 8)              1,038,332       375,991
                                                   ------------  ------------

     Total Current Liabilities                        1,211,006       624,668
                                                   ------------  ------------

LONG-TERM DEBT (Note 7)                                  38,088        48,018
                                                   ------------  ------------

     Total Liabilities                                1,249,094       672,686
                                                   ------------  ------------

COMMITMENTS AND CONTINGENCIES (Note 3)

STOCKHOLDERS' EQUITY (DEFICIT)

  Preferred stock, $0.001 par value, 1,000,000
   shares authorized, -0- shares issued and
   outstanding                                                -             -
  Common stock, $0.001 par value, 100,000,000
   shares authorized; 92,075,831 and 92,075,831
   issued and outstanding, respectively                  93,237        92,076
  Additional paid-in capital                          6,383,715     6,326,798
  Accumulated deficit prior to development stage     (4,512,614)   (4,512,614)
  Accumulated deficit from inception of the
   development stage on December 31, 1998            (3,192,805)   (2,532,889)
                                                   ------------  ------------

     Total Stockholders' Equity (Deficit)            (1,228,467)     (626,629)
                                                   ------------  ------------

 TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY (DEFICIT)                                $     20,627  $     46,057
                                                   ============  ============

See Notes to Financial Statements



                                       4
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                  From
                                                                                            Inception of the
                                                                                               Development
                                                                                                Stage on
                                         For the                 For the                      December 31,
                                     Six Months Ended        Three Months Ended               1998 Through
                                         June 30,                June 30,                       June 30,
                                    2000          1999       2000         1999                     2000
                                  ---------     --------   ---------    ---------             -------------
<S>                               <C>            <C>       <C>          <C>                   <C>
REVENUES

  Sales, net                      $ 42,637      $      -   $  20,734    $       -              $  62,122
  Cost of sales                     13,213             -       3,308            -                 23,519
                                  ---------     --------   ---------    ---------             -------------

    Gross Margin                    29,424             -      17,426            -                 38,603
                                  ---------     --------   ---------    ---------             -------------

OPERATING EXPENSES

  General and administrative        150,571            -      77,496            -               602,429
  Depreciation and amortization       6,340            -         800            -                29,207
                                  ---------     --------   ---------    ---------             -------------

     Total Operating Expenses       156,911            -      78,296            -               631,636
                                  ---------     --------   ---------    ---------             -------------

LOSS FROM OPERATIONS               (127,487)           -     (60,870)           -              (593,033)
                                  ---------     --------   ---------    ---------             -------------

OTHER INCOME (EXPENSE)

  Allowance - land                 (491,940)           -    (262,254)           -              (951,312)
  Interest expense                  (40,489)           -     (24,695)           -               (47,639)
  Other income                            -            -           -            -                 5,400
                                  ---------     --------   ---------    ---------             -------------

     Total Other Income (Expense)  (532,429)           -    (286,949)           -              (993,551)
                                  ---------     --------   ---------    ---------             -------------
LOSS BEFORE DISCONTINUED
 OPERATIONS                        (659,916)           -    (347,819)           -            (1,586,584)
                                  ---------     --------   ---------    ---------             -------------

LOSS FROM DISCONTINUED
 OPERATIONS                               -     (417,786)          -     (430,261)           (1,606,221)
                                  ---------     --------   ---------    ---------             -------------

LOSS BEFORE INCOME TAXES           (659,916)    (417,786)   (347,819)    (430,261)           (3,192,805)

INCOME TAX EXPENSE                        -            -           -            -                     -
                                  ---------     --------   ---------    ---------             -------------

NET LOSS                         $ (659,916)   $(417,786)  $(347,819)   $(430,261)          $(3,192,805)
</TABLE>


See Notes to Financial Statements


                                       5
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                             (Unaudited) (Continued)

<TABLE>
<CAPTION>
                                                                                                  From
                                                                                             Inception of the
                                                                                               Development
                                                                                                Stage on
                                             For the                      For the              December 31,
                                         Six Months Ended          Three Months Ended          1998 Through
                                             June 30,                     June 30,               June 30,
                                         2000         1999            2000         1999            2000
                                      ---------    --------         --------     --------    ---------------
<S>                                   <C>          <C>              <C>          <C>         <C>
BASIC LOSS PER SHARE
  Loss before discontinued operations  $ (0.01)    $     -           $(0.00)      $     -
  Discontinued operations                    -       (0.01)               -         (0.01)
                                      ---------    --------         --------     --------    ---------------

BASIC LOSS PER SHARE                   $ (0.01)    $ (0.01)          $(0.00)      $ (0.01)
                                      =========    ========         ========     ========    ===============

WEIGHTED AVERAGE SHARES
 OUTSTANDING                         92,701,886   59,274,673      92,165,182   77,304,660
                                      =========    =========        ========     ========    ===============
</TABLE>


See Notes to Financial Statements


                                       6
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>
                                                                        Additional    Stock
                                              Common Stock              Paid-in       Subscription   Accumulated
                                          Shares         Amount         Capital       Receivable     Deficit
                                      -------------   -----------     -------------  -------------   --------------
<S>                                   <C>             <C>             <C>            <C>             <C>
Balance, December 31, 1997              19,091,973    $    19,092     $   3,332,971  $   (115,000)   $ (9,779,570)

Adjustment for reduction of
 subscription price                              -              -          (103,500)      103,500               -

Common stock issued for cash
 at $0.05 per share                      4,707,504          4,708           230,667             -               -

Common stock issued for settlement
 of debt at $0.05 per share             11,952,380         11,952           585,666             -               -

Common stock issued for subscriptions
 receivable at $0.05 per share           5,292,496          5,292           259,333      (264,625)              -

Net income for the year
 ended December 31, 1998                         -              -                 -             -       5,266,956
                                      -------------   -----------     -------------  -------------   --------------

Balance, December 31, 1998              41,044,353    $    41,044     $   4,305,137  $   (276,125)   $ (4,512,614)
                                      -------------   -----------     -------------  -------------   --------------
</TABLE>

See Notes to Financial Statements


                                       7
<PAGE>


               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
      Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

<TABLE>
<CAPTION>
                                                                         Additional   Stock
                                              Common Stock               Paid-in      Subscription   Accumulated
                                          Shares         Amount          Capital      Receivable     Deficit
                                      -------------   -----------     -------------  -------------   -----------
<S>                                   <C>             <C>             <C>            <C>             <C>
Balance, December 31, 1998              41,044,353    $    41,044     $  4,305,137   $   (276,125)   $ (4,512,614)

Receipt of stock subscription
 receivable                                      -              -                -        276,125               -

Common stock issued for services
 at $0.031 per share                     2,208,400          2,208           66,252              -               -

Common stock issued for services
 at $0.03 per share                      4,390,000          4,390          127,310              -               -

Common stock issued for services
 at $0.044 per share                       242,000            242           10,406              -               -

Common stock issued for services
 at $0.35 per share                      2,031,478          2,032           69,070              -               -

Common stock issued for services
 at $0.035 per share                       840,000            840           28,560              -               -

Common stock issued for services
 at $0.033 per share                     1,880,000          1,880           60,160              -               -

Common stock issued for cash,
 services and forgiveness of debt
 at $0.044 per share                    30,439,600         30,440        1,308,903              -               -

Common stock issued for services
 at $0.04 per share                      9,000,000          9,000          351,000              -               -

Net (loss) for the year
 ended December 31, 1999                         -              -                -              -      (2,532,889)

Balance, December 31, 1999              92,075,831         92,076        6,326,798              -      (7,045,503)
</TABLE>


See Notes to Financial Statements


                                       8
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
      Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

<TABLE>
<CAPTION>

                                                                        Additional    Stock
                                               Common Stock             Paid-in       Subscription    Accumulated
                                           Shares        Amount         Capital       Receivable      Deficit
                                      -------------   -----------     -------------  -------------   -----------
<S>                                   <C>             <C>             <C>            <C>               <C>
Common stock issued for debt at
 $0.05 per share (unaudited)             1,161,560    $    1,161       $    56,917     $       -      $        -

Net loss for the period
 ended June 30, 2000
 (unaudited)                                     -             -                 -             -        (659,916)
                                      -------------   -----------     -------------  -------------   -----------

Balance, June 30, 2000
 (unaudited)                            93,237,391    $   93,237       $ 6,383,715     $       -     $(7,705,419)
</TABLE>

See Notes to Financial Statements


                                       9
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                             From
                                                                                        Inception of the
                                                                                          Development
                                                                                            Stage on
                                             For the                  For the              December 31,
                                       Six Months Ended         Three Months Ended        1998 Through
                                            June 30,                  June 30,               June 30,
                                       2000          1999         2000        1999             2000
                                   -----------    ----------   ----------   ----------    ---------------
<S>                                <C>              <C>           <C>         <C>          <C>
CASH FLOWS FROM OPERATING
 ACTIVITIES:

   Net loss                        $ (659,916)   $ (417,786)   $ (347,819)   $(430,261)     $(3,192,805)
   Adjustments to reconcile net
    loss to net cash (used)
    in operating activities:
     Depreciation and amortization      8,781        14,473         3,240        7,237           34,087
     Stock issued for services              -       122,347             -      122,347        1,425,300
     Stock issued for employment
      settlement                            -        47,179             -       47,179                -
     Stock issued for debt             58,078             -        58,078            -           58,078
     Allowance of deposits on land    491,940             -       262,254            -          951,312
     Stock subscription received by
      services and forgiveness              -             -             -            -          276,125
   Changes in assets and liabilities:
     (Increase) decrease in inventory   2,793           200         1,714       20,260          (11,898)
     (Increase) decrease in accounts
      receivable                        3,246             -        (1,143)      20,874           (2,325)
     Decrease in prepaid expenses       8,433         2,284           899        2,081            3,183
     Decrease in other assets           1,080         5,045             -       11,589            5,045
     Increase (decrease) in cash
      overdraft                          (987)        9,186          (816)       7,731          (17,481)
     Increase (decrease) in accounts
      payable                         (40,720)      (65,583)      (24,882)    (169,953)           8,936
     Increase (decrease) in accrued
      expenses                        (34,295)       (9,774)       (3,769)     173,618         (129,376)
                                   -----------    ----------   ----------   ----------    ---------------

     Net Cash (Used) by Operating
       Activities                    (161,567)     (292,429)      (52,244)    (187,298)        (591,819)
                                   -----------    ----------   ----------   ----------    ---------------

CASH FLOWS FROM INVESTING
 ACTIVITIES:

   Purchase of fixed assets                 -        (5,000)            -       (5,000)              -
   (Increase) in deposits on land    (491,940)            -      (262,254)           -        (951,312)
                                   -----------    ----------   ----------   ----------    ---------------
Net Cash (Used) by Investing
   Activities                        (491,940)       (5,000)     (262,254)      (5,000)       (951,312)
                                   -----------    ----------   ----------   ----------    ---------------
</TABLE>

See Notes to Financial Statements

                                       10
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                             (Unaudited) (Continued)

<TABLE>
<CAPTION>
                                                                                                    From
                                                                                              Inception of the
                                                                                                 Development
                                                                                                  Stage on
                                                 For the                    For the              December 31,
                                            Six Months Ended          Three Months Ended        1998 Through
                                                 June 30,                   June 30,               June 30,
                                            2000          1999          2000        1999            2000
                                        -----------    ----------   ----------   ----------    ---------------
<S>                                     <C>               <C>          <C>       <C>            <C>
CASH FLOWS FROM FINANCING
 ACTIVITIES:

   Payments on notes payable -
    related parties                   $   (5,500)      $       -    $ (5,500)    $       -     $     (5,500)
   Proceeds from notes payable -
     related parties                     677,600               -     336,414             -        1,053,591
   Payments on notes payable             (22,130)        (12,905)    (17,177)      (12,905)         (57,784)
   Collections from related parties            -           6,984           -             -            6,984
   Issuance of common stock for cash           -         300,875           -       205,203          543,393

   Net Cash Provided by Financing
       Activities                        649,970         294,954     313,737       192,298        1,540,684
                                        -----------    ----------   ----------   ----------    ---------------

Net Increase (Decrease) in Cash           (3,537)         (2,475)       (761)            -           (2,447)

CASH AT BEGINNING OF PERIOD                3,565           2,475         789             -            2,475
                                        -----------    ----------   ----------   ----------    ---------------

CASH AT END OF PERIOD                 $       28       $       -    $     28     $       -     $         28
                                        ===========    ==========   ==========   ==========    ===============

CASH PAID FOR:

  Interest expense                    $        -       $       -    $      -     $       -     $          -
  Income taxes                        $        -       $       -    $      -     $       -     $          -

NON CASH FINANCING ACTIVITIES:

  Common stock issued in settlement
    of debt                           $   58,078       $       -    $      -     $       -     $    148,078
  Common stock issued for
    subscriptions receivable          $        -       $ 829,803    $      -     $ 829,803     $          -
  Common stock issued for fixed asset $        -       $       -    $      -     $       -     $      5,000
  Common stock issued for services    $        -       $ 122,347    $      -     $ 122,347     $    122,347
  Common stock issued in settlement
    of employment agreement           $        -       $  47,179    $      -     $  47,179     $          -

</TABLE>

See Notes to Financial Statements


                                       11
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

         The  Company  was  incorporated  under the laws of the State of Utah on
         July 31,  1984.  The Company has a  wholly-owned  Delaware  subsidiary,
         named Data 1, Inc., a wholly-owned subsidiary named Memory 1, Inc., and
         a wholly-owned subsidiary named Cordless Power Corporation. The Company
         changed its name to Diversified  Resources Group, Inc. in May 1999. The
         Company  has not  paid  dividends.  Dividends  that  may be paid in the
         future will  depend on the  financial  requirements  of the Company and
         other relevant  factors.  The Company is considered a development stage
         company  per  SFAS  No.  7  because  it  has  not  substantially  began
         operations.

         Memory 1, Inc. (Mem 1) was organized February 6, 1996 under the laws of
         the State of  Florida  to engage in the  business  which  includes  the
         manufacturing  and marketing of computer memory  devices.  During 1999,
         the Company  discontinued  the  computer  memory  business and Mem 1 is
         currently inactive.

         Cordless Power  Corporation was organized April 19, 1999 under the laws
         of the State of Florida to engage in any  lawful  act or  activity  for
         which  corporations may be organized under the General  Corporation Law
         of Florida.  Cordless Power  Corporation  is currently  engaging in the
         business of retailing cellular telephone batteries and accessories.

         On May 17, 1999, the  shareholders of the Company  approved and amended
         the  Articles of  Incorporation  to increase the  Company's  authorized
         common shares to 100,000,000.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a. Accounting Method

         The Company's  consolidated financial statements are prepared using the
         accrual method of  accounting.  The Company has adopted a calendar year
         end.



                                       12
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         b. Basic Income (Loss) Per Share

         The  computation  of basic  income  (loss) per share of common stock is
         based on the weighted average number of shares  outstanding at the date
         of the consolidated financial statements as follows:
<TABLE>
<CAPTION>

                                           For the                          For the
                                      Six Months Ended                 Three Months Ended
                                          June 30,                          June 30,
                                      2000           1999            2000             1999
                                   ---------      ----------       ---------       ---------
<S>                               <C>             <C>               <C>            <C>
Numerator:
 Loss before discontinued
  operations                    $  (659,916)     $         -     $  (347,819)   $          -
 Discontinued operations        $         -      $  (417,786)    $         -    $   (430,261)

Denominator (weighted
 average number
 of shares outstanding)          92,701,286       59,274,673      92,165,182      77,304,660

Income (loss) per share
 Net loss before
  discontinued operations       $     (0.01)     $         -     $    (0.00)    $          -
 Net income (loss)
  discontinued operations       $         -      $     (0.01)    $        -     $      (0.01)
                                   ---------      ----------       ---------       ---------
                                $     (0.01)     $     (0.01)    $    (0.00)    $      (0.01)
</TABLE>


         Dilutive  loss per share is not  presented as there are no  potentially
         dilutive items outstanding.

         c.  Income Taxes

         At June 30, 2000, the Company had a net operating loss  carryforward of
         approximately  $7,700,000  that may be offset  against  future  taxable
         income in various  years through 2020. No tax benefit has been reported
         in the financial statements because the Company believes there is a 50%
         or greater chance the carryforward will expire unused. Accordingly, the
         potential  tax  benefits  of the  loss  carryforward  are  offset  by a
         valuation allowance of the same amount.

         d. Cash Equivalents

         The Company considers all highly liquid investments and deposits with a
         maturity of three months or less when purchased to be cash equivalents.

                                       13
<PAGE>

               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         e. Revenue Recognition

         Revenue is recognized  upon  shipment of goods to the  customer.  Sales
         primarily require immediate payment or cash on delivery.

         f.  Restated Consolidated Financial Statements

         Prior period  consolidated  financial  statements have been restated to
         conform with current consolidated financial statement presentation.

         g.  Fixed Assets

         Property and equipment are stated at cost. Depreciation of property and
         equipment is computed using the straight-line method over the estimated
         useful  lives of the  related  assets,  primarily  from  three to seven
         years.

         h.  Principles of Consolidation

          The June 30, 2000 consolidated  financial  statements include those of
          the Company and its wholly-owned  subsidiaries Data 1, Inc., Memory 1,
          Inc., and Cordless Power  Corporation.  All  significant  intercompany
          accounts and transactions have been eliminated.

         i.  Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities and disclosure of contingent  assets and liabilities at the
         date of the financial  statements and the reported  amounts of revenues
         and expenses during the reporting  period.  Actual results could differ
         from those estimates.

         j.  Advertising

         The Company  follows the policy of charging the costs of advertising to
         expense as incurred.



                                       14
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         k.  Recent Accounting Pronouncements

         In June 1998, the FASB issued SFAS No. 133,  "Accounting for Derivative
         Instruments and Hedging  Activities" which addresses the accounting for
         derivative   instruments,   including  certain  derivative  instruments
         embedded in other contracts,  and hedging  activities.  SFAS No. 133 is
         effective for all fiscal  quarters of all fiscal years  beginning after
         June 15,  1999 and is not  required  to be applied  retroactively.  The
         adoption  of this  statement  had no material  impact on the  Company's
         financial statements.

         l.  Inventory

         Inventory  is  stated  at the lower of cost  (computed  on a  first-in,
         first-out  basis)  or  market.   The  inventory  consists  of  cellular
         telephone batteries and accessories.

         m.  Long-Lived Assets

         All long-lived  assets are evaluated yearly for impairment per SFAS No.
         121,  "Accounting  for the  Impairment  of  Long-Lived  Assets  and for
         Long-Lived  Assets  to be  Disposed  of."  Any  impairment  in value is
         recognized as an expense in the period when the impairment occurs.

         n.  Unaudited Consolidated Financial Statements

         The accompanying  unaudited  consolidated  financial statements include
         all  of the  adjustments  which,  in the  opinion  of  management,  are
         necessary for a fair  presentation.  Such  adjustments  are of a normal
         recurring nature.

NOTE 3 - COMMITMENTS AND CONTINGENCIES

         a. Leases

         Effective  June  30,  1999,  the  Company   terminated  its  lease  for
         facilities in Sarasota, Florida it had been leasing on a month-to-month
         basis.  Lease  payments  were  $1,551 per month.  The Company has since
         relocated to a facility  leased by an  affiliate  company and pays rent
         under a consulting agreement with this company.



                                       15
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 3 - COMMITMENTS AND CONTINGENCIES (Continued)

         b. Employment Contracts

         Effective  August  11,  1996,  the  Company  has  entered  into  5 year
         employment  agreements with the President and Chief Financial  Officer.
         These contracts were terminated in 1999.

         On May 31,  1999,  the Company and the  President  and Chief  Executive
         Officer  of  the  Company  entered  into  a  settlement  of  employment
         agreement,   wherein,   for  certain   considerations,   including  his
         resignation,  he would receive  $100,000 plus continued health benefits
         payable  over a 54 week period.  On July 12, 1999,  the Company and the
         Vice President - Finance and Chief  Financial  Officer  entered into an
         identical agreement (Note 4).

         c.  Real Estate

         On July 31, 1999, the Company entered into an agreement  whereby it was
         assigned the rights to acquire a 607.74 acre tract of undeveloped  land
         in Wake County, North Carolina from Matheny Development, LLC, ("Matheny
         Development"),  a North Carolina limited liability  controlled by James
         M.  Matheny,  one of  the  Company's  directors  for  $21,000,000.  The
         agreement calls for a $100,000  earnest money deposit on signing,  with
         75% of the $21,000,000 purchase price due in cash at July 31, 1999, and
         the  remaining  25%  balance  due in the  form of an  interest  bearing
         promissory  note. As part of the assignment,  the Company agreed to pay
         Matheny Development $2,100,000 as liquidated damages if the purchase is
         not  closed by the due date plus  extensions,  unless the  contract  is
         breached by Matheny  Development.  If Matheny Development  breaches the
         contract,  the Company has the option of pursuing all necessary actions
         to obtain specific  performance by Matheny Development or to assign the
         contract  to  Matheny   Development  and  pay  liquidated   damages  of
         $2,100,000.  The  assignment  also  provides  that  the  Company  pay a
         non-refundable  extension  fee of  $76,562  per  month  to  extend  the
         contract  beyond the July 31, 1999 closing  date.  The Company has paid
         $951,312 in extension payments as of December 31, 1999 and has extended
         the agreement through August 2000.

         An  allowance  of $951,312  has been set up against  these land deposit
         payments due to  uncertainty  of the Company  being able to finance the
         transaction by the August 2, 2000 due date.


                                       16
<PAGE>




               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999


NOTE 3 - COMMITMENTS AND CONTINGENCIES (Continued)

         d.  Consulting Fee Agreement

         On July 7, 1999,  the Company  entered into a consulting  fee agreement
         with United Funding Solutions,  Inc. (United) wherein the Company would
         pay United  $100,000  per year for 5 years.  Additionally,  the Company
         issued United  10,000,000  shares of common stock valued at the trading
         price of $0.032 per share, or $32,000.  Pursuant to the agreement,  the
         Company could be required to issue up to 90,000,000  additional  shares
         of common  stock.  The stock  would be issued at a formula of one share
         for each dollar of gross profit earned by the Company.

NOTE 4 - ACCRUED EXPENSES

         The Company's accrued expenses is comprised of the following items:

                                                    June 30,        December 31,
                                                      2000              1999

         Accrued directors fees                    $  10,000       $   4,000
         Settlement agreement - former CFO             6,923          48,402
         Settlement agreement - former President           -          34,615
         Accrued interest payable                     42,805           7,150
         Other                                           285             141
                                                   ---------       ---------

              Total                                $  60,013       $  94,308
                                                  ============   ============

         The  settlement  agreements  for the former  President and CFO call for
         bi-weekly  payments  of $3,462 to be made to each  party  until paid in
         full.  During the six months ended June 30, 2000,  the Company paid all
         amounts due to its former President.

NOTE 5 - GOING CONCERN

         The Company's  consolidated  financial  statements  are prepared  using
         generally accepted accounting  principles applicable to a going concern
         which  contemplates  the  realization  of  assets  and  liquidation  of
         liabilities in the normal course of business.  The Company has incurred
         losses from its  inception  through March 2000.  Management  intends to
         restructure  its product lines to generate  desired  levels of revenues
         and profit as it emerges from the bankruptcy  proceedings  discussed in
         Note 10.

         Management intends to restructure its product lines to generate desired
         levels  of  revenues   and  profit  as  it  emerges   from   bankruptcy
         proceedings.



                                       17
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 5 - GOING CONCERN (Continued)

         The company's  cellular  telephone  battery and  accessory  project has
         proven  to  lack  significant   enough  profit  margins  to  support  a
         significant distribution system and as a result is being de-emphasized.

         The most  promising  area is real  estate  operations.  The  Company is
         pursuing a strategy  of closing on real  estate  without a  significant
         down payment and relying on parcel sales to cover interest, development
         costs and shortfalls in operations.  In the event the Company is unable
         to close on the land it faces significant penalties.

         The  Company  is also  pursuing  a  highly  speculative  and  uncertain
         acquisition.  The  Company  estimates  it would need  between $2 and $5
         million to complete the  acquisition,  $2.5 million for real estate and
         $1 million for overhead and battery and  cellular  telephone  accessory
         operations.

         Until the Company can generate  sufficient  funding or revenues to meet
         these needs,  management and  shareholders are committed to meeting the
         minimum operating needs of the Company.



                                       18
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 6 - LOSS FROM DISCONTINUED OPERATIONS

         During September 1999, the Board of Directors of the Company decided to
         discontinue the business that includes the  manufacturing and marketing
         of computer memory devices due to falling margins in the industry.  The
         following is a summary of the loss from discontinued operations:
<TABLE>
<CAPTION>

                                                                                                       From
                                                                                                 Inception of the
                                                                                                    Development
                                                                                                      Stage on
                                               For the                   For the                    December 31,
                                           Six Months Ended          Three Months Ended            1998 Through
                                              June 30,                    June 30,                   June 30,
                                          2000          1999         2000          1999                2000
                                       ----------    -----------  ----------    -----------        -------------
<S>                                    <C>           <C>          <C>           <C>                <C>
REVENUES

  Sales, net                           $        -     $   19,595  $       -     $   20,630          $    19,595
  Cost of sales                                 -         20,356          -         20,373               20,292
                                       ----------    -----------  ----------    -----------        -------------

     Gross Margin                               -           (761)         -            257                 (697)
                                       ----------    -----------  ----------    -----------        -------------

EXPENSES

  General and administrative                    -        195,048          -        131,709            1,473,580
  Depreciation and amortization                 -         14,473          -          7,237                    -
                                       ----------    -----------  ----------    -----------        -------------

     Total Expenses                             -        209,521          -        138,946            1,473,580
                                       ----------    -----------  ----------    -----------        -------------

LOSS FROM OPERATIONS                            -       (210,282)         -       (138,689)          (1,474,277)
                                       ----------    -----------  ----------    -----------        -------------

OTHER INCOME (EXPENSE)

  Interest expense                              -         (6,729)         -         (3,365)              (5,694)
  Other income                                  -          5,400          -          1,024                    -
  Other expense                                 -       (306,175)         -       (289,231)            (226,250)
                                       ----------    -----------  ----------    -----------        -------------

     Total Other Income (Expense)               -       (307,504)         -       (291,572)            (231,944)

LOSS BEFORE
  REORGANIZATION ITEMS                          -       (517,786)         -       (430,261)          (1,706,221)
                                       ----------    -----------  ----------    -----------        -------------
</TABLE>



                                       19
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 6 - LOSS FROM DISCONTINUED OPERATIONS (continued)

         During September 1999, the Board of Directors of the Company decided to
         discontinue the business that includes the  manufacturing and marketing
         of computer memory devices due to falling margins in the industry.  The
         following is a summary of the loss from discontinued operations:

<TABLE>
<CAPTION>
                                                                                                        From
                                                                                                  Inception of the
                                                                                                    Development
                                                                                                      Stage on
                                                For the                   For the                   December 31,
                                           Six Months Ended          Three Months Ended             1998 Through
                                                June 30,                  June 30,                    June 30,
                                          2000          1999         2000        1999                   2000
                                       ----------    -----------  ----------    -----------        -------------
<S>                                    <C>           <C>          <C>           <C>                <C>
REORGANIZATION ITEMS

  Gain on restructuring of debt                -        100,000           -              -              100,000
                                       ----------    -----------  ----------    -----------        -------------

   Total Income from
     Reorganization Items                      -        100,000           -              -              100,000
                                       ----------    -----------  ----------    -----------        -------------

LOSS BEFORE INCOME TAXES                       -       (417,786)          -       (430,261)          (1,606,221)

INCOME TAX EXPENSE                             -              -           -              -                    -
                                       ----------    -----------  ----------    -----------        -------------

NET LOSS                               $       -     $ (417,786)  $       -     $ (430,261)        $ (1,606,221)
                          ==========  ==========  ========== ========== ============
</TABLE>

         No income tax benefit has been attributed to the loss from discontinued
operations.



                                       20
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999



NOTE 7 - LONG-TERM DEBT

         Long term debt at June 30, 2000 and December 31, 1999  consisted of the
         following:

                                                        June 30,    December 31,
                                                          2000         1999
         Various notes payable given in settlement      --------    -----------
         of accounts payable, non-interest bearing,
         quarterly payments of $7,405, unsecured.       $57,946        $67,876

         Less current maturities                        (19,858)       (19,858)
                                                        --------   ------------

         Long-term debt                                 $38,088        $48,018
                                                        ========   ============

         Aggregate  maturities  required on long-term debt at March 31, 2000 and
         December 31, 1999 are as follows:

                 Year                              Amount          Amount

              2000                                $     19,858   $     19,858
              2001                                      19,858         19,858
              2002                                      18,230         19,858
              2003                                           -          8,302
                                                  ------------   ------------

               Total                              $     57,946   $     67,876
                                                  ============   ============

         This amount  represents  notes issued under the bankruptcy  proceedings
         discussed in Note 10 as payment for certain amounts due as provided for
         in the Company's  Plan of  Reorganization.  The notes are  non-interest
         bearing, interest has been imputed at 8% per annum.

         The  balances are shown net of a discount of $30,909.  Amortization  of
         the  discount  amounted  to $2,440  and $5,694  at,  June 30,  2000 and
         December 31, 1999, respectively.

                                       21
<PAGE>

NOTE 8 - RELATED PARTY TRANSACTIONS

         Notes Payable

         Tampa Bay Financial, Inc., a related party, loaned the Company $667,840
         and  $375,791  during the six months  ended June 30,  2000 and the year
         ended December 31, 1999, respectively.  The notes are payable on demand
         and accrue  interest  at 10% per  annum,  unsecured.  Interest  expense
         amounted to $35,609 and $7,150 at June 30, 2000 and  December 31, 1999,
         respectively.

         An officer  loaned the Company $200 during 1999. The note is payable on
         demand  and  accrues  interest  at 10% per annum,  unsecured.  Interest
         expense  amounted  to $10 and $-0- at June 30,  2000 and  December  31,
         1999, respectively.


         Accounts Payable

         The Company owes $47,950 to Tampa Bay Financial, Inc., a related party,
         for  professional  and consulting  services  performed during the three
         months ended June 30, 2000 and December 31, 1999, respectively.

          Common Stock

          the Company issued  1,161,560  shares of common stock on April 7, 2000
          for repayment of $58,058 due to Tampa Bay Financial,  a related party,
          for  professional  fees and expense paid on behalf of the Company that
          were incurred and accrued during the year ended December 31, 1999.

NOTE 9 -  STOCK SUBSCRIPTION RECEIVABLE

          Stock  subscriptions  receivable at December 31, 1998 included amounts
          of $6,250 and $5,250 which  represented  notes given to the Company as
          consideration  for stock options  exercised by the President and Chief
          Executive  Officer,  and  the  Vice  President  -  Finance  and  Chief
          Financial Officer,  respectively.  The balance of $264,625 represented
          an amount  subscribed to by a related party to provide working capital
          to the  Company  while the Company was  emerging  from the  bankruptcy
          proceedings  discussed in Note 10. The notes due from the two officers
          were  liquidated in the  settlement of employment  contracts,  and the
          amount  subscribed to by the related party was received in the form of
          services performed during 1999.



                                       22
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 10 - REORGANIZATION ITEMS

          On September 24, 1997,  Data 1, Inc. (the  "Debtor")  filed a petition
          for relief  under  Chapter 11 of the  federal  bankruptcy  laws in the
          United  States  Bankruptcy  Court for the Middle  District of Florida,
          Tampa  Division,  Case No.:  97-15827-8P1.  Under Chapter 11,  certain
          claims  against  the  Debtor in  existence  prior to the filing of the
          petitions  for relief  under the  federal  bankruptcy  laws are stayed
          while    the    Debtor     continues     business     operations    as
          debtor-in-possession.  These  claims are  reported in the December 31,
          1997 balance  sheet as  "liabilities  subject to  compromise."  Claims
          secured  against  the  Debtor's  assets  ("secured  claims")  also are
          stayed, although the holders of such claims have the right to move the
          Court for relief from the stay. There are no secured claims.

          On  June  19,  1998,  the  bankruptcy  court  entered  a  final  order
          confirming  the plan of  reorganization.  The order  provided that the
          creditors  could settle  their  prepetition  claims  pursuant to three
          options.  Option 1 provided  for a note  payable of 10% of the allowed
          claim payable in 17 quarterly payments beginning May 1, 1999. Option 2
          provided  for a  combination  of a note  payable for 5% of the allowed
          claim and shares of common stock for 5% of the allowed claim. Option 3
          provided for shares of common stock for 10% of the allowed claim.

          Pursuant to the  confirmed  plan,  the Company  issued  notes  payable
          totaling  $235,879  with a net present  value of $194,395,  and issued
          11,952,380 shares valued at $597,618 pursuant to the options available
          to the creditors.

          The Company  recognized a gain on  restructuring of debt of $5,956,183
          in 1998.

NOTE 11 - DEVELOPMENT STAGE COMPANY

          The  Company  essentially  has  reverted  to the  status  of a startup
          company as it emerged  from the  bankruptcy  proceedings  discussed in
          Note 10 and will be considered to be a development stage company as it
          commences  its planned  principal  operations  of  retailing  cellular
          telephone batteries and accessories and real estate development.

NOTE 12 - STOCK ISSUANCES

          During  March  1999,  the  Company  issued  2,208,400  shares  of  its
          previously authorized,  but unissued, common stock for services valued
          at $68,460, or $0.031 per share.

          During  April  1999,  the  Company  issued  4,390,000  shares  of  its
          previously authorized but unissued common stock for services valued at
          $131,700, or $0.03 per share.



                                       23
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                        Notes to the Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 12 - STOCK ISSUANCES (continued)

          During May 1999,  the Company  issued 242,000 shares of its previously
          authorized, but unissued, common stock for services valued at $10,648,
          or $0.044 per share.

          During  June  1999,  the  Company  issued   2,871,478  shares  of  its
          previously authorized,  but unissued, common stock for services valued
          at $100,502, or $0.035 per share.

          During June 1999,  the Company issued 840,000 shares of its previously
          authorized,  but unissued, common stock for services valued at $29,400
          or $0.035 per share.

          During  June  1999,  the  Company  issued   1,880,000  shares  of  its
          previously authorized,  but unissued, common stock for services valued
          at $62,040, or $0.033 per share.

          During  July  1999,  the  Company  issued  30,439,600  shares  of  its
          previously authorized,  but unissued, common stock for services valued
          at $691,949, cash of $543,393, property of $5,000 and debt of $99,000,
          or $0.044 per share.

          During  December  1999,  the Company  issued  9,000,000  shares of its
          previously authorized,  but unissued, common stock for services valued
          at $360,000, or $0.04 per share.

          During  April  2000,  the  Company  issued  1,161,560  shares  of  its
          previously  authorized,  but  unissued,  common stock for services and
          expenses valued at $58,058, or $0.05 per share.

          Stock  issuances  for services and debt during 1999 were valued at the
          trading price on the dates of issue.

NOTE 13 - LEGAL PROCEEDINGS

          The United  States  Securities  and  Exchange  Commission  ("SEC") has
          entered a formal  order of  investigation  styled as "In the matter of
          Diversified  Resources Group,  Inc.  (NY/6573)." On or about September
          30, 1999, the Company  received a subpoena duces teum  requesting that
          the Company  provide  the  Northeast  Regional  Office of the SEC with
          various  documents  regarding  past,  present  and  intended  business
          operations,  financial  statements and underlying  financial  records,
          prior news releases, and other documentation. The Company has provided
          the  documentation  requested and has and intends to continue to fully
          cooperate with this formal order of investigation.



                                       24
<PAGE>



               DIVERSIFIED RESOURCES GROUP, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                        Notes to the Financial Statements
                       June 30, 2000 and December 31, 1999

NOTE 14 - SUBSEQUENT EVENTS

During July 2000, the Company signed a note payable with Sagedale Farms,  LLC in
the amount of $1,500,000.  The note accrues  interest at the rate  designated by
Wachovia  Bank and  interest  is to be paid in  monthly  installments  beginning
August 7, 2000, and continuing  until July 7, 2001, when the remaining  interest
and principal are due in full.


              The remainder of this page intentionally left blank.


                                       25
<PAGE>


Item 2.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATION

OVERVIEW

The following  discussion and analysis  should be read in  conjunction  with the
balance sheet as of June 30, 2000 and the financial statements as of and for the
three  and six  months  ended  June 30,  2000 and 1999  included  with this Form
10-QSB.

We are  considered  to be in the  development  stage  as  defined  in  Financial
Accounting  Standards Board Statement No. 7, and we are currently in the process
of  creating  strategic  relationships  and  acquiring  complementary  operating
companies within the electronic  components industry that have proven management
and state-of-the-art technologies.. The results of operations for the six months
ended June 30, 2000 are not necessarily indicative of the results for any future
interim period or for the year ending  December 31, 2000. We hope to expand upon
obtaining  capital and financing for our  operations.  We anticipate  that these
expenses  will  continue to increase as our  business is expanded in the future,
and further  anticipates  that these  expenses  will  continue to be incurred in
advance of projected revenue.

Readers   are   referred   to  the   cautionary   statement,   which   addresses
forward-looking statements made by the Company.

RESULTS OF OPERATIONS

The results of  operations  for the three  months and six months  ended June 30,
2000 are not necessarily indicative of the results for any future interim period
or for the year ending December 31, 2000. In particular,  we have closed Data 1,
Inc.,  our  computer  memory  operation  in the  summer  of 1999.  We  expect to
reinvigorate  the  Company  by  obtaining  capital,   selling  off  real  estate
operations  to raise  additional  cash,  to be used for  financing  for  current
operations  and our  acquisitions  currently  under review.  We anticipate  that
operating  expenses will continue to increase as our business is expanded in the
future,  and further anticipate that these expenses will continue to be incurred
in advance of projected revenue.

Quarter Ended June 30, 2000 and 1999

We incurred a net loss of  approximately  $(347,819)  for the quarter ended June
30, 2000 as compared  with a net loss of $(430,  261) for the quarter ended June
30, 1999.

Our sales  and cost of sales for the three  months  ended  June 30,  2000,  were
$20,734 and $ 3,308  compared to $-0- and $-0- in the  corresponding  quarter of
the prior  year when  there  were no  battery  operations.  Although  there were
improvements  compared to previous quarter  resulting from a change in suppliers
that increased profitability, this improvement was not sufficient to bring us to
profitability without a significant increase in sales. We incurred $3,020 of

                                       26
<PAGE>

advertising  costs for  Cordless  Power  during the three  months ended June 30,
2000.  No amounts were expended in the prior year since our  operations  did not
commence  until the second half of 1999.  During the three months ended June 30,
2000,  we had  58,855  page views  ("hits")  and 23,085  daily  unique  visitors
("visits") to our web site. This was a 50% reduction in the number of visits and
a 58% reduction in the number of hits from the previous  quarter.  We attributed
this  reduction  in the  effectiveness  of  our  advertising  due to  increasing
competition,  including  competition from our current and former suppliers,  and
the  improved  focus of the  advertising  dollar is  evidenced  try an  improved
closing  rate.  We sold 697  batteries in the second  quarter of 2000; a closing
rate of 3% of visits, and total revenue was stable. We sold 717 batteries in the
first quarter of 2000, which represented a closing rate of 2%.

Our operating expenses consist primarily of general and administrative  expenses
and depreciation and amortization. General and administrative expenses increased
to $77,496 for the quarter  ended June 30, 2000  compared to $-0- in the quarter
ended June 30,  1999,  when  expenses  were charged to the  discontinued  memory
operations segment.  General and administrative  expenses principally consist of
payroll  and  related  taxes;   professional   fees  for  consulting,   business
development,  legal and accounting;  office supplies expense; travel expense and
organizational  costs.  Most of these expense are attributable to overhead costs
associated  with our  headquarters  and  operations  center,  and the additional
expenses related to real estate  consultant  services,  and expenses incurred in
the due diligence process of evaluating Virotest,  Inc., a potential acquisition
which we have decided not to pursue.  Salaries and commissions,  which consisted
entirely of consulting  payments to United Funding Solutions,  Inc.for the three
months ended June 30, 2000, were $25,000.

Depreciation and amortization expense was $800 for the three month period ending
June 30,  2000,  compared  with $7,237  three month  period ended June 30, 1999.
Prior year amounts were included in income (loss) from discontinued operations.

Interest  expense was $24,695  during the three months and three  months  period
ended June 30, 2000  compared to $-0- in the  corresponding  period of the prior
fiscal  year,which were from discontinued  operations.  Interest expense related
primarily to debt undertook to settle with creditors arising from our bankruptcy
and  debt  incurred  to  fund  rest  estate  operations.  We did not  incur  any
significant interest income or expense and did not capitalize any interest.

Six Months Ended June 30, 2000 and 1999

We incurred a net loss of  approximately  $659,916 for the six months ended June
30, 2000 as compared  with a net loss of $417,786  for the six months ended June
30, 1999.

Our sales and cost of sales for the six months and three  months  ended June 30,
2000,  were $42,637 and $13,217  compared to $-0- and $-0- in the  corresponding
period of the prior year when battery operations had not commenced yet. Although
there were  improvements  resulting  from a change in suppliers  that  increased
profitability,  this improvement was not sufficient to bring us to profitability
without a  significant  increase in sales.

                                       27
<PAGE>

Our operating expenses consist primarily of general and administrative  expenses
and depreciation and amortization. General and administrative expenses increased
to $150,271  for the six months ended June 30, 2000 from $-0- for the six months
ended June 30,  1999 (when all  expenses  were  charged to  discontinued  memory
operations),  and principally  includes payroll and related taxes;  professional
fees for consulting, business development, legal and accounting; office supplies
expense;  travel  expense and  organizational  costs.  Most of these expense are
attributable to overhead costs  associated with our  headquarters and operations
center, and the additional expenses related to real estate consultant  services,
and expenses  incurred in the due diligence process of evaluating  Virotest,  an
acquisition which we have decided not to pursue. Salaries and commissions, which
consisted  entirely of consulting  payments to United  Funding (a related party)
for the six months ended June 30, 2000, were $50,000.

Other Expenses

The allowance for loss on real estate increased to $951,312 as of June 30, which
represents  the entire amount  invested.  This increase was due to the increased
expenditures  into the Falls  River Land  Development,  which is being  reserved
since there is no assurance as to the recoverability of Our investment.  We have
made all required payments under the contract and related extension agreements.

Depreciation and Amortization

Depreciation and amortization  expense includes charges relating to depreciation
of property and equipment,  which consist principally of shipping equipment such
as  switches  and  points  of  presence,  furniture  and  equipment,   leasehold
improvements,  and  amortization  of  intangible  assets  should they arise.  We
depreciate our equipment  over periods  ranging from five (5) to seven (7) years
and  amortize  our  intangible  assets over  periods  ranging  from three (3) to
twenty-five (25) years.

Depreciation and amortization expense was $6,346 for the six month period ending
June 30,  2000,  compared  with  $14,473 for the six month period ended June 30,
1999.  Prior year  amounts  were  included in income  (loss)  from  discontinued
operations.

Interest

Interest  expense was $81,664 and $4l,766 during the six month period ended June
30, 2000  compared  to $-0- in both  corresponding  periods of the prior  fiscal
year.  Interest  expense  related  primarily  to debt  undertook  to settle with
creditors  arising  from our  bankruptcy  and debt  incurred to fund rest estate
operations.  We did not incur any significant interest income or expense and did
not capitalize any interest.

Inflation and Deflation

We do not believe that either  inflation or  deflation  will have a  significant
effect on operations for the foreseeable future.

Market Risk Exposure

With the cessation of the Cordless Power battery business,  We may be subject to
limited  indirect  foreign  currency  exchange rate risk relating to payments to
suppliers.  However,  we do not  consider the market risk  exposure  relating to
foreign currency exchange to be or to have been material.


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Financial Position, Liquidity and Capital Resources

Our operating  requirements  have  exceeded our cash flow from  operations as we
struggle to build a successful  operating business.  Operating activities during
the six months ended June 30, 2000 used cash of $161,567.  Operating  activities
were  primarily  funded  through  related  party  advances.  In  addition to our
operating  requirements  we have  invested  close to $500,000 in the Falls River
Land Development  during 2000. These amounts were funded by Tampa Bay Financial,
Inc., a related party.

Due to the need for working  capital,  we will continue to seek  additional debt
and/or equity financing from existing  shareholders and other investment capital
resources,  however,  no  assurance  can be given that we will be able to obtain
other commitments. We will require the proceeds of this and subsequent offerings
to expand our operations and finance our future  working  capital  requirements.
Based upon our current plans and  assumptions  relating to our business plan, we
anticipate  that we may need to seek  additional  financing to fund our proposed
acquisition  strategy.  After  the end of the  quarter,  we were  able to borrow
$1,250,000 from Sagedale Farms,  LLC, a North Carolina company to defray some of
our  costs in the  Falls River Land Development. We hope to sell the Falls River
project after the end of the quarter,  after which we believe we will be able to
pay off existing debts and have a capital base to begin pursuing acquisitions in
early 2001.

CAUTIONARY STATEMENT

This Form 10-QSB, press releases and certain information  provided  periodically
in writing or orally by the Company's  officers or its agents contain statements
which constitute forward-looking statements within the meaning of Section 27A of
the Securities Act, as amended and Section 21E of the Securities Exchange Act of
1934. The words expect,  anticipate,  believe, goal, plan, intend,  estimate and
similar  expressions and variations thereof if used are intended to specifically
identify  forward-looking  statements.  Those  statements  appear in a number of
places in this  Form  10-QSB  and in other  places,  particularly,  Management's
Discussion and Analysis of Financial  Condition and Results of  Operations,  and
include statements  regarding the intent,  belief or current expectations of the
Company,  its directors or its officers with respect to, among other things: (i)
the Company's  liquidity  and capital  resources;  (ii) the Company's  financing
opportunities and plans and (iii) the Company's future performance and operating
results.  Investors  and  prospective  investors  are  cautioned  that  any such
forward-looking  statements are not guarantees of future performance and involve
risks and  uncertainties,  and that actual  results may differ  materially  from
those  projected  in the  forward-looking  statements  as a  result  of  various
factors.  The factors that might cause such differences  include,  among others,
the  following:  (i) any  material  inability  of the  Company  to  successfully
identify,  consummate  and  integrate  the  acquisition  of  radio  stations  at
reasonable and anticipated costs to the Company;  (ii) any material inability of
the Company to successfully  internally develop its products;  (iii) any adverse
effect or  limitations  caused by  Governmental  regulations;  (iv) any  adverse
effect on the  Company's  continued  positive  cash flow and abilities to obtain
acceptable  financing in  connection  with its growth  plans;  (v) any increased
competition  in  business;  (vi) any  inability  of the Company to  successfully
conduct its  business in new  markets;  and (vii)  other risks  including  those
identified in the Company's filings with the Securities and Exchange Commission.
The Company  undertakes no  obligation to publicly  update or revise the forward
looking  statements made in this Form 10-QSB to reflect events or  circumstances
after the date of this Form 10-QSB or to reflect the occurrence of unanticipated
events.



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                          PART II. - OTHER INFORMATION

Item 1. Legal Proceedings

      NONE

Item 2. Changes in Securities

      NONE

Item 3. Defaults Upon Senior Securities

      NONE

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

      NONE

Item 5. Other Information

      NONE

Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits:

            10.09       Promissory Note between the Company and Sagedale Farms,
                        LLC.

      (b)   None


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                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

     February 20, 2001                      /s/ Carl Smith
--------------------------------               ------------------------------
             Date                            Carl Smith, Chief Executive Officer




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