SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
        (Mark One)
         [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended March 31, 2000

                                       OR

         [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-27343

                              INFOCAST CORPORATION

             (Exact name of registrant as specified in its charter)

               Nevada                                       84-1460887
  (State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization)                       Identification No.)

                            One Richmond Street West
                                    Suite 902
                            Toronto, Ontario M5H 3W4
              (Address and zip code of principal executive offices)

                                  416-867-1681
              (Registrant's telephone number, including area code)

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

                                 TITLE OF CLASS
                          COMMON STOCK, $.001 PAR VALUE

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed 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 by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]

         As of May 31, 2000,  the  aggregate  market  value of the  Registrant's
Common Stock held by  non-affiliates  of the Registrant was  $66,359,913,  which
value,  solely for the purposes of this calculation  excludes shares held by the
Registrant's officers,  directors,  and their affiliates.  Such exclusion should
not be deemed a  determination  or an admission by the Registrant  that all such
individuals are, in fact, affiliates of the Registrant.  The number of shares of
the  Registrant's  Common  Stock issued and  outstanding  as of May 31, 2000 was
21,409,413.

                       DOCUMENTS INCORPORATED BY REFERENCE

         None.



<PAGE>

                              INFOCAST CORPORATION

                                TABLE OF CONTENTS

                                      PART I                            Page No.

Item 1.       Business......................................................3

Item 2.       Properties...................................................16

Item 3.       Legal Proceedings............................................16

Item 4.       Submission of Matters to a Vote of Security Holders..........16

                                     PART II

Item 5.       Market for Registrant's Common Stock and Related
              Security Holder Matters......................................17

Item 6.       Selected Financial Data......................................20

Item 7.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations..........................21

Item 7A.      Quantitative and Qualitative Disclosures About Market Risk...27

Item 8.       Financial Statements and Supplementary Data..................27

Item 9.       Changes In and Disagreements With Accountants
              on Accounting and Financial Disclosure.......................27

                                    PART III

Item 10.      Directors and Executive Officers of the Registrant...........28

Item 11.      Executive Compensation.......................................30

Item 12.      Security Ownership of Certain Beneficial
              Owners and Management........................................35

Item 13.      Certain Relationships and Related Transactions...............37

                                     PART IV

Item 14.      Exhibits, Financial Statement Schedules,
              and Reports on Form 8-K......................................39

Signatures.................................................................40


                                       -2-

<PAGE>

                                     PART I

Item 1. Business

General

         We are an emerging  company that has  developed the  infrastructure  to
enable us to host both our own customized and third-party software  applications
that  can  be  accessed  remotely  by  businesses  and  their  employees.   This
infrastructure  consists of:  computer  hardware  purchased  from third parties;
software  applications;  and  communication  connections over private and public
networks,  including  the  Internet.  We are now entering the  commercialization
phase and plan to provide our customers  with access to our  infrastructure  and
hosted  applications on a per use basis.  Companies providing such services have
recently come to be known as application service providers or "ASPs."

         Traditionally,  businesses  have had to  purchase  their own  computing
systems,  including  hardware and  software,  as well as hire,  train and retain
highly skilled  employees to operate and maintain  these  systems,  all of which
require significant capital and ongoing operating  expenditures.  By outsourcing
these functions to an application  service provider,  an enterprise will be able
to:

         o     Reduce  upfront  and  ongoing  capital  expenditures;
         o     Reduce its investment in information technology personnel;
         o     Access  up-to-date,   highly  scalable,   reliable  and  flexible
               technology;
         o     Focus  its  resources  on its  core  business  by  outsourcing  a
               non-core function; and
         o     Potentially shorten implementation time for new computer systems.

         In order to host our customized and third-party software  applications,
we have established two strategically placed data centers,  which we refer to as
information hubs or i-Hubs, located in Calgary and Toronto, Canada. We also have
an agreement with AT&T Canada Long Distance  Services  Company  ("AT&T  Canada")
that  allows us access to AT&T  Canada's  telecommunications  network to connect
these   information   hubs  to  customers.   Our  two  information  hubs  became
commercially  operational  in  December  1999  and we  expect  to  expand  these
information hubs and/or install additional information hubs across North America
as needed.   We expect each  installation to be implemented on Sun  Microsystems
Inc. servers using Sun Solaris, Netscape and Java-related technologies, which we
believe will provide a high level of reliability,  scalability and  performance.
These information hubs will deliver information to information users,  including
businesses and their  employees and customers  worldwide,  in real-time,  in any
format - data, voice or animation, through satellite, cable or private or public
telecommunications networks, including the Internet.

         We host  third-party  software  applications,  as well as the following
software applications that we have developed:

         o Virtual  Call Center - This  application  will permit  businesses  to
service  inbound  and  outbound  customer  calls at any time  through a customer
service representative who can be located anywhere.

         o Distance  Learning  - This  application  will  permit  corporate  and
academic learners to access training on-line, from anywhere, at any time.

         These  applications  became  commercially  available  by the end of the
fiscal year ending March 31, 2000.

         We  are a  development  stage  company.  Since  the  inception  of  our
predecessor,  Virtual Performance Systems Inc., in July 1997 and as at March 31,
2000, we have had limited  sales of products and services on a commercial  basis
and have had limited revenues. We incurred losses of $96,161 for the period from
July 29, 1997  (inception)  to December  31,  1997,  $423,872 for the year ended
December  31, 1998,  $3,083,921  for the three month period ended March 31, 1999
and  $31,151,184  for year ended March 31,  2000,  resulting  in an  accumulated
deficit of $34,755,138 at March 31, 2000. Losses are continuing through the date
of this Report and we anticipate that losses will continue


                                       -3-

<PAGE>

for the foreseeable future. In addition, the market for our expected services is
highly competitive and subject to rapid technological  change. We expect to face
significant  competition  in the  future.  As an  emerging  company in a new and
rapidly evolving market, we face risks and uncertainties relating to our ability
to successfully implement our business plan. We may not successfully address all
of these issues.

History of the Company

         We were  incorporated  on December  23, 1997.  Prior to 1999,  our sole
business was mining and we held certain mineral  interests in the United States.
Due to changes in the  United  States  regulatory  environment,  our  management
determined that it would be appropriate for us to sell all of our mining assets,
which represented  substantially all of our assets. We completed the sale of our
mining  assets in the fourth  quarter of 1998.  During 1998, we changed our name
from Grant Reserve  Corporation to InfoCast  Corporation.  Prior to changing our
name and subsequent to the sale of our mining assets,  we were a publicly-traded
company whose common stock was quoted on the OTC Bulletin Board under the symbol
"GNRS" without any ongoing business  operations.  During the year ended December
31,  1998,  we issued  5,000,000  pre-split  shares of Common  Stock to Sheridan
Reserve  Incorporated  for the acquisition of two mining  interests and in April
1998 issued 1,000,000  pre-split units at a price of $0.50 per unit in a private
placement  financing  pursuant to Rule 504 of Regulation D of the Securities Act
of 1933, as amended.  Each unit consisted of one pre-split share of Common Stock
and one pre-split  Common Stock purchase warrant with an exercise price of $0.50
per share exercisable  before December 31, 1998. The $500,000 issue price of the
units was  satisfied  through the receipt of cash  proceeds of $260,000  and the
settlement  of a  non-interest  bearing note of $240,000 that was due from us to
Sheridan Reserve Incorporated.

         On October 13, 1998,  our  shareholders  voted to effect a  two-for-one
stock split that increased the number of outstanding shares of Common Stock from
6,000,000 to 12,000,000  and increased  the number of  outstanding  Common Stock
purchase warrants from 1,000,000 to 2,000,000.  Accordingly,  the exercise price
of  the  Common  Stock  purchase  warrants  was  reduced  to  $0.25  per  share.
Subsequently,  1,580,000 of the Common Stock purchase warrants were exercised at
$0.25 each for cash  proceeds of $395,000.  The remaining  420,000  Common Stock
purchase warrants expired.

         On January 29,  1999,  we  consummated  the  acquisition  of all of the
voting  capital  stock  of  Virtual  Performance   Systems,   Inc.,  a  Canadian
corporation,   for  1,500,000  shares  of  InfoCast  Canada   Corporation,   our
wholly-owned  subsidiary  ("InfoCast  Canada"),  which  are  exchangeable  on  a
one-for-one basis for shares of our Common Stock.  Virtual Performance  Systems,
Inc. was a  development  stage company that was  developing  solutions to permit
businesses to service inbound and outbound  customer calls at any time through a
customer  service  representative  who can be  located  anywhere  and to  permit
corporate and academic  learners to access training on-line,  from anywhere,  at
any  time.  The  consolidated  financial  statements  of  the  Company  are  the
continuing financial statements of Virtual Performance Systems, Inc.

         In March 1999, we consummated a private placement financing pursuant to
which we issued 2,767,334 shares of Common Stock for an aggregate offering price
of  $4,151,001  pursuant  to  Regulation  S of the  Securities  Act of 1933,  as
amended.

         In March 1999, we consummated a private placement financing pursuant to
which we issued 265,002  shares of Common Stock for an aggregate  offering price
of $397,503 pursuant to Regulation D of the Securities Act of 1933, as amended.

         Pursuant to an  agreement  dated  December  15,  1998,  as amended by a
letter agreement dated March 12, 1999, between us and ITC Learning  Corporation,
we  purchased  from ITC Learning  Corporation  the  distribution  rights for all
current and future ITC Learning  Corporation  education and training products in
consideration  for $975,000 in respect of the first  150,000  user  licenses and
based on a shared  revenue  formula for user  licenses in excess of 150,000.  We
paid the first $500,000 of the initial $975,000 purchase price in March 1999 and
the final $475,000 of the initial $975,000 purchase price in April 1999.



                                       -4-

<PAGE>


         Pursuant to an agreement  dated March 22, 1999, we issued 60,000 shares
of Common  Stock to Thomson  Kernaghan & Co.  Limited,  a  financial  investment
consulting  firm,  for  assistance  in securing  additional  financing  over the
following year.

         On May 13, 1999,  we acquired all of the  outstanding  common shares of
HomeBase Work Solutions Ltd. HomeBase Work Solutions,  headquartered in Calgary,
Alberta,  Canada, was developing a solution to permit businesses to enable their
employees to work from remote  locations via  computers.  The purchase price was
satisfied  by  the  issuance  of  3,400,000  shares  of  InfoCast  Canada,   our
subsidiary.  The InfoCast Canada shares are exchangeable on a one-for-one  basis
for shares of our Common Stock.

         In June and  October  1999 and  January  2000,  we issued  warrants  to
purchase  25,000,  12,500 and 12,500 shares of Common Stock at an exercise price
of $7.00,  $8.75 and $7.62 per  share,  respectively,  to the Poretz  Group,  an
investor  relations  consulting  firm, in  consideration  for on-going  investor
relations consulting services,  including reviewing our public releases, setting
up  meetings  between us and members of the  investment  banking  community  and
developing our public image.

         In June  1999,  in return  for  consulting  services  in respect of the
development  of our  virtual  call  center  application  and  for  the  InfoCast
corporate  name, we issued warrants to purchase an aggregate of 50,000 shares of
Common Stock at an exercise price of $7.00 per share to each of Tsun Chow, Armin
Roeseler, Paul Prabhaker and John J. Malley.

         In  June  1999,  we  entered  into  an  agreement   with  ITC  Learning
Corporation  pursuant  to  which  we  will  become  ITC  Learning  Corporation's
exclusive  distance  learning   technology   distributor  for  the  delivery  of
educational   material  for  the  State  of  California  for   consideration  of
$2,000,000.  We paid this amount in three installments in August,  September and
October 1999.

         On June 24, 1999, we consummated a private placement financing pursuant
to which we issued  420,000  shares of Common  Stock and  warrants  to  purchase
70,000  shares of Common  Stock at an  exercise  price of $7.00 per share for an
aggregate  offering  price  of  $2,100,000  pursuant  to  Regulation  D  of  the
Securities Act of 1933, as amended.

         From July to November 30, 1999,  we issued  1,879,000  shares of Common
Stock in a  private  placement  financing  for an  aggregate  offering  price of
$10,334,550 pursuant to Regulation S of the Securities Act of 1933, as amended.

         In October 1999, we issued options to purchase  60,000 shares of Common
Stock at an  exercise  price of $8.25 per share to Howard  Nichol,  an  investor
relations   consultant,   for  services   which   included   assisting  us  with
communications with and presentations to stock brokers, analysts and private and
institutional investors, providing access to the financial media and introducing
us to potential  acquisition or alliance  opportunities.  This  arrangement  was
terminated  in May 2000,  resulting in the  cancellation  of options to purchase
30,000 shares of Common Stock previously granted.

         In October 1999, we entered into a non-exclusive investment banking and
financial advisory services agreement with N.M. Rothschild & Sons Canada Limited
and N.M. Rothschild & Sons (Washington)  L.L.C.  (together  "Rothschild").  This
agreement was  terminated in March 2000. In the event a Transaction  (as defined
below) was implemented during the term of Rothschild's  engagement,  or within a
period of one year after the  termination of Rothschild's  engagement  under the
agreement on which  Rothschild  worked or with a party  identified by Rothschild
during  the term of the  agreement,  we will pay a fee of 3% of the value of the
Transaction (the "Performance Fee") to Rothschild in recognition of Rothschild's
contribution   to  such   Transaction.   For  the  purposes  of  the  agreement,
"Transaction" means any acquisition,  merger,  alliance or business  combination
which involves us and which shall be valued for purposes of the  Performance Fee
to include  any debt  incurred  or assumed  by the  purchaser  or parties in the
combination  and any shares issued or to be issued as part of the  consideration
for any possible transaction.


                                       -5-

<PAGE>

         In  January  2000,  we issued  200,000  shares  of Common  Stock to the
shareholders of Applied  Courseware  Technology Inc.  pursuant to the Minutes of
Settlement Agreement signed on January 7, 2000.

         In February 2000, we issued 500,000 shares of Common Stock in a private
placement for which we received  150,000  shares of  restricted  Common Stock of
another  publicly  traded  company  as  consideration,  of which we will  retain
130,000 shares after commissions.

         On February 17, 2000, we entered into a letter of agreement  with i360,
Inc.  ("i360") and certain of the  shareholders of i360,  whereby i360 agreed to
merge  with and into us.  On May 3,  2000,  the  Company  and i360  executed  an
Agreement and Plan of Merger with i360  providing for the  acquisition  by us of
all of the  outstanding  shares of common  stock of i360.  The Merger  Agreement
provides for the  statutory  merger of i360 into the Company,  pursuant to which
the holders of i360's  issued and  outstanding  common stock will be entitled to
receive  0.3  shares of our  Common  Stock per  share of i360  common  stock (an
aggregate of 7,584,000 shares of our Common Stock).  All outstanding  options to
purchase  shares of i360  common  stock will  convert  into  options to purchase
shares of our Common Stock at a 1:0.3  exchange ratio (an aggregate of 4,416,000
InfoCast Share Purchase Options and 1,030,803  InfoCast Employee  Options).  The
transaction,  which has been approved by the boards of directors of InfoCast and
i360,  is  subject  to  certain  conditions,   including  the  approval  of  the
transaction by the stockholders of i360 and the Company,  successful  completion
of any regulatory approvals and certain other conditions.

         In March and April 2000, we raised  $6,000,000,  before commissions and
expenses, by way of convertible  subordinated  debentures.  These 7% convertible
subordinated  debentures pay interest semi annually, are convertible into shares
of our Common Stock and have common stock purchase warrants attached to them.

         In April 2000, we issued warrants to purchase  200,000 shares of Common
Stock at an  exercise  price of $6.50  per share to Small  Caps  Online  LLC,  a
registered broker-dealer focused on identifying emerging growth companies in the
healthcare and information technology sectors.

Background

         The ability to deliver information to anyone, anywhere and at any time,
remains the cornerstone objective of today's communications systems. This is the
case whether that  information is  transmitted  over a private or public network
(including the Internet), via computers, telephone and/or satellite.

         We believe that rapid growth of the Internet,  electronic  commerce and
corporate  intranets  is  an  indication  that  companies  and  individuals  are
continuing to increase their use of corporate and home-based systems to send and
receive ever more complex information.

         The  technological  dilemma facing suppliers of information,  and those
wanting to receive  it, is the  inability  of the  various  networks,  operating
systems,   communication  protocols  and  communications  systems  to  interface
seamlessly.  This situation is analogous to people from different countries with
different  languages  all  trying to  communicate  at once  without  benefit  of
translation.

         A business  opportunity  exists in the near term for the  deployment of
technology that links different network  infrastructures so that information can
be either: (i) accessed remotely in near real-time across dedicated networks; or
(ii) reduced with regard to the fidelity and  resolution of its content and then
accessed through the Internet.

         As an emerging application service provider, our focus is on developing
the infrastructure to enable customers to access the best software  applications
via a standard web browser and Internet  access without  regard to  geographical
point of origin,  underlying  network  architecture or personal computer make or
model.


                                       -6-

<PAGE>

Our Information Hubs

         In order to host our customized and third-party software  applications,
we are developing a network of strategically placed data centers, which we refer
to as information hubs or i-Hubs.  We expect each installation to be implemented
on Sun  Microsystems  servers  using  Sun  Solaris,  Netscape  and  Java-related
technologies,  which we  believe  will  provide  a high  level  of  reliability,
scalability and performance.  To date, we have completed the installation of two
information hubs based on the following server platforms:

         Calgary, Canada:
         o  One Sun Microsystems Enterprise 10,000 server
         o  Ten Sun Microsystems Netra T-1 servers
         o  Four Sun Microsystems Enterprise 250 servers
         o  Two Sun Microsystems 450 servers

         Toronto, Canada:
         o  Four Compaq 450 servers
         o  Five Sun Microsystems Netra T-1 servers
         o  2 PII 450 web  servers
         o  1 PII 450  firewall
         o  1 Cisco  7200  router
         o  1 Cisco 1600 router
         o  2 Cisco switches
         o  1 PII 450 database server

         Both  information  hubs were  commercially  operational  as of December
1999, and we expect to expand these  information hubs and/or install  additional
information hubs across North America as needed.

         In addition to the hosting servers, we anticipate that each operational
information hub will provide customers with the following:

         o  physical security;
         o  uninterruptable  power  supply with  optional  generator  backup;
         o  disaster recovery plan;
         o  guaranteed  quality of service levels;
         o  help desk  support;
         o  highly  reliable  Internet access; and
         o  network monitoring and supervision.

         To execute our information hub strategy, we either have established, or
are currently negotiating to establish the following strategic relationships:

         Sun  Microsystems,  Inc.  We have  negotiated  an  agreement  with  Sun
Microsystems  pursuant to which we have been designated under Sun  Microsystems'
ServiceProvider.com(TM)  program.  Under  this  agreement,  we have  no  minimum
financial  commitments,   but  are  entitled  to  purchase  equipment  from  Sun
Microsystems  at a  minimum  prescribed  discount  from Sun  Microsystems'  list
prices.  The  program  does  not  include  any  exclusivity  arrangements.  As a
participant  in this  program,  we now have access to  preferential  pricing and
service treatment from Sun Microsystems, as well as:


                                       -7-

<PAGE>

         o   a recognized  network and Internet computer alliance with worldwide
             service and support;
         o   a stable  operating  system  environment,  further  enabled  by the
             networking   capability  of  Sun  Microsystems'   Java  programming
             language and environment;
         o   a clear  and  distinctive  processing  performance  that  meets the
             challenges of network computing;
         o   solid  communication  tools and programs to support  global network
             connectivity;
         o   Internet  firewall  technology  that  provides  support  users with
             seamless access; and
         o   professionals worldwide who can support complex network designs and
             problems.

         AT&T Canada We have entered into a non-binding  letter of understanding
with AT&T Canada that  provides  that the parties will endeavor to negotiate and
execute the following agreements: (i) a development and supply agreement whereby
we would supply software  learning  products for co-marketing  with AT&T Canada;
(ii) a  telecommunications  agreement  whereby  AT&T  Canada  would  provide the
telecommunications  services  necessary  to  facilitate  the  delivery  of  such
products to customers and (iii) a cooperative  marketing  agreement  whereby the
parties would work jointly to market and promote  future  products and services.
In addition,  we are currently  negotiating an arrangement that would define how
both AT&T Canada and  InfoCast  Corporation  will offer the virtual  call center
application being developed by us to AT&T Canada's  customers.  To date, we have
entered into the  telecommunications  agreement with AT&T Canada,  which defines
pricing  levels.  We do not  have any  financial  commitments  pursuant  to such
agreement.  We intend to negotiate the remaining  agreements over the balance of
fiscal 2001. We cannot assure you that we will reach any such other  agreements.
Such agreements with AT&T Canada would provide us with:

         o   a  relationship   with  a  recognized   global   telecommunications
             provider;
         o   connectivity  between  our  information  hubs  and the  information
             users;
         o   a marketing  channel to access potential  customers;  and
         o   access to North American and international call center markets.

Our Customized Software Applications

Virtual Call Center Application

         The  traditional  method  of  providing  customer  support  has been to
establish a call center whereby customer service  representatives,  located in a
central "brick and mortar"  facility,  respond to incoming  client  inquiries or
make outgoing calls via telephone  banks.  Typically,  call centers are used for
help desk functions,  telemarketing,  catalog order taking and debt  collection.
Traditional call centers are generally limited by the following:

         o   physical limitations with respect to the number of customer service
             agents  able  to  work  based  on the  telephone  lines  and  desks
             available,  which in turn  limits  the  volume of calls that can be
             handled;
         o   employee  dissatisfaction  and high  turnover;
         o   high  operational costs; and
         o   difficult to staff for cycles in call frequency.

         We believe that  outsourcing  of call centers is gaining  popularity in
North  America and Europe and there is emerging a number of firms  offering call
center outsourcing and management.

         The virtual  call center  application  we have  developed  would enable
customer service  representatives  to be located anywhere,  without having to be
present at a central  "brick and mortar"  facility,  and would allow a caller or
customer to reach a trained  customer service  representative  at any time, from
almost  anywhere.  The customer  service  representative  would also be able, if
necessary,  to have secure access to a merchant's  in-house  database.  Customer
data would be protected by a dedicated  (non-shared)  network that uses password
access and firewalls to provide  security,  yet would be fully  accessible via a
computer network or through a toll-free dial up service.



                                       -8-

<PAGE>

         Our concept of a virtual  call center is  predicated  on the ability to
provide  the   communication   software   that  allows  the   customer   service
representative,  the buyer and the vendor to be linked together in real-time via
computers.  The application  that we have developed will enable a high volume of
inbound  customer calls to be routed  (without the caller knowing where the call
is going) to a customer service  representative  who could be located  anywhere,
and who would answer and service the call. The customer  service  representative
would be able to accept  calls,  immediately  access  the  merchant's  database,
locate  the  appropriate   product/service  and  process  the  caller's  request
immediately.  The  virtual  call center  application  is expected to provide the
necessary  communications  linkage  and  speed to allow  all  three  parties  to
interact in real-time.

         We expect that our virtual  call center  application  will  provide the
technology   that:   (i)  converts  a  call  from  analog   (voice)  to  digital
(information) so it can be transported over a data line; (ii) routes a call from
the caller to the appropriate customer service representative based on the needs
of the caller and skills and availability of the customer service representative
(for example, a caller may indicate his or her preference for a customer service
representative  that speaks a certain language and if such a  representative  is
available, the call will be routed to such a representative); (iii) provides the
customer service representative with access to the business' database, including
both product and caller  specific  information;  and (iv) converts the call back
into  analog  so  the  caller  can   communicate   with  the  customer   service
representative,   all  of  which  would  take  place  in  a  secure,  supervised
environment.  We use Voice  Over-IP  technology  to convert calls from analog to
digital  and back  again.  While we do not intend to develop  the Voice  Over-IP
software itself, we believe we have successfully selected appropriate vendors to
implement such  technology.  The  application  that we have developed would also
support  automated call  distribution  (routing) and interactive  voice response
(choosing  options  by  pressing  touch  tone  numbers  on a phone),  as well as
forward-looking  call center  technologies such as unified messaging  (combining
voice mail, e-mail and facsimile) and web-based help desks.

         The essential  elements of the virtual call center  application that we
have developed include:

         o   skills-based  routing,   which  routes  calls  to  the  appropriate
             customer service representative based on predetermined  parameters,
             such as language;
         o   secure  access to a business'  database,  including  both  customer
             specific and product information;
         o   conversion of the call to and from digital and analog; and
         o   training and supervision of customer service representatives.

         The virtual call center  application that we have developed is expected
to result in the support of multiple  customers with a single  customer  service
representative  from any  geographical  location.  This would result in: (i) the
customer   service   representative   not  being   limited   to  a   traditional
"brick-and-mortar"  call center  building  and (ii) the  application  enabling a
single customer  service  representative  to service multiple vendors and access
corporate data from each vendor,  regardless of any security  measures,  such as
firewalls, which the vendor may have selected as its corporate standard.

         Virtual call centers would allow customer  service  representatives  to
work from home,  resulting  in lower  costs and greater  employee  satisfaction.
Using our  technology,  we expect  that  virtual  call  centers  will be able to
provide all the features of a traditional  call center,  while reducing  capital
and human resource  overhead.  Accordingly,  businesses would be able to service
existing  and new  clients  with better cost  structures,  while both  enhancing
levels of service and reducing costly employee turnover.

         We have  completed the testing and  demonstration  phase of development
with respect to our virtual call center  application  and the application is now
commercially  available.  There  can be no  assurance  that  we  will be able to
complete the  deployment of our virtual call center  application as scheduled or
at all because we may not be able to (i) raise the additional  funds required to
complete such  deployment  and (ii) attract and retain  technologically  skilled
employees. In addition,  there can be no assurance that a substantial market for
our virtual call center application will develop and grow.



                                       -9-

<PAGE>

Distance Learning Application

         Traditionally,  in order for a  business  to  provide  training  to its
employees,  the  business  would bring an on-site  instructor  to the  business'
offices and hold instructor-led  classes.  The drawbacks of holding such classes
include the difficulty and cost of assembling  employees in a physical space and
the loss of productive  work time.  More recently,  instructor-led  training has
been  augmented  through  the use of video  conferencing,  which  has  saved the
expense  of  physically  assembling  trainees,  but  still  has many of the same
drawbacks as live on-site classes.

         During the multimedia training boom of the early 1990's,  CD-ROM became
the de-facto standard for content delivery. Businesses would purchase sufficient
software  licenses to cover the number of employees to be trained.  Each trainee
would  then  install  a CD-ROM  containing  the  course  material  on his or her
computer  and commence the  training on an  individual  basis.  One problem with
CD-ROMs  is  that  they do not  permit  the  customization  required  by  large,
technologically  sophisticated  and globally oriented  companies.  Additionally,
CD-ROM  training  does not provide the sense of  community  and shared  learning
offered  by the  conventional  classroom  environment.  While  CD-ROMs  increase
flexibility in terms of where and when employees can be trained,  CD-ROMs do not
provide any  interaction,  monitoring  or feedback,  or the ability to customize
programs.

         The factors driving people and businesses to seek training include:

         o   business   requirements  for  staff  to  be  certified  in  certain
             technologies in order to assure performance and productivity;
         o   corporate downsizing,  resulting in increased training requirements
             for  ex-staff as well as for  employees  who perform  multiple  job
             tasks that require knowledge of various jobs;
         o   the  proliferation of computers and networks  throughout all levels
             of  organizations,  increasing  the  number of  employees  who need
             training; and
         o   the  continuous  introduction  and  evolution of new  technologies,
             contributing to the need for continuing education.

         The distance  learning  application  that we have developed will enable
learners  to access  digital  content  through  a  standard  browser  interface.
Trainees  will be able to interact  with  subject  matter to enhance and support
their  learning  endeavors.  By having  the tools to  interact  with  career and
instructional  experts,  24 hours a day, seven days a week, through e-mail, chat
rooms and other real-time collaborative tools across the Internet or a dedicated
network, we believe we will be able to offer a higher level of service, compared
to our  potential  competitors.  We believe that  through the distance  learning
application  we have  developed,  a business will be able to train its employees
with the best features of live training courses without the associated drawbacks
and at a much lower cost.

         An important  component of the distance  learning  application  that we
have developed is the learning management system. The learning management system
consists of  proprietary  software  developed by us that will  support  multiple
corporations and learning  organizations that offer course content on-line.  The
software was designed  from the ground up with  role-based  security  (different
users have  access to  different  aspects  of the  network),  multiple  language
support  and  multi-enterprise  billing  and  tracking  facilities.  Acting as a
"security  blanket"  around the  content,  the learning  management  system will
permit other  organizations  to embed their web-based  training  content without
fear of losing  intellectual  property  over the  Internet and still permit that
organization's employees to remotely access their training.

         The distance learning  application that we have developed would provide
access to:

         o   a group of tutors who are expert in their  field and who would give
             guidance to learners in real time;
         o   a team that gives learners guidance with career development;
         o   a library of high  quality  courses in single units or as part of a
             curriculum; and
         o   software  tools to help busy faculty  members  develop or customize
             courses rapidly.


                                      -10-

<PAGE>

         Our distance learning  application is expected to deliver  skills-based
interactive  multimedia content to corporate,  academic and retail learners.  We
expect the distance  learning  application  to  differentiate  itself from other
training  methodologies  by  delivering a complete  learning  solution  over any
network, including the Internet. We expect that the technology we have developed
will provide content vendors with  confidence that their  intellectual  property
will not be compromised and will allow self-paced  learning to maximize personal
and career  success of  learners  over their  lifetime.  We expect the  distance
learning application to support the learner with live on-line telephone coaching
within a  standard  Internet  browser  (i.e.,  Netscape  Navigator  or  Internet
Explorer) and enable the learner to access a browser for  interactive  learning,
producing a more collaborative  learning experience.  In addition, we expect the
application  to  enhance  conventional   classroom-based  and  current  distance
learning delivery methods.

         We have entered into agreements with ITC Learning  Corporation pursuant
to which we purchased from ITC Learning  Corporation the distribution rights for
all current and future ITC Learning Corporation  education and training products
and  will  become  ITC  Learning   Corporation's   exclusive  distance  learning
technology distributor for the delivery of educational material for the State of
California.  Pursuant to an agreement  dated  December 15, 1998, as amended by a
letter agreement dated March 12, 1999, between us and ITC Learning  Corporation,
we  purchased  from ITC Learning  Corporation  the  distribution  rights for all
current and future ITC Learning  Corporation  education and training products in
consideration  for $975,000 in respect of the first  150,000  user  licenses and
based on a shared  revenue  formula for user  licenses in excess of 150,000.  We
paid the first $500,000 of the initial $975,000 purchase price in March 1999 and
the final $475,000 of the initial $975,000 purchase price in April 1999. In June
1999,  we entered into an agreement  with ITC Learning  Corporation  pursuant to
which we will become ITC  Learning  Corporation's  exclusive  distance  learning
technology distributor for the delivery of educational material for the State of
California  for  consideration  of  $2,000,000.  We paid  this  amount  in three
installments in August, September and October 1999.

         We have  recently  completed  the  testing and  demonstration  phase of
development  with  respect  to  our  distance  learning   application  and  such
application  is now  commercially  available.  There can be no assurance that we
will be able to complete the deployment of our distance learning  application as
scheduled or at all because we may not be able to (i) raise the additional funds
required  to  complete  such   deployment,   (ii)  enter  into  agreements  with
appropriate   content  and  network  providers  and  (iii)  attract  and  retain
technologically  skilled  employees.  In addition,  we cannot  assure you that a
substantial market for our distance learning  application will develop and grow.
To date we have  entered  into an  agreement  to provide  products  and services
totaling up to $1.2 million to be delivered during the next 12 months.


Hosting Third-party Software Applications

         In  addition  to  its  customized  applications,  we  host  third-party
applications  and support  e-commerce  initiatives.  Our  information  hubs will
permit  businesses to outsource certain  components of their computing  systems,
including e-mail messaging, remote backup of databases, software development and
testing platforms. By outsourcing these components, businesses would not have to
own or manage  their own  complex  computer  systems.  This would  also  provide
businesses  access  to  up-to-date,   highly  scalable,  reliable  and  flexible
technology  that they  might  otherwise  not be able to  afford  due to the high
capital  costs  involved  and the  necessity of hiring,  training and  retaining
experienced computer personnel. We believe that businesses will employ selective
information technology outsourcing to increase competitiveness or gain access to
new resources and skills.

         We have  established  a strategic  alliance  with  Computer  Associates
International  Inc.,  (CA)  Services  designed to combine CA's robust  eBusiness
infrastructure  solutions and Enterprise Delivery Center (EDC) capabilities with
our application service provider services and technology. CA will be building an
EDC in our Calgary,  Alberta  office.  We have  committed to use  $1,835,300  in
development  services  from CA  during  the  first  year  of this  relationship,
beginning July 1, 2000, on a best efforts basis. CA will provide us with various
personnel  resources and pricing discounts on products and services.  We believe
that as a result of this alliance,  organizations  around the world will be able
to cost-  effectively  leverage  some of the most advanced  eBusiness  solutions
currently available.

                                      -11-

<PAGE>

         Our third party  application  hosting has been  commercially  available
since  December  1999.  However,  there can be no assurance  that a  substantial
market for the hosting of third-party applications will develop and grow.

Marketing and Sales Strategy

         Our marketing strategy will be to bundle our services with the existing
products  and services of  companies  such as AT&T  Canada,  with whom we have a
non-binding  letter of intent and with whom we are in the process of negotiating
an agreement; Sun Microsystems, Inc. under the ServiceProvider.com(TM)  program;
CA, and companies whose  third-party  applications we will host. We believe that
the existing customer  relationships will provide us with a sales advantage.  We
will employ a small direct sales force of approximately 12 salespeople with both
selling and technical  expertise,  to support the initiatives of these companies
as well as to focus on a limited number of targeted  customers/niche markets. In
addition,  we plan to market our  services  through  attendance  at  tradeshows,
advertising and articles in industry  periodicals,  referrals from customers and
our website. To date, we have had limited sales.

         A major  component of our marketing  and sales  strategy is the pricing
structure  for our  services  which will be offered  to  customers  on a per-use
basis,  which will allow  customers  the  ability to pay only for what they use,
thus  converting a fixed cost into a variable one. We believe that this flexible
pricing strategy will be very attractive to potential customers.

Competition

         The market for our  products  and  services is highly  competitive  and
subject to rapid  technological  change.  There are many  companies  that act as
application service providers, offering third-party application hosting to their
customers,  including U.S. Internetworking Inc., FutureLink Corp. and Corio Inc.
Our management does not know of any other company currently offering the virtual
call  center  and   distance   learning   applications   developed  by  InfoCast
Corporation.  With  respect to the  distance  learning  application  that we are
developing,  competition  currently consists of many companies offering learning
via  CD-ROM and the  Internet,  including  SmartForce,  DigitalThink,  Inc.  and
click2learn.com,  inc. With respect to the virtual call center  application that
we are developing,  competition currently consists of the many traditional brick
and mortar call centers,  including  Convergis Corp. and APAC Customer  Services
Inc. We believe that our ability to compete  depends on many factors both within
and beyond our control, including the success of our marketing and sales efforts
and those of our  competitors,  the price and  reliability  of our  products and
services and those of our  competitors  and the timing and market  acceptance of
our products and services and those of our competitors.  Competitors may quickly
deploy  products and e-commerce  technology  that could limit our expansion.  We
expect competition to increase in the future. Many of our potential  competitors
have substantially greater financial,  technical and marketing resources than we
do.  Increased  competition  could materially and adversely affect our business,
financial condition and results of operations. We cannot assure you that we will
be able to compete successfully.

Intellectual Property and Other Proprietary Rights

         Our  success is  dependent  in part on  intellectual  property  rights,
including information technology, some of which is proprietary to us such as our
software that comprises the learning  management  system, a filtering  engine, a
corporate  hosted  e-mail  service that  integrates  our  filtering  engine with
industry   standard   e-mail  and  directory   servers  from  Netscape  and  Sun
Microsystems,  a methodology  that allows us to rapidly host  applications  from
independent  software  vendors on our  information  hub,  and  various  software
integration  tools.  We  rely  on a  combination  of  nondisclosure  agreements,
technical  measures,  trade secret and trademark laws to protect our proprietary
rights.  We do not  presently  hold any  patents  for our  existing  products or
services and presently have no patent applications pending. We have entered into
confidentiality  agreements with most of our employees,  and anticipate that any
future employees will also enter into such agreements.  We also attempt to limit
access to and distribution of proprietary information. There can be no assurance
that  the  steps  taken  by  us  in  this  regard  will  be  adequate  to  deter
misappropriation  of  proprietary  information or that we will be able to detect
unauthorized  use or take  appropriate  steps to enforce  intellectual  property
rights.  In addition,  there can be no assurance that our  competitors  will not
independently develop technologies that are substantially equivalent or superior
to our technology. Further, the laws of many foreign countries do not

                                      -12-

<PAGE>

protect our  intellectual  property rights to the same extent as the laws of the
United States.  Our failure to protect our proprietary  information could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

         From  time  to  time,  third  parties  may  assert  exclusive   patent,
copyright, trademark and other intellectual property rights to technologies that
are used by us. We may need to take  legal  action to defend  ourselves  against
claimed  infringements  of the  rights of others or to  determine  the scope and
validity  of the  proprietary  rights of others.  We may also need to take legal
action to enforce  and  protect  our trade  secrets  and our other  intellectual
property  rights.  Any such  litigation  could be costly and cause  diversion of
management's attention,  either of which could have a material adverse effect on
our  business,   financial   condition  and  results  of   operations.   Adverse
determinations  in such  litigation  could result in the loss of our proprietary
rights,   subject   us   to   significant    liabilities   (including   possible
indemnification  of our  customers),  require us to secure  licenses  from third
parties or prevent us from  manufacturing  or selling our  products or services,
any one of which could have a material adverse effect on our business, financial
condition  and  results  of  operations.  We have  not  been a party to any such
litigation  to date.  We have not  conducted  a formal  patent  search  relating
generally to the technology used in our products or services. In addition, since
patent  applications  in the United States are not publicly  disclosed until the
patent  issues  and  foreign  patent  applications  generally  are not  publicly
disclosed for at least a portion of the time that they are pending, applications
may have been filed which, if issued as patents, would relate to our products or
services.  Software  comprises a  substantial  portion of the  technology in our
products. The scope of protection accorded to patents covering  software-related
inventions  is  evolving  and is  subject  to a degree of  uncertainty  that may
increase  the risk and cost to us if we discover the  existence  of  third-party
patents related to our software products or if such patents are asserted against
us in the future. Patents have been granted recently on fundamental technologies
in  software,  and patents may issue which  relate to  fundamental  technologies
incorporated into our products or services.

         While we employ  proprietary  software  technology  and  algorithms and
conduct ongoing research and development, our future success will depend in part
upon our ability to keep pace with advancing  technology,  evolving industry and
changing  customer  requirements  in a  cost-effective  manner.  There can be no
assurance that our  proprietary  software  technology and algorithms will not be
rendered  obsolete  by other  technology  incorporating  technological  advances
designed by competitors  that we are unable to incorporate  into our products or
services in a timely manner.

         The market for our products and  services is  characterized  by rapidly
changing  technologies.  The rapid development of new technologies increases the
risk that current or new  competitors  could  develop  products or services that
would reduce the  competitiveness of our products or services.  Our success will
depend to a  substantial  degree  upon our  ability  to  respond  to  changes in
technology and customer  requirements.  This will require the timely  selection,
development  and  marketing of new products or services  and  enhancements  on a
cost-effective basis. The development of new,  technologically advanced products
or  services  is a complex  and  uncertain  process,  requiring  high  levels of
innovation.  The  introduction  of new and  enhanced  products or services  also
requires that we manage  transitions from older products or services in order to
minimize  disruptions.  There can be no assurance  that we will be successful in
developing,  introducing or managing the transition to new or enhanced  products
or  services  or that  any such  products  or  services  will be  responsive  to
technological  changes or will gain market acceptance.  Our business,  financial
condition and results of operations would be materially adversely affected if we
were to be  unsuccessful,  or to incur  significant  delays,  in developing  and
introducing such new products, services or enhancements.

Employees

         At May 31, 2000, we had 50 full-time  employees.  None of our employees
is represented by a collective  bargaining agreement nor have we experienced any
work stoppage. We consider our relations with our employees to be good.


                                      -13-

<PAGE>

                                    GLOSSARY

         Application  Service Provider (ASP): An application service provider is
         a company that offers  individuals or enterprises  electronic access to
         application  programs and related services that would otherwise have to
         be located in their own personal or enterprise computers.

         Architecture:  In the  context  of  computers,  servers  and  networks,
         architecture  is a term  applied to both the process and the outcome of
         thinking out and specifying the overall structure,  logical components,
         and the  logical  interrelationships  of a  computer,  a server,  their
         operating systems, and a network.

         Automated Call Distribution:  Automated Call Distribution  involves the
         use of a telephone  facility  that manages  incoming  calls and handles
         them based on the number called and an associated  database of handling
         instructions.  Companies  offering  sales and service  support use this
         function to validate callers, make outgoing responses or calls, forward
         calls to the right  party,  allow  callers to record  messages,  gather
         usage  statistics,  balance the use of phone lines,  and provide  other
         services.

         Browser:  A program that allows a person to read  hypertext.  A browser
         gives some means of viewing  the  contents  of nodes (or  "pages")  and
         navigating from one node to another.  Netscape  Navigator is an example
         of a browser for the World Wide Web.

         Call Center:  A call center is a central place where customer and other
         telephone  calls are  handled  by an  organization,  usually  with some
         amount of computer automation. Typically, a call center has the ability
         to handle a  considerable  volume of calls at the same time,  to screen
         calls and forward them to someone  qualified to handle them, and to log
         calls. Call centers tend to be used by large organizations that use the
         telephone to sell or service products and services.

         CD-ROM:  CD-ROM  technology  is a  format  and  system  for  recording,
         storing, and retrieving  electronic  information on a compact disk that
         is read using a laser optical drive.

         Distance Learning: A type of education where students work on their own
         at home  or at the  office  and  communicate  with  faculty  and  other
         students via e-mail,  electronic  forums,  videoconferencing  and other
         forms of computer-based communication.

         Firewall:  A  firewall  is a set of  related  programs,  located on the
         server functioning as an entry point into a network,  that protects the
         resources of that network from users from other networks.

         Information Technology (IT): Information Technology is an umbrella term
         used to  describe  all  forms  of  technology  used to  create,  store,
         exchange, and use information in its various forms.

         Interactive  Voice Response:  Interactive  voice response "gives data a
         voice."  By using the touch  tones on a  telephone  keypad,  or in some
         cases, the spoken voice, a caller can request,  manipulate, and in some
         cases modify data that resides on a "host" database somewhere.  Typical
         applications  include:  banking by phone, checking airline reservations
         by phone,  checking  credit card balance by phone and  registering  for
         college courses by phone. The technology is  "interactive"  because the
         user is prompted  for  information  by the system.  For  example,  in a
         banking by phone application, the system will ask a caller to enter its
         account number from the telephone  keypad.  After the caller enters its
         number,  the system  interacts  with the  caller  further by giving the
         caller additional options.

         Interface:  A  boundary  across  which  two  systems  communicate.   An
         interface  might be a hardware  connector used to link to other devices
         or it might be a  convention  used to allow  communication  between two
         software systems.  Often there is some  intermediate  component between
         the two systems that connects their interfaces together.


                                      -14-

<PAGE>

         Java: Java is a programming  language expressly designed for use on the
         Internet. Java can be used to create complete applications that may run
         on a single  computer or be distributed  among servers and clients in a
         network.  It can also be used to build small  application  modules,  or
         applets,  for use as part of a web page. Applets make it possible for a
         web page user to interact with the page.

         Netra T-1 Server: A computer server developed by Sun Microsystems  Inc.
         which is designed for and aimed  specifically  at the needs of Internet
         and application service providers.

         Network:  Any system  designed to provide one or more access  paths for
         communications   between  users  at  different  geographic   locations.
         Communications   networks  may  be  designed  for  voice,  text,  data,
         facsimile image and/or video.  They may feature limited access (private
         networks) or open access  (public  networks)  and will employ  whatever
         switching and transmission technologies are appropriate.

         Operating  System (OS): An operating  system is the program that, after
         being  initially  loaded  onto  the  computer,  manages  all the  other
         programs in a computer.  Examples of operating  systems include DOS and
         Windows.

         Server: A server is a computer program that provides  services to other
         computer  programs in the same or other computers.  The computer that a
         server program runs in is frequently referred to as a server (though it
         may contain a number of server and client programs).

         Sun Solaris: Sun Solaris is Sun Microsystems Inc.'s version of the UNIX
         operating system,  including networking software, a windows environment
         and a graphical user interface.

         Unified Messaging: The communication  application that combines e-mail,
         voicemail and facsimile.

         Virtual:  The term  virtual  means the quality of  effecting  something
         without actually being that something.

         Virtual  Private  Network (VPN): A virtual private network is a private
         data   network   that  makes  use  of  the   public   telecommunication
         infrastructure, maintaining privacy through the use of various security
         procedures such as data encryption.

         Voice Over-IP (VoIP): Voice Over Internet Protocol is a term used for a
         set of  facilities  and  programs  that  manage the  delivery  of voice
         information, such as telephone calls, over the Internet.


                                      -15-

<PAGE>

Item 2. Properties

         Our corporate  headquarters  are located in 2,190 square feet of leased
office space in Chicago,  Illinois and our operational  headquarters are located
in 6,457 square feet of leased  office space in Toronto,  Canada.  HomeBase Work
Solutions  has offices  located in 6,400  square feet of leased  office space in
Calgary,  Canada. Our lease in Toronto, Canada expires in May 2004, our lease in
Chicago, Illinois expires in March 2002 and the HomeBase Work Solutions lease in
Calgary expires in August 2005. Along with our subsidiaries, we also lease other
facilities  that are not material to our business.  We believe that our existing
facilities are adequate for our needs for the foreseeable  future and that if we
need additional space, it will be available on favorable terms.

Item 3.  Legal Proceedings

         We are not currently involved in any material legal  proceedings.  From
time to time,  however,  we may be subject to claims and lawsuits arising in the
normal course of business.


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

         No matters  were  submitted  to a vote of the holders of the  Company's
Common Stock during the fourth quarter of the Company's  fiscal year ended March
31, 2000.


                                      -16-

<PAGE>

                                     PART II

Item 5.  Market  for  Registrant's  Common  Stock and  Related  Security  Holder
         Matters

         The  Company's  Common  Stock is  currently  traded on the OTC Bulletin
Board  under  the  symbol  "IFCC."  Prior  to  changing  its  name  to  InfoCast
Corporation  on December 31,  1998,  its Common Stock traded on the OTC Bulletin
Board under the symbol  "GNRS." The following  table sets forth the high and low
prices on the OTC Bulletin Board for the periods  indicated,  as reported by the
OTC  Bulletin  Board (as  adjusted to reflect a 2 for 1 stock split  effected on
October 20, 1998).  The Company's  Common Stock  commenced  trading on August 7,
1998. Such prices represent  quotations between  broker-dealers,  do not include
retail  mark-ups,  mark-downs or commissions,  and may not  necessarily  reflect
prices in actual transactions.

                                                             High        Low
                                                             ----        ---
1998
Third Quarter (August 7, 1998 to September 30, 1998)......  $ 0.63      $0.25
Fourth Quarter (October 1, 1998 to December 31, 1998).....  $ 5.25      $0.19

1999 (January 1, 1999 to March 31, 1999)
First Quarter.............................................  $ 7.00      $4.25

2000 (April 1, 1999 to March 31, 2000)
First Quarter.............................................  $10.12      $4.50
Second Quarter............................................  $13.00      $7.00
Third Quarter.............................................  $ 8.88      $5.56
Fourth Quarter............................................  $10.25      $5.81


Holders

         As of June 1, 2000,  there were 244 holders of record of the  Company's
Common Stock.

Dividends

         The Company has not paid cash  dividends  on its Common Stock since its
inception and does not intend to pay cash  dividends on its Common Stock for the
foreseeable future. The Company intends to reinvest future earnings,  if any, in
the development  and expansion of its business.  The declaration of dividends in
the future  will be at the  election of the Board of  Directors  and will depend
upon the  Company's  earnings,  capital  requirements  and  financial  position,
general economic conditions and other relevant factors.


                                      -17-

<PAGE>

Sale of Unregistered Securities

         The following unregistered securities were issued by the Company during
the quarter ended March 31, 2000:

<TABLE>
<CAPTION>

                                                      Number of Shares           Offering/
       Date of             Description of           Sold/Issued/Subject          Exercise
    Sale/Issuance         Securities Issued        To Options or Warrants     Price Per Share         Notes
    -------------         -----------------        ----------------------     ---------------         -----

<S>                     <C>                              <C>                      <C>         <C>
January 1, 2000         Warrants                             12,500               $7.62
January 27,  2000       Common shares                       200,000               $           Issued under terms of Minutes of
                                                                                              Settlement with ACT
January 28, 2000        Common Shares                         5,000               $           Exchange of InfoCast Canada
                                                                                              exchangeable shares into InfoCast
                                                                                              common shares
February 1, 2000        Options                             175,000               $1.00       Granted to a consultant under the
                                                                                              1998 Stock Option Plan
February 11, 2000       Warrants                             56,000               $5.00
February 18, 2000       Options                              20,000               $7.00       Granted to an employee under the
                                                                                              1999 Stock Option Plan
February 24, 2000       Common shares                       500,000               $           Received 150,000 common shares of
                                                                                              a publicly-traded company  as
                                                                                              consideration
February 29, 2000       Options                             100,000               $8.63       Granted to an employee under the
                                                                                              1999 Stock Option Plan
March 3, 2000           Common shares                     1,395,699               $           Exchange of InfoCast Canada
                                                                                              exchangeable shares into InfoCast
                                                                                              common shares
March 16, 2000          Common shares                         5,000               $           Exchange of InfoCast Canada
                                                                                              exchangeable shares into InfoCast
                                                                                              common shares
March 20, 2000          Common shares                        73,139               $           Exchange of InfoCast Canada
                                                                                              exchangeable shares into InfoCast
                                                                                              common shares
March 30, 2000          Common shares                        10,347               $           Exchange of InfoCast Canada
                                                                                              exchangeable shares into InfoCast
                                                                                              common shares
March 31, 2000          Share Purchase                      388,889               $7.50       As part of the convertible
                        Warrants                                                              subordinated debenture financing
March 31, 2000          Agent Share Purchase                 97,222               $7.50       As part of the convertible
                        Warrants                                                              subordinated debenture financing
</TABLE>


                                      -18-

<PAGE>

         The  issuance  of  these  securities  is  claimed  to  be  exempt  from
         registration pursuant to Section 4(2) of the Securities Act of 1933, as
         amended,  as transactions by an issuer not involving a public offering.
         There were no underwriting  discounts or commissions paid in connection
         with the issuance of any of these securities.



                                      -19-

<PAGE>

Item 6.   Selected Financial Data

         The  selected  financial  data set  forth  below are  derived  from our
financial  statements  included  elsewhere  in this Report and are  qualified by
reference to and should be read in conjunction  with such financial  statements,
including  the notes  thereto,  and  "Management's  Discussion  and  Analysis of
Financial  Condition  and  Results of  Operations"  included  elsewhere  in this
Report.  The  financial  statements as of and for the year ended March 31, 2000,
the three months ended March 31, 1999,  the year ended December 31, 1998 and the
period from July 29, 1997  (inception) to December 31, 1997 have been audited by
Ernst & Young LLP, independent certified public accountants. The information for
the three months  ended March 31, 1998 is  unaudited  and, in the opinion of our
management  contains  all  adjustments  (consisting  only  of  normal  recurring
adjustments)  necessary for a fair  presentation  of our financial  position and
results of operations at such dates and for such periods. The historical results
for the periods ended December 31, 1997 and 1998 and March 31, 1998 are those of
Virtual  Performance   Systems.  The  historical  results  are  not  necessarily
indicative of the results of operations to be expected in the future.

<TABLE>
<CAPTION>

                                 Year ended                                                                         Period from
                               March 31, 2000          Three months ended March 31,                                 July 29, 1997
                               --------------          ----------------------------              Year ended         (inception) to
Statement of                                            1999                1998             December 31, 1998    December 31, 1997
                                                        ----                ----             -----------------    -----------------
Operations Data:
<S>                              <C>                 <C>                  <C>                <C>                       <C>
Revenues...................      $   305,754         $       --           $43,446            $ 43,446                  $  3,508
General,
administrative and
selling expense............      $ 7,391,128         $  635,334           $42,494            $375,302                  $ 47,954
Stock option
compensation
expense....................      $13,351,908         $2,256,938           $    --            $     --                  $     --
Research and
development
expense....................      $ 5,186,265         $  162,914           $19,703            $ 88,180                  $ 51,257
Interest and
loan fees..................      $ 1,913,482         $   23,562           $    --            $     --                  $     --
Amortization...............      $ 4,315,180         $    4,144           $    --            $     --                  $     --
Depreciation...............      $   495,401         $    5,507           $   870            $  3,836                  $    458
Total expenses.............      $32,653,364         $3,088,399           $63,067            $467,318                  $ 99,669
Interest income............      $   132,057         $    4,478           $    --            $     --                  $     --
Net loss
for the period.............      $31,151,184         $3,083,921           $19,621            $423,872                  $ 96,161
Net loss per share.........      $      1.37         $     0.27           $478.56            $   0.55                  $  2,345
</TABLE>



                                      -20-

<PAGE>
<TABLE>
<CAPTION>
                                                    As of March 31,                         As of December 31,
                            ----------------------------------------------------    ---------------------------------
Balance Sheet Data:                 2000                1999            1998               1998                1997
                                    ----                ----            ----               ----                ----
Cash and cash
<S>                              <C>                 <C>              <C>               <C>                 <C>
equivalents................      $ 3,637,931         $3,092,445       $      --         $   25,595          $     301
Working capital............      $ 5,823,306         $2,840,129       $(126,785)        $(564,601)          $(106,438)
Total assets...............      $34,569,481         $4,025,076       $  47,510         $  143,467          $ $28,604
Long term debt and
obligations under
capital leases,
excluding current
portion....................      $ 4,302,836         $       --       $      --         $      --           $      --
Stockholders'
equity.....................      $22,295,007         $3,493,112       $(115,376)        $(496,667)          $ (94,459)
</TABLE>



Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

         The consolidated financial statements of the Company are the continuing
financial statements of Virtual Performance  Systems,  Inc., a development stage
company  and an  Ontario  corporation  incorporated  on July 29,  1997.  Virtual
Performance  Systems  had a 100%  interest  in, and  subsequently  merged  with,
Cheltenham  Technologies  Corporation  ("Cheltenham  Technologies"),  an Ontario
corporation.  Virtual  Performance  Systems has a 100%  interest  in  Cheltenham
Interactive  Corporation   ("Cheltenham   Interactive"),   an  inactive  Ontario
corporation,  and Cheltenham  Technologies  (Bermuda)  Corporation  ("Cheltenham
Bermuda"),  a Barbados corporation that owns certain intellectual  property.  On
January 29, 1999,  Virtual  Performance  Systems  acquired the net assets of the
Company  (formerly  known  as  Grant  Reserve  Corporation),   a  United  States
non-operating  company traded on the Nasdaq OTC Bulletin Board, which had a 100%
interest  in  InfoCast  Canada  Corporation   ("InfoCast  Canada").   After  the
acquisition,  the  accounting  entity  continued  under  the  name  of  InfoCast
Corporation. InfoCast Corporation, InfoCast Canada, Virtual Performance Systems,
Cheltenham  Technologies,  Cheltenham  Interactive  and  Cheltenham  Bermuda are
collectively referred to in this section as the "Company."

         The  following  discussion  should  be read  in  conjunction  with  our
historical  financial  statements and notes thereto  included  elsewhere in this
Report.

         This report  contains  certain  forward-looking  statements  within the
meaning of Section  27A of the  Securities  Act of 1933,  and Section 21E of the
Securities Exchange Act of 1936, as amended, which are intended to be covered by
the safe  harbors  created  thereby.  Although we believe  that the  assumptions
underlying the forward-looking  statements contained herein are reasonable,  any
of the assumptions could be inaccurate, and therefore, there can be no assurance
that the  forward-looking  statements  included  in this report will prove to be
accurate.  Factors  that could cause  actual  results to differ from the results
discussed in the  forward-looking  statements  include,  but are not limited to,
competition,  product  acceptance  and  changing  technology.  In  light  of the
significant  uncertainties  inherent in the forward-looking  statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by the Company or any other person that the objectives and plans
of the Company will be achieved.



                                      -21-

<PAGE>

Overview

         We are an emerging  company that has  developed the  infrastructure  to
enable us to host both our own customized and third-party software  applications
that  can  be  accessed  remotely  by  businesses  and  their  employees.   This
infrastructure  consists of:  computer  hardware  purchased  from third parties;
software  applications;  and  communication  connections over private and public
networks,  including  the  Internet.  We are now entering the  commercialization
phase and plan to provide our customers  with access to our  infrastructure  and
hosted  applications on a per use basis.  Companies providing such services have
recently come to be known as application service providers or "ASPs."

         We have incurred  operating losses since our inception in July 1997. We
have had limited  sales of our products and services on a commercial  basis.  We
have  sustained  ourselves  through the sale of our Common Stock and warrants to
purchase  Common  Stock in a series  of  private  placements,  the  issuance  of
convertible debentures and shareholder loans. On a long term basis, we will need
to raise  additional  funds through private or public  financings,  strategic or
other relationships. There can be no assurance that such funds will be available
on commercially reasonable terms in the future.

         We  acquired  HomeBase  Work  Solutions  in May  1999 in  exchange  for
3,400,000 shares of InfoCast Canada,  which shares are exchangeable  into Common
Stock of the Company.  The HomeBase Work Solutions  acquisition provided us with
the core  technology for our  information  hub strategy.  The  acquisition  also
introduced third-party application hosting initiatives to the Company which will
be hosted on our  information  hubs.  The virtual  call center  application  and
distance learning library developed by us will also be hosted on the information
hubs.

         Effective  for the period  ended  March 31,  1999 we changed our fiscal
year end from December 31 to March 31. Therefore, financial statements have been
prepared for the three month transition period ended March 31, 1999.

Results of Operations

Year ended March 31, 2000 vs. year ended March 31, 1999

         Revenue  increased  from  zero for the year  ended  March  31,  1999 to
$305,754  for the year  ended  March 31,  2000 as we began to earn  hosting  and
distance learning revenues, received revenue from the sale of computer equipment
and performed  miscellaneous  consulting  services during the period ended March
31, 2000.

         Interest income increased from $4,478 for the year ended March 31, 1999
to $132,057 for the year ended March 31, 2000.  The proceeds  received  from the
private  placements in 1999 were invested in short term deposits which generated
interest income for us during the year ended March 31, 2000, consistent with our
investment policy.

         General,  administrative  and selling expenses  increased from $968,142
for the year ended  March 31,  1999 to  $7,391,128  for the year ended March 31,
2000.  The  consolidation  of the  operations of HomeBase Work Solutions for the
period May 13, 1999 to March 31, 2000 accounted for $382,000 of the increase. We
had seven  more  employees  involved  in  general,  administrative  and  selling
functions  in the year ended March 31, 2000 than for the same period ended March
31, 1999,  contributing  approximately  $540,000 to the increase in expenses. We
paid consulting fees to three additional consultants during the year ended March
31,  2000  compared to the same period  ended  March 31,  1999  resulting  in an
increase in consulting fees of approximately $1,214,000 for the year ended March
31, 2000.  Investor  relations  costs of  $1,143,465  were incurred for the year
ended March 31, 2000. Additional rent expenses of $127,000 were incurred for the
two U.S.  offices that were not open in September 1998 and the expanded  Toronto
office space.  We expensed  $644,000 for warrants issued for services during the
year ended March 31, 2000 and expensed an additional  $439,800 related to common
stock  issued for  services  during the year ended March 31,  2000.  We incurred
sales and  marketing  expenses  related to the Call  Center  Learning  Solutions
On-Line Inc. joint venture of $198,000 during the year ended March 31, 2000.



                                      -22-

<PAGE>

         Stock option  compensation  expense  increased from  $2,256,938 for the
year ended March 31, 1999 to $13,351,908 for the year ended March 31, 2000. This
increase  is  due to  the  amortization  of  the  deferred  compensation  amount
resulting from the grant of stock options to various individuals involved in the
management and operations of the Company.

         Research and development  expenses increased from $231,391 for the year
ended  March 31, 1999 to  $5,186,265  for the year ended  March 31,  2000.  This
increase is primarily due to continued efforts to develop and expand our product
offerings.  We incurred expenses of approximately $607,000 from the write off of
advances made to ACT which had been used to fund development expenses related to
the  electronic  conversion  of  courseware in the year ended March 31, 2000. We
also wrote off a $95,000 receivable from ACT to research and development expense
during the year ended March 31, 2000. We also expensed  $1,337,500 which was the
value  attributed to the 200,000  common  shares issued to two ACT  shareholders
during the year ended March 31, 2000.  The  consolidation  of the  operations of
HomeBase  Work  Solutions  for the year  ended  March  31,  2000  accounted  for
$1,639,000 of the increase.  We had nine more employees involved in research and
development  functions in the year ended March 31, 2000 than for the same period
ended March 31,  1999,  contributing  approximately  $663,000 to the increase in
expenses.  We paid consulting fees to the same number of consultants  during the
year ended March 31, 2000  compared to the same period  ended March 31, 1999 but
incurred  approximately $71,000 in additional consulting fees for the year ended
March 31, 2000.

         Interest and loan fees  increased from $23,562 for the year ended March
31,  1999 to  $1,913,482  for the year ended  March 31,  2000.  The  convertible
subordinated  debentures  that were issued on March 30,  2000 have a  conversion
feature that was in-the-money and exercisable at the date of issuance  resulting
in the intrinsic  value of the feature of  $1,913,482  being charged to interest
expense at the time the debentures were issued.

         Amortization  expenses  increased  from $4,144 for the year ended March
31, 1999 to $4,315,180  for the year ended March 31, 2000.  Amortization  of the
acquired  intellectual  property and goodwill  resulting from the acquisition of
HomeBase  Work  Solutions  accounted  for the  majority  of the  increase in the
amortization expense for the year.

         Depreciation  expenses  increased  from $8,473 for the year ended March
31,  1999 to  $495,401  for the year ended March 31,  2000.  This  increase is a
result of the acquisition of additional capital assets between April 1, 1999 and
March 31, 2000.

         Equity in loss of joint venture  increased from zero for the year ended
March 31, 1999 to $164,736  for the year ended March 31,  2000.  During the year
ended March 31, 2000, we became shareholders in a new company that is developing
a web-enabled  trading  business model for crude oil and natural gas liquids and
other  products.  As at March 31, 2000, our ownership in this company was 34.48%
on a fully diluted basis.

         Deferred  income taxes increased from zero for the year ended March 31,
1999 to  $1,229,105  for the year ended  March 31,  2000 as a result of the draw
down of the deferred  income tax  liability  created by the purchase of HomeBase
Work  Solutions  by the  Company  in respect  of the  difference  in the tax and
accounting basis of various intellectual property assets.

Year ended  December 31, 1998 compared to the 156 day period ended  December 31,
1997

         Revenue increased from $3,508 for the 156 day period ended December 31,
1997 to $43,446 for the year ended  December 31, 1998.  This  increase is due to
the timing of the provision of one-time  computer  programming  services,  as we
began  providing  these  services at the end of 1997 and  continued  to provided
these  services  in the  first  calendar  quarter  of  1998.  In  early  1998 we
discontinued providing these consulting services.

         General, administrative and selling expenses increased from $47,954 for
the 156 day  period  ended  December  31,  1997 to  $375,302  for the year ended
December 31, 1998.  This increase is due to the expenses  being incurred for the
full year ended  December 31, 1998  compared to a 156 day period ended  December
31, 1997 and the continuing  expansion of business  operations.  Consulting fees
were higher in 1998 as we engaged  additional  consultants to assist



                                      -23-

<PAGE>

in  building  the   management   team  and  enhancing  the  business  model  and
infrastructure  of the  Company.  We  incurred  higher  legal costs in 1998 as a
result  of  legal  services  rendered  during  1998  for  the  reverse  takeover
transaction,  as well as for the HomeBase Work  Solutions  acquisition,  both of
which were completed in 1999.

         Research and  development  expenses  increased from $51,257 for the 156
day period ended  December  31, 1997 to $88,180 for the year ended  December 31,
1998.  This  increase is due to the  expenses  being  incurred for the full year
ended December 31, 1998 compared to a 156 day period ended December 31, 1997 and
the continuing expansion of our research and development efforts.

         Depreciation  expenses increased from $458 for the 156 day period ended
December 31, 1997 to $3,836 for the year ended December 31, 1998.  This increase
is a result of depreciation  being incurred for the full year ended December 31,
1998 compared to a 156 day period ended December 31, 1997 and the acquisition of
additional capital assets during the year ended December 31, 1998.

Liquidity and Capital Resources

Inception to March 31, 2000

         At March 31, 2000, we had cash and cash  equivalents  of $3,637,931 and
working capital of $5,823,306.  Our cash and cash  equivalent  position has been
generated through a series of equity and debt offerings net of development stage
expenditures. To date, we have generated limited revenues.

         From our  inception  on July 29,  1997 to  January  29,  1999,  Virtual
Performance Systems issued 3,624,100 shares of Common Stock for cash proceeds of
Cdn.$3,732 (or $2,586 in U.S. dollars as of December 31, 1999).  Pursuant to the
reverse  takeover  transaction on January 29, 1999, the  shareholders of Virtual
Performance  Systems sold their 100% interest in Virtual  Performance Systems to
the Company in  consideration  for 1,500,000  shares of InfoCast  Canada,  which
shares are  exchangeable  into Common  Stock of the  Company  for no  additional
consideration.  Such  exchangeable  shares  have been deemed as shares of Common
Stock of the Company  because they are the economic  equivalent of the Company's
Common Stock. At the time of the reverse  takeover,  the Company (formerly Grant
Reserve  Corporation) had 13,580,000  shares of Common Stock  outstanding  which
continued as shares of Common Stock of the continuing entity.  Subsequent to the
reverse  takeover and up to March 31, 2000, we issued 3,023,333 shares of Common
Stock at $1.50 per share in a private  placement in March 1999, 60,000 shares of
Common Stock in  consideration  for consulting  services in March 1999,  420,000
shares of Common  Stock at $5.00 per share in a private  placement in June 1999,
1,879,000 shares of Common Stock at $5.50 per share in a private  placement from
July 1999 to November  1999.  We have raised cash proceeds of  $15,478,400  from
these private placements, net of share issuance costs.

         In February 2000 we issued  500,000 shares of Common Stock in a private
placement for which we received  150,000  shares of  restricted  Common Stock of
another  publicly  traded  company  as  consideration,  of which we will  retain
130,000 shares after commissions.  At March 31, 2000, these 130,000 shares had a
market value of  $3,900,000.  At May 31, 2000,  the market value of these shares
had decreased to $1,852,500.

         In  March  2000 we  issued  3,500  units  of  convertible  subordinated
debentures at $1,000 per unit for proceeds of $3,225,000, net of commissions. In
April 2000,  we issued an  additional  2,500 units of  convertible  subordinated
debentures at $1,000 per unit for proceeds of $2,325,000, net of commissions.

         From our inception,  we have used $10,786,000 for operating  activities
before  changes  in  non-cash  working  capital  balances  mainly as a result of
general,  administrative and selling and research and development  expenditures,
net of incidental  revenues.  We used a further  $2,142,000  for the purchase of
capital assets,  $2,975,000 on the purchase of distribution  rights and $323,000
on the placement of deposits.



                                      -24-

<PAGE>

         We relied on term  loans  from  shareholders,  directors  and  officers
during the period from our inception to the completion of the March 1999 private
placement  to fund our  operations.  These loans were repaid as at June 30, 1999
from the proceeds of the private placements.  We expect to use our existing cash
and cash equivalents for the following:

         - We plan to continue to invest in the research and  development of our
           information  hub  products  and  services  and  anticipate   spending
           approximately $5,800,000 on these efforts from April 1, 2000 to March
           31,  2001.  We believe  that the  revenue we expect to  generate  and
           related cash  collections  from sales of information hub products and
           services will help fund the cash  requirements of this division,  but
           there can be no assurance that it will do so.

         - We will use approximately  $2,000,000 from April 1, 2000 to March 31,
           2001 to deploy and enhance our virtual  call center  application.  We
           believe  that the  revenue we expect to  generate  and  related  cash
           collections  from sales of the virtual call center  application  will
           help fund the cash requirements of this application, but there can be
           no assurance that it will do so.

         - We expect to use approximately  $600,000 from April 1, 2000 to August
           31, 2000 in the development,  deployment and electronic conversion of
           courseware for the distance learning application. We believe that the
           revenue we expect to generate and related cash collections from sales
           of  the  distance  learning  application  will  help  fund  the  cash
           requirements of this application,  but there can be no assurance that
           it will do so.

         - We will use  approximately  $6,000,000  to fund the  post-acquisition
           expenses of i360.

         - We  will  use  the  remaining  capital  resources  to  fund  possible
           complementary  acquisitions,  develop  new  technologies,  and  other
           corporate working capital needs.

         We  believe  that  our  existing  cash,  expected  revenues  as well as
additional  proceeds we hope to receive from the completion of future  potential
financings will be sufficient to support our growth for  approximately  the next
twelve  months.  In the event that  additional  financings are not completed and
expected  revenues  and cash  flows are not  achieved,  the  Company  intends to
curtail its  development  plans and reduce expense levels  significantly  at the
appropriate  time.  In such event,  the Company  believes  that its current cash
reserves will support limited activities until May 2001.

         On a long term basis,  we will need to raise  additional  funds through
private or public financing,  strategic or other relationships.  There can be no
assurance that we will be able to raise any additional funds.

         Inflation has not been a major factor in our business.  There can be no
assurances that this will continue.

Year 2000 Compliance

         Prior to January 1, 2000,  there was a great deal of concern  regarding
the ability of computers to adequately  distinguish 21st century dates from 20th
century  dates due to the  two-digit  date  fields  used by many  systems.  Most
reports to date, however, are that computer systems are functioning normally and
the  compliance  and  remediation  work  accomplished  leading  up to  2000  was
effective to prevent any problems.

         To date, we have not experienced  such problems.  Computer experts have
warned,  however, that there may still be residual consequences of the change in
centuries. For example, some software programs may have difficulty resolving the
so-call  "century  leap year"  algorithm  which will also occur  during the Year
2000.  Any such  residual  consequences  could result in hardware  failure,  the
corruption or loss of data  contained in our internal  information  system,  and
failures  affecting our key vendors,  suppliers or  customers.  This in turn may
lead to legal action,  and may otherwise also have a material  adverse effect on
our business, results of operations or financial condition.



                                      -25-

<PAGE>

New Accounting Pronouncements

         The Financial  Accounting Standards Board issued Statement on Financial
Accounting Standards (SFAS) No. 133, Accounting for Derivatives  Instruments and
Hedging  Activities in 1998. SFAS No. 133  establishes  accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts  (collectively referred to as derivatives),  and for
hedging  activities.  It requires that an entity  recognize all  derivatives  as
either assets or liabilities in the statement of financial  position and measure
those  instruments  at fair value.  For a derivative not designated as a hedging
instrument,  changes  in the fair  value of the  derivative  are  recognized  in
earnings in the period of change.  The Company  must adopt SFAS No. 133 in 2001.
The Company  does not believe the  adoption of SFAS No. 133 will have a material
effect on the financial position or results of operations of the Company.

         On December 3, 1999,  the SEC staff  issued Staff  Accounting  Bulletin
(SAB)  No.  101,  Revenue  Recognition  in  Financial  Statements.  SAB No.  101
summarizes   certain  of  the  staff's  views  in  applying  generally  accepted
accounting  principles  to revenue  recognition  in  financial  statements.  The
Company will  incorporate  the  guidance of SAB No. 101 in the first  quarter of
fiscal 2001.  Management has not yet determined the impact that SAB No. 101 will
have on the financial position or results of operations of the Company.



                                      -26-

<PAGE>

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         The  Company  is  exposed  to  immaterial  levels of market  risks with
respect to  changes  in foreign  currency  exchange  rates.  Market  risk is the
potential loss arising from adverse changes in market rates and prices,  such as
foreign  currency  exchange  rates.  To the extent that the Company  consummates
financings  outside of Canada,  the Company receives  proceeds in currency other
than the Canadian dollar.  Most of the Company's operating expenses are incurred
in Canadian  dollars.  Thus, the Company's results of operations will tend to be
adversely  affected if there is a strong Canadian  dollar.  The Company does not
enter into derivatives or other financial instruments for trading or speculative
purposes,  nor does it enter into financial instruments to manage and reduce the
impact of changes in foreign currency exchange rates.

         The Company  currently  holds 130,000 shares of common stock of another
publicly-traded  corporation.  The  market  value of these  shares is subject to
fluctuation  on the  stock  market  on which  these  shares  trade and which may
adversely affect the potential proceeds when these shares are sold.

         The Company  issued  convertible  subordinated  debentures in March and
April 2000,  in the amount of $6.0 million which pay interest at a fixed rate of
7%. The Company is exposed to changes in interest  rates as it affects the value
of the debt and the Company's relative cost of capital.

         While the  Company  seeks to place its and cash  equivalents  with high
credit-quality  financial  institutions,  the Company is still exposed to credit
risk for uninsured amounts held by such institutions.

Item  8.   Financial Statements and Supplementary Data

         See the Company's Financial Statements listed in the accompanying Index
to Financial  Statements on Page F-1 herein.  Information required for financial
schedules  under  Regulation  S-X is either not applicable or is included in the
financial statements or notes thereto.

Item 9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

         Not applicable.


                                      -27-

<PAGE>

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant


         The directors and executive officers of the Company, and their ages and
positions with the Company are as follows:


         Name                    Age                 Position
         ----                    ---                 --------

Darcy Galvon                     43      Co-Chairman of the Board, Director
A. Thomas Griffis                58      Co-Chairman of the Board, Director
James Leech                      53      President, CEO and Director
Herve Seguin                     49      Chief Financial Officer and Secretary
Jennifer Scoffield               30      Vice     President,     Finance     and
                                         Administration
Carl Stevens                     53      President,  Virtual  Call  Centers  and
                                         e-Learning
Michael Sheehan                  58      Executive Vice President,  Virtual Call
                                         Center, Director
Richard Shannon                  54      President  and  CEO  of  HomeBase  Work
                                         Solutions Ltd.
Alexander "Sandy" Walsh          33      Chief Technology Officer
Glen Allmendinger                46      Director
George Shafran                   73      Director
Jeffrey S. Spindler              37      Director


         The  officers of the Company are elected by the Board of  Directors  at
the first meeting after each annual meeting of the Company's  stockholders,  and
hold office until their death, until they resign or until they have been removed
from  office.  The  Board  of  Directors  has  established  an  audit  committee
consisting of George Shafran, Jeffrey Spindler and Glen Allmendinger.

         The following is a brief summary of the background of each director and
executive officer of the Company:

         Mr. Galvon has been Co-Chairman and a director of the Company since May
13, 1999. In 1986,  Mr. Galvon founded Sun  MicroSystems,  Inc.'s Western Canada
office  in  Calgary,   Alberta,  where  he  was  responsible  for  covering  the
transportation,  utilities, education, manufacturing,  retail, entertainment and
software  developers in Calgary and the entire  province of  Saskatchewan.  From
1995 to the present,  Mr.  Galvon  served as a director of Sun Computer  Systems
Inc.  Alberta Ltd. and HomeBase Work Solutions  Ltd.,  which was acquired by the
Company in May 1999, and is currently a subsidiary of the Company. Mr. Galvon is
also a director of Facet  Petroleum  Solutions,  Inc.,  with which HomeBase Work
Solutions has entered into a licensing and  distribution  agreement.  He is also
Chairman of the Board of HomeBase Work Solutions.

         Mr.  Griffis  has been the  Chairman of the Board and a director of the
Company since January 12, 1999 and a Co-Chairman since May 13, 1999. Since 1986,
Mr.  Griffis  has  been the  founder  and sole  owner of  Griffis  International
Limited,  a  management   consulting  and  business  development  firm.  Griffis
International  Limited has focused its activities on the structuring,  financing
and management of emerging  companies,  particularly in the natural resource and
high-tech sectors.

         Mr. Leech has been President, Chief Executive Officer and a director of
the Company since  September 4, 1999.  From 1996 until September 1999, Mr. Leech
was Vice  Chairman and  Director at Kasten Chase  Applied  Research  Limited,  a
publicly-traded  data networking and wireless technology  company,  where he was
responsible for corporate strategy, finance, administration and production. From
1993 to 1996, Mr. Leech was President, Chief Executive Officer


                                      -28-

<PAGE>

and  Director  of  Disys  Corporation,  a  publicly-traded  wireless  technology
company, which was later merged into Kasten Chase Applied Research Limited.

         Mr.  Seguin has been the Chief  Financial  Officer of the Company since
January 4, 2000. and Secretary since May 17, 2000. From 1993 to 1999, Mr. Seguin
was the Vice  President  of Finance  and the Chief  Financial  Officer of Promis
Systems  Corporation  Ltd. (now PRI  Automation,  Inc.), a software  development
company, where he assisted in several rounds of public equity financing.

         Ms. Scoffield has been the Vice President,  Finance and  Administration
of the  Company  since  July 7,  1999.  From  February  1997 to June  1999,  Ms.
Scoffield held various positions at PRI Automation Inc. (formerly Promis Systems
Corporation Ltd.), a software  development  company,  most recently as Director,
Financial Projects.  From August 1996 to January 1997, Ms. Scoffield was Manager
of Finance for Pet Valu Canada,  Inc., a retail pet supply company.  From August
1993 to August 1996, Ms.  Scoffield was an accountant  with Ernst & Young in the
Entrepreneurial  Services  group where she  obtained  her  Chartered  Accountant
designation.

         Mr.  Stevens has been  President of Virtual Call Centers and e-Learning
since  December  1999.  From February 1997 to November  1999,  Mr.  Stevens held
various  positions at ITC Learning  Corporation,  most recently as President and
Chief Executive  Officer.  From 1971 to November 1996, Mr. Stevens held a number
of positions at IBM, most recently as Program Director for the Public Sector. In
that capacity, Mr. Stevens was responsible for the sale of personal computers to
the higher education,  kindergarten,  grammar school and high school markets, as
well as to federal, state and local governments.

         Mr. Sheehan has been Executive Vice President of the Company's  virtual
call center  division  since July 6, 1999 and a director  of the  Company  since
January 12, 1999. He served as the Chief  Executive  Officer of the Company from
January 12, 1999 to July 6, 1999.  From 1960 to 1998,  Mr. Sheehan held a number
of positions at AT&T,  most  recently as Director of Call Center  Solutions  for
AT&T Labs. At AT&T,  Mr.  Sheehan was  responsible  for managing the building of
complex  telecommunication  systems and  networks  and helped  create  strategic
marketing plans for introducing new AT&T services and products.

         Mr.  Shannon  has been the  President  and Chief  Executive  Officer of
HomeBase Work Solutions Ltd. since March 1999.  Since 1990, Mr. Shannon has been
a founding shareholder and managing director of Baycor Capital, Inc., a merchant
bank based in Calgary,  Alberta, as well as a founding  shareholder and director
of Nevada Bob's Canada Inc., a  publicly-traded  golf  retailer  with 85 company
stores and 200 franchised stores located in 10 countries.

         Mr. Walsh has been the Chief  Technology  Officer of the Company  since
May 1999.  From March 1998 to April 1999, Mr. Walsh was Director of Research and
Development - Business Intelligence Group for Hummingbird Communications Ltd., a
data networking company where he led product conceptualization and architectural
design  and  worked   with   industry   partners  to   integrate   complementary
technologies.  From March 1994 to February  1998, Mr. Walsh was Project Lead for
Andyne Computing Limited, a data networking company of Kingston,  Ontario. Prior
to joining Andyne  Computing  Limited,  Mr. Walsh held various  positions in the
software design field.

         Mr. Allmendinger has been a director of the Company since May 17, 2000.
Mr.  Allmendinger  is the  founder  and  CEO of  Harbor  Research,  a  strategic
consulting and business development firm based in Boston and San Francisco.  Mr.
Allmendinger   has  been  responsible  for  managing  Harbor  Research  and  its
consulting and research activities since its inception in 1983. Mr. Allmendinger
is a director of Stratepshere.com (a business  intelligence portal service based
in Boston),  DataSweep,  Inc. (a  supplier of B2B supply  chain  software in the
computing and electronics  sectors based in San Jose) and Cambridge  Studios (an
eLearning content and tools firm based in Cambridge).

         Mr.  Shafran has been a director of the Company since February 8, 1999.
Mr.  Shafran has been the  President  of Geo. P. Shafran &  Associates,  Inc., a
management, marketing and investment consulting firm, for at least the last five
years. Mr. Shafran serves as Senior  Consultant for The High  Performance  Group
and as an associate with the


                                      -29-

<PAGE>

Technical  Analysis  Corporation.  Mr. Shafran is  vice-chairman of The Heritage
Bank and a director of NVR Mortgage, Missing Kids, International and is chairman
of the  Advisory  Board  of the  AAA  Potomac.  Mr.  Shafran  also  serves  as a
consultant  to  various  other  companies.  He  currently  serves  on  President
Clinton's  Legislative  Council of the U.S. Chamber of Commerce and on the Board
of the National Capital Chapter of the American Red Cross.

         Mr. Spindler has been a director of the Company since January 2000. Mr.
Spindler has been a partner with Olshan Grundman Frome Rosenzweig & Wolosky LLP,
a New York City law firm,  since  January  1997.  From November 1993 to December
1996,  Mr.  Spindler was  associated  with Olshan  Grundman  Frome  Rosenzweig &
Wolosky LLP. Prior to that time and since September 1988, he was associated with
Cahill  Gordon &  Reindel,  also a New York City law firm.  Mr.  Spindler  is an
attorney  specializing  in  corporate  matters  including  finance,   securities
regulation and mergers and acquisitions.


Item 11.   Executive Compensation

         The following table sets forth, for the Company's 2000 fiscal year, all
compensation  awarded  to,  earned  by or paid to the  chief  executive  officer
("CEO") and the four most highly  compensated  executive officers of the Company
other than the CEO who were executive  officers of the Company during the fiscal
year ended  March 31, 2000 and whose  salary and bonus  exceeded  $100,000  with
respect to the fiscal year ended March 31, 2000.
<TABLE>
<CAPTION>

                                            SUMMARY COMPENSATION TABLE


                                                       Annual Compensation                       Long-Term Compensation
                                           ---------------------------------------------    ------------------------------
                                                                                Other Annual                 All Other
       Name and Principal                                                       Compensation   Number of   Compensation
            Position                Year         Salary($)        Bonus($)        ($)(1)        Options            ($)
---------------------------         ----        -----------       --------      ------------   ---------   ---------------

<S>                                 <C>           <C>             <C>           <C>             <C>               <C>
James Leech, President and          2000          $130,846        $10,196          ----         750,000           ----
 Chief Executive Officer            1999          $      -        $     -          ----            -              ----
                                    1998          $      -        $     -          ----            -              ----

Michael Sheehan, Chief              2000          $      -        $     -          ----            -              ----
 Executive Officer                  1999          $      -        $     -       $18,750         350,000           ----
                                    1998          $      -        $     -          ----            -              ----

Carl Stevens, President,            2000          $ 76,875        $50,000          ----         250,000           ----
 Virtual Call Centers and           1999          $      -        $     -          ----            -              ----
  e-learning                        1998          $      -        $     -          ----            -              ----
</TABLE>


(1)     Mr. Sheehan was the Company's Chief  Executive  Officer from January 12,
        1999 to July 6, 1999.  Mr.  Sheehan earned $18,750 from January 12, 1999
        to March 31, 1999 for his service as a consultant  to the  Company.  Mr.
        Leech became the Company's Chief Executive Officer on September 4, 1999.
        See "Employment Agreements."

Stock Option Plans

        In 1998, the Company adopted a stock option plan (the "1998 Stock Option
Plan") pursuant to which 2,250,000 shares of Common Stock have been reserved for
issuance upon the exercise of options  designated as either (i) options intended
to constitute incentive stock options under the Code, or (ii) nonqualified stock
options.  Incentive stock options and nonqualified  stock options may be granted
to employees of the Company.


                                      -30-

<PAGE>

        The  purpose  of the  1998  Stock  Option  Plan  is to  encourage  stock
ownership by officers and other key  employees and  consultants  and advisors of
the  Company.  The  1998  Stock  Option  Plan is  administered  by the  Board of
Directors of the Company.  The Board,  within the  limitations of the 1998 Stock
Option Plan,  determines the persons to whom options will be granted, the number
of shares to be covered by each option,  the option purchase price per share and
the manner of exercise,  and the time,  manner and form of payment upon exercise
of an option.

        The Company granted no stock options in the year ended December 31, 1998
and there were no option exercises in the year ended December 31, 1998. No stock
options were  outstanding  at December 31, 1998.  As of May 31, 2000,  1,950,000
options were  outstanding  under the 1998 Stock Option Plan at an exercise price
of $1.00 per share.

        The Company's  1999 Stock Option Plan (the "1999 Stock Option Plan") was
approved  by the Board of  Directors  of the Company on April 1, 1999 and by the
stockholders  of the  Company on July 29,  1999.  The  purpose of the 1999 Stock
Option Plan is to create  additional  incentives  for the  Company's  employees,
directors  and  others  who  perform  substantial  services  to the  Company  by
providing an opportunity to purchase  shares of the Common Stock pursuant to the
exercise of options  granted  under the 1999 Stock Option Plan.  The Company may
grant  options that qualify as incentive  stock options under Section 422 of the
Code, and non-qualified stock options. Incentive stock options may be granted to
employees  (including  officers and directors who are employees).  Non-qualified
stock  options may be granted to  employees,  officers,  directors,  independent
contractors and consultants of the Company. As of May 31, 2000, 2,000,000 shares
were  reserved  for  issuance  under the 1999 Stock  Option  Plan and  1,130,000
options  had been  granted  at an  exercise  price of $7.00 per  share,  375,000
options  had been  granted  at an  exercise  price of $7.05 per  share,  100,000
options had been  granted at an  exercise  price of $8.625 per share and 200,000
options had been granted at an exercise price of $4.00 per share.  In June 2000,
the  1,130,000  options at an  exercise  price of $7.00 per share,  the  375,000
options at an exercise  price of $7.05 per share and the  100,000  options at an
exercise price of $8.625 per share were repriced to $4.00 per share.

        The  maximum  number of shares  that may be subject  to options  granted
under the 1999 Stock Option Plan to any  individual in any calendar year may not
exceed  800,000 and the method of  counting  such  shares  shall  conform to any
requirements applicable to "performance-based" compensation under Section 162(m)
of the Code. It is intended that  compensation  realized upon the exercise of an
option  granted  under the 1999 Stock Option Plan will  thereupon be regarded as
"performance-based"  under Section 162(m) of the Code and that such compensation
may be deductible without regard to the limits of Section 162(m) of the Code.

        The Board of Directors or the Compensation Committee thereof composed of
two or more  non-management  directors that are "non-employee  directors" within
the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended,  and "outside directors" within the meaning of Section 162(m) of the
Code, is  authorized  to administer  the 1999 Stock Option Plan in a manner that
complies with Rule 16b-3 under the Securities  Exchange Act of 1934, as amended.
The Board of Directors  or  Compensation  Committee  determines  which  eligible
individuals  are granted  options and the terms of such  options  including  the
exercise  price,  number of shares  subject to the option  and the  vesting  and
exercisability thereof;  provided, the maximum term of an incentive stock option
granted under the 1999 Stock Option Plan may not exceed five years.

        The exercise  price of an incentive  stock option granted under the 1999
Stock  Option  plan must  equal at least  100% of the fair  market  value of the
subject stock on the date of grant and the exercise  price of all  non-qualified
stock  options  must equal at least 80% of the fair market  value of the subject
stock on the date of grant; provided,  however, that if an option granted to the
Company's  Chief  Executive  Officer or to any of the Company's  other four most
highly  compensated  officers  is  intended  to qualify  as  "performance-based"
compensation  under Section 162(m) of the Code, the exercise price must equal at
least 100% of the fair market  value of the subject  stock on the date of grant.
With  respect to any  participant  who owns more than 10% of the voting power of
the Common Stock of the Company,  the exercise  price of any option granted must
equal at least 110% of the fair market value on the date of grant. The aggregate
fair market  value on the date of grant of the stock for which  incentive  stock
options are  exercisable for the first time by an employee of the Company during
any calendar year may not exceed $100,000.


                                      -31-

<PAGE>

        Options shall become  exercisable at such times and in such installments
as the Board of Directors or Compensation Committee shall provide. Non-qualified
and  incentive  stock  options  granted under the 1999 Stock Option Plan are not
transferable other than by will or the laws of descent or distribution, and each
option that has not yet expired is exercisable only by the recipient during such
person's lifetime,  or for 12 months thereafter by the person or persons to whom
the option passes by will or the laws of descent or distribution. The 1999 Stock
Option  Plan may be  amended  at any time by the  Board of  Directors,  although
certain amendments require stockholder approval. The 1999 Stock Option Plan will
terminate on April 8, 2009, unless earlier terminated by the Board of Directors.

Option Grants During Fiscal Year Ended March 31, 2000

        The following table provides  information related to options to purchase
Common  Stock  granted to the CEO and the named  executive  officers  during the
fiscal year ended March 31, 2000. The Company  currently does not have any plans
providing for the grant of stock appreciation rights.

<TABLE>
<CAPTION>

                                                                                     Potential Realizable Value at
                                                                                     Assumed Rates of Stock Price
                                 Individual Grants                                      Appreciation for Option
--------------------------------------------------------------------------------    -------------------------------

                                     % of Total
                                      Options
                        Number of     Granted
                       Securities        to
                       Underlying    Employees      Exercise
                         Options     in Fiscal       Price
      Name             Granted (#)    Year        ($/Sh)(1)    Expiration Date     5%($)             10%($)
-------------------   ------------- ------------- ----------   ---------------   ----------        ----------

<S>                       <C>          <C>         <C>          <C>              <C>               <C>
James Leech               750,000      32%         $7.00        May 31, 2004     $1,450,475        $3,205,178
Michael Sheehan              -          0%         $   -                   -     $        -        $        -
Carl Stevens              250,000      11%         $7.00        November 18,     $  479,176        $1,058,853
                                                                        2004
</TABLE>

(1)     The exercise  price is equal to or greater than the fair market value of
        the Common  Stock on the date of grant.  The  options  were  granted for
        terms of five years.

(2)     The  potential   realizable   value  portion  of  the  foregoing   table
        illustrates  values that might be realized  upon exercise of the options
        immediately  prior  to  the  expiration  of  their  term,  assuming  the
        specified compounded rates of appreciation on the Company's Common Stock
        over the term of the  options.  These  numbers do not take into  account
        provisions of certain  options  providing for  termination of the option
        following termination of employment,  non-transferability or differences
        in vesting  periods.  Regardless of the theoretical  value of an option,
        its ultimate value will depend upon the market value of the Common Stock
        at a future  date,  and that value will  depend on a variety of factors,
        including  the overall  condition of the stock market and the  Company's
        results of operations and financial condition. There can be no assurance
        that the values reflected in this table will be achieved.

Fiscal Year End Option Values

        The following table provides information related to the number and value
of options held by the CEO and the named executive  officers at fiscal year end.
No options were exercised in the fiscal year ended March 31, 2000.

<TABLE>
<CAPTION>
                                                                                      Value of Unexercised In-the-
                        Shares                  Number of Securities Underlying       Money options at FY-End ($)
                       Acquired                  Unexercised Options at FY-End                    (1)
                         on          Value       -----------------------------        ----------------------------
Name                   Exercise     Realized     Exercisable   Unexercisable   Exercisable         Unexercisable
----                   --------     --------     -----------   -------------   -----------         -------------


<S>                       <C>          <C>          <C>           <C>          <C>                    <C>
James Leech               -            --           250,000       500,000      $-                     $ -
Michael Sheehan           -            --           350,000        --          $2,100,000             $ -
Carl Stevens              -            --            83,334       166,666      $-                     $ -
</TABLE>

                                      -32-

<PAGE>

(1)      Based on the closing price of a share of Common Stock on March 31, 2000
         of $7.00 as reported on the OTC Bulletin Board.

Employment Agreements

        James  Leech  is  employed  by the  Company  pursuant  to an  employment
agreement  dated as of August 5, 1999.  The agreement  provides that Mr. Leech's
employment  with the Company  shall  continue  unless it is terminated by either
party in accordance with the terms of the agreement.  The agreement provides for
an initial base salary of Cdn $330,000 (or $227,040 in U.S.  dollars as of March
31, 2000) per annum, a minimum bonus of Cdn $30,000 (or $20,640 in U.S.  dollars
as of March 31, 2000) for the period  ending March 31, 2000 and a minimum  bonus
of Cdn  $50,000  (or  $34,400  in U.S.  dollars  as of March 31,  2000) for each
twelve-month  period  thereafter  during the term of the agreement.  Mr. Leech's
salary shall be annually  reviewed and may be increased at the discretion of the
Board of Directors.

        The agreement  also provides that if Mr. Leech is terminated  other than
for "cause," he shall  receive the base salary  provided for under the agreement
through  the date of  termination,  plus a lump sum  payment  equal to twice his
annual base salary and bonus.  He will also receive his accrued bonus,  continue
to  participate  in  certain  benefit  plans  for the 24 months  following  such
termination  and any options issued to Mr. Leech will  immediately  vest. If Mr.
Leech's  employment is terminated due to death or "disability," he shall be paid
the base salary under the agreement  until the date of termination and receive a
pro rata payment for all bonuses  (calculated  as the greater of the bonus which
would be paid under the Company's  bonus plan on the basis that targets were met
and 50% of Mr. Leech's base salary),  as well as any benefits  accrued until the
date of termination and any options issued to Mr. Leech will  immediately  vest.
"Cause" is defined as a wilful  refusal on the part of Mr.  Leech to perform the
services  required  of  him  under  the  agreement  (including  the  wilful  and
intentional  withholding  of  services  thereunder),  any breach of Mr.  Leech's
fiduciary  duties to the Company  likely to cause  material harm to the Company,
fraud  or any  conviction  for a  felony  or  indictable  offense  or any  crime
involving  moral  turpitude or any of theft or  dishonesty  relating to a matter
material to the Company,  provided that a wilful refusal to perform the services
required  under the agreement will  constitute  cause only if Mr. Leech fails to
terminate  the relevant  actions or cure the relevant  failure to act and remedy
any harm  therefrom  within 10 business days after receipt of written  notice of
such  wrongful  act,  failure to act or harm from the Company.  "Disability"  is
defined as the eligibility of Mr. Leech for long term disability  benefits under
the disability insurance provided by the Company.

        In the event Mr.  Leech is  terminated  within 24 months of a "change of
control" of the Company,  Mr. Leech shall receive a payment equal to three times
his annual  base  salary and bonus.  He will also  receive  his  accrued  bonus,
continue to  participate in certain  benefit plans for 36 months  following such
termination and any options issued to Mr. Leech will immediately  vest.  "Change
of control" is defined as (i) the direct or indirect  sale,  lease,  exchange or
other  transfer of all or  substantially  all (50% or more) of the assets of the
Company to any person or entity or group of persons or entities  acting  jointly
or in concert as a partnership  or other group (a "Group of Persons");  (ii) the
merger,  consolidation or other business combination of the Company with or into
another  corporation  with the  effect  that  the  shareholders  of the  Company
immediately  following the merger,  consolidation or other business combination,
hold 50% or less of the combined voting power of the then outstanding securities
of the surviving  corporation  of such merger,  consolidation  or other business
combination   ordinarily   (and  apart  from  rights   accruing   under  special
circumstances) having the right to vote in the election of directors;  (iii) the
replacement  of a majority  of the Board of  Directors  of the Company or of any
committee of the Board of Directors of the Company in any given year as compared
to the directors who  constituted  the Board of Directors of the Company or such
committee at the  beginning of such year,  and such  replacement  shall not have
been  approved by the Board of Directors of the Company,  as the case may be, as
constituted  at the  beginning  of such year;  (iv) a person or Group of Persons
shall,  as a result  of a tender  or  exchange  offer,  open  market  purchases,
privately  negotiated  purchases,   merger,   consolidation  or  other  business
combination,  or otherwise, have become the beneficial owner (within the meaning
of Rule  13d-3  under  the  Securities  Exchange  Act of 1934,  as  amended)  of
securities of the Company  representing 20% or more of the combined voting power
of the then outstanding


                                      -33-

<PAGE>

securities of such corporation  ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of directors; or
(v) the  voluntary  liquidation,  dissolution  or  winding-up  of the Company in
connection  with which a  distribution  is made to the holders of the  Company's
common shares.

        In addition,  on June 1, 1999, Mr. Leech was granted options to purchase
750,000  shares of Common  Stock at an exercise  price of $7.00 per share.  Such
options  were  repriced  in June  2000 to $4.00  per  share.  Such  options  are
currently  exercisable  as to 250,000  shares and  become  exercisable  as to an
additional  250,000 shares on September 4, 2000 and as to the remaining  250,000
shares on September 4, 2001.

        Herve  Seguin is  employed  by the  Company  pursuant  to an  employment
agreement dated as of December 6, 1999. The agreement provides that Mr. Seguin's
employment  with the Company  shall  continue  unless it is terminated by either
party in accordance with the terms of the agreement.  The agreement provides for
an initial base salary of Cdn $200,000 (or $137,600 in U.S.  dollars as of March
31,  2000)  per  annum as well as a bonus of not less  than 50% of Mr.  Seguin's
annual base salary.  Mr. Seguin's  salary shall be annually  reviewed and may be
increased at the discretion of the Board of Directors.

        The agreement also provides that if Mr. Seguin is terminated  other than
for "cause," he shall  receive the base salary  provided for under the agreement
through the date of  termination,  plus a lump sum  payment  equal to his annual
base salary. Further, any options issued to Mr. Seguin will immediately vest. If
Mr. Seguin's  employment is terminated due to death or "disability," he shall be
paid the base  salary  under the  agreement  until the date of  termination  and
receive a pro rata payment for all bonuses  (calculated  at 50% of Mr.  Seguin's
base  salary) and  incentive  plans to the date of  termination,  as well as any
benefits  accrued  until the date of  termination  and any rights  pursuant to a
share option plan governing  options  issued to Mr. Seguin,  which options shall
immediately accelerate and vest. "Cause" is defined as any act which constitutes
"cause" at law, any violation by Mr. Seguin of any material instructions,  rules
or  practices  of the Company,  a failure to comply with any  provisions  of his
employment  agreement  (including the withholding of services  thereunder),  any
breach of Mr. Seguin's  fiduciary  duties to the Company likely to cause harm to
the Company,  fraud or any conviction for a felony or indictable  offense or any
crime  involving  moral  turpitude or any of theft or  dishonesty  relating to a
matter  material to the Company.  "Disability"  is defined as the eligibility of
Mr. Seguin for long term  disability  benefits  under the  disability  insurance
provided by the Company.

         In the event Mr. Seguin is terminated  within 24 months of a "change of
control" of the Company,  Mr. Seguin shall  receive his base salary  through the
date of  termination  as well as a lump sum amount equal to 1.5 times his annual
base  salary.  Further,  any  options  issued  to Mr.  Seguin  will  immediately
accelerate  and vest.  "Change of control" is defined as (i) the  acquisition by
any person, entity or group of persons or entities acting jointly or in concert,
of voting  securities  of the  Company or rights or  options  to acquire  voting
securities of the Company or securities  convertible  into or  exchangeable  for
voting securities of the Company or any combination  thereof such that after the
completion of the acquisition such person,  entity or group would be entitled to
exercise  50.1% or more of the total  number of votes  entitled  to be cast at a
meeting of shareholders  of the Company;  or (ii) the sale by the Company of all
or  substantially  all of the  property  or  assets of the  Company;  or (iii) a
reorganization, plan of arrangement or merger resulting in the circumstances set
out in (i) or (ii) above.

         In addition,  on December 8, 1999,  Mr.  Seguin was granted  options to
purchase 350,000 shares of Common Stock at an exercise price of $7.05 per share.
Such  options  were  repriced in June 2000 to $4.00 per share.  Such options are
currently  exercisable  as to 116,667  shares and  become  exercisable  as to an
additional  116,667  shares on January 4, 2001 and as to the  remaining  116,666
shares on January 4, 2002.

Compensation of Directors

         The Company did not pay directors  fees to any of the directors  during
the fiscal year ended March 31, 2000.  All  directors are  reimbursed  for their
reasonable  out-of-pocket  expenses  incurred in connection with their duties to
the Company.


                                      -34-

<PAGE>

Item 12.   Security Ownership of Certain Beneficial Owners and Management

         The  following  table sets forth  information  as of May 26,  2000 with
respect to the beneficial  ownership of Common Stock by (i) each person known by
the  Company to own  beneficially  more than 5% of the Common  Stock,  (ii) each
executive  officer of the Company,  (iii) each  Director of the Company and (iv)
all Directors and executive officers as a group.

<TABLE>
<CAPTION>

 Name and Address of Beneficial                Number of Shares             Percentage
          Owner(1)                           Beneficially Owned             of Class(2)
-------------------------                    -------------------            ----------

<S>                                              <C>                         <C>
Darcy Galvon                                        617,910(3)                2.87%
A. Thomas Griffis                                 9,179,997(4)               42.68%
James Leech                                       9,205,000(5)               42.49%
Michael Sheehan                                   9,305,000(6)               42.77%
Richard Shannon                                     309,999(7)                1.44%
George Shafran                                    9,088,334(8)               42.25%
Alexander Walsh                                   9,155,000(9)               42.37%
Herve Seguin                                        116,667(10)                *
Jennifer Scoffield                                  116,667(11)                *
Carl Stevens                                         83,334(12)                *
Jeffrey Spindler                                     15,000(13)                *
Glen Allmendinger                                     8,334(14)                *
Treetop Capital Inc.                              8,955,000(15)              41.83%
   c/o Griffis International
   1 Richmond Street West,
   Suite 901, Toronto,
   Ontario M5H3W4
Don Jeffrey                                       9,880,749(16)              45.94%
All officers and                                 11,381,241                  50.54%
   directors as a group
   (12 persons)
</TABLE>

--------------
*        Less than one percent (1%) of outstanding Common Stock.

(1)      Except  as  otherwise  indicated,  the  address  for each of the  named
         individuals is c/o InfoCast Corporation,  1 Richmond Street West, Suite
         902, Toronto, Ontario, Canada M5H 3W4.

(2)      Except as otherwise  indicated,  the  stockholders  listed in the table
         have sole  voting and  investment  power with  respect to all shares of
         Common  Stock  beneficially  owned by them.  Pursuant  to the rules and
         regulations of


                                      -35-

<PAGE>

         the Securities and Exchange Commission,  shares of Common Stock that an
         individual  or group  has a right to  acquire  within  sixty  (60) days
         pursuant  to the  exercise  of  warrants  or  options  are deemed to be
         outstanding  for the purposes of computing the percentage  ownership of
         such individual or group,  but are not deemed to be outstanding for the
         purpose of computing the percentage ownership of any other person shown
         in the table.

(3)      Represents (i) 517,000 shares to be issued in exchange for  outstanding
         exchangeable shares of InfoCast Canada Corporation, (ii) 100,000 shares
         issuable upon exercise of options  granted to Mr. Galvon under the 1998
         Stock Option Plan and (iii) 910 shares held by Mr. Galvon's spouse.

(4)      Represents   (i)  124,997  shares  of  Common  Stock  held  by  Griffis
         International  Limited, of which Mr. Griffis, the Chairman of the Board
         of the Company,  owns 100%,  (ii) 100,000 shares issuable upon exercise
         of options  granted to Mr. Griffis under the 1998 Stock Option Plan and
         (iii)  8,955,000  shares held by Treetop Capital Inc.  ("Treetop"),  of
         which Griffis International  Limited is a shareholder.  Mr. Griffis and
         Griffis  International Limited have no control over Treetop or power to
         direct  Treetop's  voting or disposition of its interest in the Company
         other  than  with  respect  to  1,020,000   shares  of  which   Griffis
         International  Limited  is the  beneficial  owner.  Thus,  Mr.  Griffis
         disclaims  beneficial ownership with respect to 7,935,000 of the shares
         of the  Company's  Common  Stock owned by Treetop.  Treetop  expects to
         distribute  in the near  future the shares it holds in the Company on a
         pro rata basis to Treetop's shareholders.

(5)      Represents (i) 250,000 shares issuable upon exercise of options granted
         to Mr. Leech in June 1999 and (ii) 8,955,000  shares held by Treetop of
         which Mr.  Leech is an option  holder.  Mr.  Leech has no control  over
         Treetop  or power to  direct  Treetop's  voting or  disposition  of its
         interest in the Company  other than with  respect to 300,000  shares of
         which he is the beneficial owner. Thus, Mr. Leech disclaims  beneficial
         ownership  with  respect to  8,655,000  of the shares of the  Company's
         Common Stock owned by Treetop.  Treetop  expects to  distribute  in the
         near  future the shares it holds in the  Company on a pro rata basis to
         Treetop's shareholders.

(6)      Represents (i) 350,000 shares issuable upon exercise of options granted
         to Mr.  Sheehan  under the 1998 Stock  Option  Plan and (ii)  8,955,000
         shares  held by Treetop,  of which Mr.  Sheehan is a  shareholder.  Mr.
         Sheehan has no control over Treetop or power to direct Treetop's voting
         or  disposition  of its interest in the Company other than with respect
         to  175,000  shares  of which he is the  beneficial  owner.  Thus,  Mr.
         Sheehan disclaims beneficial ownership with respect to 8,780,000 of the
         shares of the Company's Common Stock owned by Treetop.  Treetop expects
         to  distribute in the near future the shares it holds in the Company on
         a pro rata basis to Treetop's shareholders.

(7)      Includes (i) 219,999  shares to be issued in exchange  for  outstanding
         shares of InfoCast Canada and (ii) 90,000 shares issuable upon exercise
         of options granted to Mr. Shannon under the 1999 Stock Option Plan.

(8)      Represents (i) 100,000 shares issuable upon exercise of options granted
         to Mr. Shafran under the 1998 Stock Option Plan,  (ii) 33,334 shares of
         Stock held by Mr. Shafran and (iii)  8,955,000  shares held by Treetop,
         of which Mr. Shafran is a shareholder.  Mr. Shafran has no control over
         Treetop  or power to  direct  Treetop's  voting or  disposition  of its
         interest in the Company  other than with  respect to 225,000  shares of
         which  he  is  the  beneficial  owner.   Thus,  Mr.  Shafran  disclaims
         beneficial  ownership  with  respect to  8,730,000 of the shares of the
         Company's Common Stock owned by Treetop.  Treetop expects to distribute
         in the near  future  the  shares it holds in the  Company on a pro rata
         basis to Treetop's shareholders.

(9)      Represents (i) 200,000 shares issuable upon exercise of options granted
         to Mr. Walsh under the 1999 Stock Option Plan and (ii) 8,955,000 shares
         held by Treetop, of which Mr. Walsh is a shareholder.  Mr. Walsh has no
         control over Treetop or power to direct Treetop's voting or disposition
         of its  interest  in the  Company  other  than with  respect to 300,000
         shares of which he is the beneficial  owner.  Thus, Mr. Walsh disclaims
         beneficial  ownership  with  respect to  8,655,000 of the shares of the
         Company's Common Stock owned by Treetop.


                                      -36-

<PAGE>

         Treetop expects to distribute in the near future the shares it holds in
         the Company on a pro rata basis to Treetop's shareholders.

(10)     Represents  116,667 shares issuable upon exercise of options granted to
         Mr. Seguin under the 1999 Stock Option Plan.

(11)     Represents  116,667 shares issuable upon exercise of options granted to
         Ms. Scoffield under the 1999 Stock Option Plan.

(12)     Represents  83,334 shares  issuable upon exercise of options granted to
         Mr. Stevens under the 1999 Stock Option Plan.

(13)     Includes 5,000 shares  issuable upon exercise of options granted to Mr.
         Spindler under the 1999 Stock Option Plan.

(14)     Represents  8,334 shares  issuable upon exercise of options  granted to
         Mr. Allmendinger under the 1999 Stock Option Plan.

(15)     Represents  shares to be distributed to its  shareholders on a pro rata
         basis in the near future.

(16)     Represents (i) 825,749 shares of Common Stock held by Mr. Jeffrey, (ii)
         100,000 shares issuable upon exercise of options granted to Mr. Jeffrey
         under the 1998 Stock Option Plan,  and (iii)  8,955,000  shares held by
         Treetop,  of  which  Mr.  Jeffrey  or  his  wholly-owned  company  is a
         shareholder. Mr. Jeffrey has no control over Treetop or power to direct
         Treetop's  voting or  disposition  of its interest in the Company other
         than with  respect to  1,103,680  shares of which he is the  beneficial
         owner. Thus, Mr. Jeffrey disclaims beneficial ownership with respect to
         7,851,320 of the shares of the Company's Common Stock owned by Treetop.
         Treetop expects to distribute in the near future the shares it holds in
         the Company on a pro rata basis to Treetop's shareholders.

Item 13.  Certain Relationships and Related Transactions

         During year ended March 31, 2000, the Company paid  consulting  fees to
A. Thomas Griffis,  the Co-Chairman of the Board of the Company, who is the sole
owner of  Griffis  International  Limited,  in the  amount of Cdn  $210,000  (or
$142,740 in U.S.  dollars as of March 31,  2000) and accrued an  additional  Cdn
$30,000  (or $20,392 in U.S.  dollars as of March 31,  2000) for  financial  and
management  consulting  services  rendered.  The Company will  continue to pay a
monthly  consulting  fee of Cdn $15,000 (or $10,195 in U.S.  dollars as of March
31, 2000) while services are being rendered.

         During the year ended March 31, 2000, the Company paid  consulting fees
to Don  Jeffrey,  a  shareholder  beneficially  owning  greater  than  5% of the
outstanding shares of the Company,  in the amount of Cdn $105,000 (or $71,370 in
U.S.  dollars as of March 31, 2000) for consulting  services related to business
development  and advice on potential  acquisitions,  including  introducing  the
Company to HomeBase Work Solutions Ltd. and identifying potential customers.

         During the year ended March 31, 2000, the Company paid  consulting fees
totaling  $120,000  and  accrued  an  additional  $40,000 to George  Shafran,  a
director of the Company, for consulting services related to business development
and advice on potential  acquisitions,  including  introducing the Company to an
acquisition   candidate  and  attending  numerous  sales  calls  with  potential
customers.  The  Company  will  continue to pay a monthly  consulting  fee while
services are being rendered.

         During  the year ended  March 31,  2000,  the  Company  paid  incentive
compensation fees to Darcy Galvon, its Co-Chairman of the Board, of Cdn $140,000
(or  $95,160  in U.S.  dollars  as of March  31,  2000) in  connection  with the
Company's  acquisition of HomeBase Work  Solutions.  During the year ended March
31, 2000 the Company paid consulting fees to 2Inc., a company owned 50% by Darcy
Galvon,  in the amount of Cdn.  $86,000 (or $58,456 in U.S.  dollars as of March
31, 2000) and accrued an additional  CDN $54,000 (or $36,705 in U.S.  dollars as
of March 31, 2000)

                                      -37-

<PAGE>

for consulting services rendered by Mr. Galvon. The Company will continue to pay
a monthly consulting fee while such services are being rendered.

         From  July 29,  1997 to March  31,  1999,  the  Company  received  cash
advances from View Media,  a company  controlled  by Don Jeffrey,  a shareholder
beneficially  owning  approximately  10.5%  of  the  outstanding  shares  of the
Company, totaling approximately $109,000. The Company repaid such advances prior
to June 30, 1999.

         Darcy Galvon, Co-Chairman of the Board of the Company, is a Director of
Facet  Petroleum  Solutions,  Inc.  Pursuant  to a  licensing  and  distribution
agreement  dated  March 30,  1999  between  HomeBase  Work  Solutions  and Facet
Petroleum  Solutions Inc.,  HomeBase Work Solutions acquired the exclusive right
in the telework market to distribute Facet Petroleum's Telework Operational Data
Store  software  for a period of two  years in  consideration  for 6,910  common
shares of HomeBase  valued at Cdn $200,678  (or  $139,000 in U.S.  dollars as of
December 31, 1999).  Facet  Petroleum  received 25,000 shares of Common Stock of
the Company in exchange for the 6,910 HomeBase Work Solutions shares as a result
of the acquisition of HomeBase Work Solutions by the Company on May 13, 1998.



                                      -38-

<PAGE>

                                     PART IV

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)      The following documents are filed as part of this Report:

         (1)      Financial Statements.

         See index to financial statements which appears on page F-1 herein.

         (2)      Exhibits.

         See exhibit index immediately following the signature page hereto.

(B)      Reports on Form 8-K filed in the fourth  quarter of the period  covered
         by this Report.

         (1)      Item 5 Current Report on Form 8-K dated February 23, 2000.





                                      -39-

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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.



                                        InfoCast Corporation

                                        By:  /s/ James Leech
                                             -----------------------------------
                                             James Leech,
                                             Chief Executive Officer (Principal
                                             Executive Officer)


                                        By:  /s/ Herve Seguin
                                             -----------------------------------
                                             Herve Seguin,
                                             Chief Financial Officer (Principal
                                             Financial Officer)

                                                  June 21, 2000
                                                  -------------
                                                       Date


                                POWER OF ATTORNEY

         Know  all men by these  presents,  that  each  person  whose  signature
appears below hereby  constitutes and appoints James Leech and Herve Seguin, and
each of them singly, his true and lawful  attorney-in-fact  and agent, with full
power of  substitution  and  resubstitution  for him and in his name,  place and
stead,  in any and all  capacities,  to sign any and all amendments to this Form
10-K and to file the  same,  with  exhibits  thereto,  and  other  documents  in
connection therewith, with the Securities and Exchange Commission, granting unto
said  attorney-in-fact and agent full power and authority to do and perform each
and every act and thing  requisite  and  necessary  to be done,  as fully to all
intents and  purposes as he might or could do in person,  hereby  ratifying  and
confirming all that said  attorney-in-fact and agent or either of them, or their
or his substitute or substitutes,  may lawfully do or cause to be done by virtue
hereof.

Date: June 21, 2000

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the registrant and in the capacities and on the date indicated.



By:  /s/ James Leech                                    June 21, 2000
-----------------------------------------------         -------------
James Leech, President, Chief Executive Officer         Date
and Director (Principal Executive Officer)



By: /s/ Herve Seguin                                    June 21, 2000
-----------------------------------------------         -------------
Herve Seguin, Chief Financial Officer                   Date
(Principal Financial Officer)



                                      -40-

<PAGE>


By:  /s/ A. Thomas Griffis                              June 21, 2000
-----------------------------------------------         -------------
A. Thomas Griffis, Co-Chairman of the Board             Date
 and Director



By:  /s/ Darcy Galvon                                   June 21, 2000
-----------------------------------------------         -------------
Darcy Galvon, Co-Chairman of the Board                  Date
and Director



By: /s/ Michael Sheehan                                 June 21, 2000
-----------------------------------------------         -------------
Michael Sheehan                                         Date
Executive Vice President, Virtual Call Center,
and  Director



By:  /s/ George Shafran                                 June 21, 2000
-----------------------------------------------         -------------
George Shafran                                          Date
Director



By:  /s/ Jeffrey S. Spindler                            June 21, 2000
-----------------------------------------------         -------------
Jeffrey S. Spindler                                     Date
Director



By:  /s/ Glen Allmendinger                              June 21, 2000
-----------------------------------------------         -------------
Glen Allmendinger                                       Date





                                      -41-

<PAGE>

                                  EXHIBIT INDEX

Exhibit No.                            Exhibit
-----------                            -------

    2.1      Agreement  and Plan of Merger  dated May 3, 2000 by and between the
             Company and i360 Inc.

    3.1      Articles of Incorporation, as amended, of the Company (Incorporated
             by reference to the  Company's  Registration  Statement on Form 10,
             File No. 0-27343).

    3.2      Amended  and  Restated  Bylaws  of  the  Company  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.1      Specimen Certificate of the Company's Common Stock (Incorporated by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.2      Form of 1998 Stock  Option  Plan  ("1998  Plan")  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.3      Form of  Option  Grant  Letter  under  1998 Plan  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.4      Form of 1999 Stock  Option  Plan  ("1999  Plan")  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.5      Form of  Option  Grant  Letter  under  1999 Plan  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.6      Option Agreement dated June 1, 1999, by and between the Company and
             James  William  Leech  (Incorporated  by reference to the Company's
             Registration Statement on Form 10, File No. 0-27343).

    4.7      Warrant to Purchase  50,000  shares of Common  Stock dated June 24,
             1999,  issued to Thomson  Kernaghan and Co. Ltd.  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.8      Warrant to Purchase  20,000  shares of Common  Stock dated June 24,
             1999,  issued to Thomson  Kernaghan and Co. Ltd.  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    4.9      Warrant to  Purchase  25,000  shares of Common  Stock dated May 31,
             1999 issued to the Poretz Group  (Incorporated  by reference to the
             Company's Registration Statement on Form 10, File No. 0-27343).

    4.10     Provisions   Attaching   to  Common   Shares  of  InfoCast   Canada
             Corporation   (Incorporated   by   reference   to   the   Company's
             Registration Statement on Form 10, File No. 0-27343).

    4.11     Exchange  Agreement  dated  as of May  13,  1999 by and  among  the
             Company, InfoCast Canada Corporation,  HomeBase Work Solutions Ltd.
             and the  Shareholders  (Incorporated  by reference to the Company's
             Registration Statement on Form 10, File No. 0-27343).

    4.12     Support  Agreement  dated  as of May  13,  1999  by and  among  the
             Company, InfoCast Canada Corporation, HomeBase Work Solutions Ltd.,
             and the  Shareholders  (Incorporated  by reference to the Company's
             Registration Statement on Form 10, File No. 0-27343).

                                      -42-

<PAGE>

    4.13     Warrant to Purchase  12,500 shares of Common Stock dated October 6,
             1999 issued to the Poretz Group  (Incorporated  by reference to the
             Company's Registration Statement on Form 10, File No. 0- 27343).

    4.14     Warrant to Purchase  12,500 shares of Common Stock dated January 1,
             2000 issued to The Ponetz Group  (Incorporated  by reference to the
             Company's  Quarterly  Report  on Form 10-Q for the  Fiscal  Quarter
             ended December 31, 1999).

    4.15     Warrant to Purchase  56,000  shares of Common Stock dated  February
             10, 2002 issued to The Cuttyhunk Fund Limited.

    4.16     Form  of  7%  Convertible   Subordinated   Debenture  issued  under
             Confidential Private Placement Memorandum dated June 1, 2000.

    4.17     Warrant to Purchase  200,000  shares of Common Stock dated April 7,
             2000 issued to SmallCaps Online Group LLC.

    10.1     Letter  Agreement  dated March 17, 1999,  from the Company to Sandy
             Walsh  (Incorporated  by  reference to the  Company's  Registration
             Statement on Form 10, File No. 0-27343).

    10.2     Employment  to Agreement  dated August 5, 1999,  by and between the
             Company and James William Leech  (Incorporated  by reference to the
             Company's Registration Statement on Form 10, File No. 0- 27343).

    10.3     Consulting  Agreement  dated  December 1, 1998,  by and between the
             Company and Three Hundred & Sixty Degrees,  Inc.  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    10.4     Consulting  Agreement  dated  March 22,  1999,  by and  between the
             Company and Thomson Kernaghan & Co. Ltd. (Incorporated by reference
             to the  Company's  Registration  Statement  on Form  10,  File  No.
             0-27343).

    10.5     Consulting  Agreement  dated  April 15,  1999,  by and  between the
             Company and  Michael  Baybak and  Company,  Inc.  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    10.6     Letter  Agreement  dated June 15, 1999,  by and between the Company
             and Lasso  Communications  Inc.  (Incorporated  by reference to the
             Company's Registration Statement on Form 10, File No. 0-27343).

    10.7     Advertising  Services  Agreement dated July 1, 1999, by and between
             the  Company  and  Lasso   Communications  Inc.   (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    10.8     Release  dated  July 14,  1999,  by and  among the  Company,  Lasso
             Communications Inc., James Hines and Michael Gruber.  (Incorporated
             by reference to the  Company's  Registration  Statement on Form 10,
             File No. 0-27343).

    10.9     Memorandum of Understanding  dated June 7, 1999, by and between the
             Company and Willow CSN. (Incorporated by reference to the Company's
             Registration Statement on Form 10, File No. 0-27343).


                                      -43-

<PAGE>

    10.10    Summary  of Terms  and  Conditions  dated  April 21,  1999,  by and
             between the Company and CosmoCom,  Inc.  (Incorporated by reference
             to the  Company's  Registration  Statement  on Form  10,  File  No.
             0-27343).

    10.11    Agreement of Purchase  and Sale dated as of November  17, 1998,  by
             and  between  Advanced  Systems  Computer  Consultants,   Inc.  and
             Cheltenham  Technologies  (Bermuda)  Corporation  (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    10.12    Asset Sale Agreement  dated as of November 23, 1998, by and between
             Grant Reserve Corporation and Cherokee Mining Company (Incorporated
             by reference to the  Company's  Registration  Statement on Form 10,
             File No. 0-27343).

    10.13    Pledge  Agreement  dated as of November  25,  1998,  by and between
             Grant Reserve Corporation and Cherokee Mining Company (Incorporated
             by reference to the  Company's  Registration  Statement on Form 10,
             File No. 0-27343).

    10.14    Agreement  dated as of May 18, 1999, by and between the Company and
             Call Center Learning Solutions,  Inc. (Incorporated by reference to
             the Company's Registration Statement on Form 10, File No. 0-27343).

    10.15    Distribution  Agreement  dated as of March 12, 1999, by and between
             the Company and ITC Learning Corporation (Incorporated by reference
             to the  Company's  Registration  Statement  on Form  10,  File  No.
             0-27343).

    10.16    License  Agreement  dated June 29, 1999, by and between the Company
             and ITC  Learning  Corporation  (Incorporated  by  reference to the
             Company's Registration Statement on Form 10, File No. 0-27343).

    10.17    Letter  Agreement  dated March 24, 1999, by and between the Company
             and Applied Courseware Technology,  Inc. (Incorporated by reference
             to the  Company's  Registration  Statement  on Form  10,  File  No.
             0-27343).

    10.18    General  Security  Agreement  dated March 25, 1999,  by and between
             InfoCast Canada Corporation and Applied Courseware Technology, Inc.
             (Incorporated by reference to the Company's  Registration Statement
             on Form 10, File No. 0-27343).

    10.19    Memorandum of  Understanding  dated August 28, 1998, by and between
             Home Base Work Solutions Ltd. and Shaw Fiberlink Ltd. (Incorporated
             by reference to the  Company's  Registration  Statement on Form 10,
             File No. 0-27343).

    10.20    Licensing and  Distribution  Agreement  dated March 7, 1999, by and
             between  HomeBase Work Solutions  Ltd. and Facet Decision  Systems,
             Inc.  (Incorporated  by  reference  to the  Company's  Registration
             Statement on Form 10, File No. 0-27343).

    10.21    Licensing and  Distribution  Agreement dated March 30, 1999, by and
             between HomeBase Work Solutions Ltd. and Facet Petroleum Solutions,
             Inc.(Incorporated  by  reference  to  the  Company's   Registration
             Statement on Form 10, File No. 0-27343)

    10.22    Share Purchase Agreement dated as of May 13, 1999, by and among the
             Company, InfoCast Canada Corporation,  HomeBase Work Solutions Ltd.
             and the  Shareholders  named therein  (Incorporated by reference to
             the Company's Registration Statement on Form 10, File No. 0-27343).

                                      -44-

<PAGE>

    10.23    General  Security  Agreement  dated March 25, 1999,  by and between
             InfoCast  Canada  Corporation  and HomeBase  Work  Solutions,  Ltd.
             (Incorporated by reference to the Company's  Registration Statement
             on Form 10, File No. 0-27343)

    10.24    Letter  Agreement dated May 1999 (date  unspecified),  by and among
             the  Company  and  Darcy  Galvon,  Ken  MacLean  and  Sean  Fleming
             (Incorporated by reference to the Company's  Registration Statement
             on Form 10, File No. 0-27343).

    10.25    Master Lease Agreement dated June 25, 1998, by and between HomeBase
             Work  Solutions,   Ltd.  and  Sun  MicroSystems   (Incorporated  by
             reference to the Company's  Registration Statement on Form 10, File
             No. 0-27343).

    10.26    Memorandum of Agreement dated July 31, 1997, by and between Virtual
             Performance   Systems  Inc.   (Incorporated  by  reference  to  the
             Company's Registration Statement on Form 10, File No. 0-27343).

    10.27    Letter  Agreement  dated  November  27,  1998,  by and among  Grant
             Reserve  Corporation,  Sheridan  Reserve  Corporation  and  Virtual
             Performance   Systems  Inc.   (Incorporated  by  reference  to  the
             Company's Registration Statement on Form 10, File No. 0-27343).

    10.28    Share Purchase Agreement dated as of January 29, 1999, by and among
             InfoCast Canada Limited,  Virtual  Performance Systems Inc. and the
             Selling  Shareholders named therein.  (Incorporated by reference to
             the Company's Registration Statement on Form 10, File No. 0-27343.

    10.29    Letter Agreement dated May 18, 1999, by and between the Company and
             Satish   Kumeta   (Incorporated   by  reference  to  the  Company's
             Registration Statement on Form 10, File No. 0-27343).

    10.30    Letter of  Engagement  dated  October  21,  1999,  by and among the
             company,  N.M. Rothschild & Sons Canada Limited and N.M. Rothschild
             & Sons (Washington) LLC (Incorporated by reference to the Company's
             Registration Statement on Form 10, File No. 0-27343).

    10.31    Letter of  Understanding by and between the Company and AT&T Canada
             Long Distance  Services  Company  (Incorporated by reference to the
             Company's Registration Statement on Form 10, File No. 0-27343).

    10.32    Memorandum of Engagement dated December 10, 1998 by and between the
             Company and  College  Boreal  D'Arts  Appliques  et de  Technologie
             (Incorporated by reference to the Company's  Registration Statement
             on Form 10, File No. 0-27343)

    10.33    Assignment of Contract and  Assumption  of Liability  dated October
             19, 1999 by and between  the  Company and High  Performance  Group,
             Inc.  (Incorporated  by  reference  to the  Company's  Registration
             Statement on Form 10, File No. 0-27343).

    10.34    Employment  Agreement  dated  December  6, 1999 by and  between the
             Company  and  Herve  Seguin   (Incorporated  by  reference  to  the
             Company's Registration Statement on Form S-1 No. 333-94201).

    10.35    Employment  Agreement dated October 1, 1999 by and between InfoCast
             Canada Corporation and Christopher Rouse (Incorporated by reference
             to the Company's Registration Statement on Form S-1 No. 333-94201).

    10.36    Employment  Agreement  dated  September  1999  by and  between  the
             Company and Carl Steven (Incorporated by reference to the Company's
             Registration Statement on Form S-1 No. 333-94201).

                                      -45-

<PAGE>

    10.37    Strategic Alliance Agreement dated November 29, 1999 by between the
             Company  and  TManage,   Inc.(Incorporated   by  reference  to  the
             Company's Registration Statement on Form S-1 No. 333-94201).

    10.38    Service  Provider  Agreement  dated as of  December  9, 1999 by and
             between  the  Company  and  Sun   Microsystems   of  Canada,   Inc.
             (Incorporated  by reference to the  Company's  Quarterly  Report on
             Form 10-Q for the Fiscal Quarter ended December 31, 1999).

    10.39    Heads of  Agreement  dated  December  17,  1999 by and  between the
             Company and InfoCast (Australia) Limited (Incorporated by reference
             to the  Company's  Quarterly  Report  on Form  10-Q for the  Fiscal
             Quarter ended December 31, 1999).

    10.40    Minutes of  Settlement  Agreement  dated  January  7, 2000  between
             Applied Courseware Technology Inc., Gerard Costello, Faye Costello,
             Joseph  Costello,  InfoCast  Canada  Corporation  and  the  Company
             (Incorporated  by reference to the  Company's  Quarterly  Report on
             Form 10-Q for the Fiscal Quarter ended December 31, 1999).

    10.41    Full and  Final  Release  dated  January  6,  2000 by and among the
             Company,   InfoCast  Canada   Corporation   and  Stephen   Headford
             (Incorporated  by reference to the  Company's  Quarterly  Report on
             Form 10-Q for the Fiscal Quarter ended December 31, 1999).

    10.42    Release  dated  January 7, 2000 by and among the Company,  InfoCast
             Canada  Corporation,  Applied Courseware  Technology,  Inc., Gerard
             Costello,  Faye  Costello  and  Joseph  Costello  (Incorporated  by
             reference to the  Company's  Quarterly  Report on Form 10-Q for the
             Fiscal Quarter ended December 31, 1999).

    10.43    Release  dated  January 7, 2000 by and among the Company,  InfoCast
             Canada  Corporation,  Applied Courseware  Technology,  Inc., Gerard
             Costello,  Faye  Costello  and  Joseph  Costello  (Incorporated  by
             reference to the  Company's  Quarterly  Report on Form 10-Q for the
             Fiscal Quarter ended December 31, 1999).

    10.44    Termination  Agreement  dated July 29, 1999 between the Company and
             Cherokee  Mining  Company  Inc.  (Incorporated  by reference to the
             Company's  Quarterly  Report  on Form 10-Q for the  Fiscal  Quarter
             ended December 31, 1999).

    10.45    Assignment  of  Promissory  Note dated July 29, 1999 by and between
             the Company and Cherokee  Mining  Company,  Inc.  (Incorporated  by
             reference to the  Company's  Quarterly  Report on Form 10-Q for the
             Fiscal Quarter ended December 31, 1999).

    10.46    Agreement  dated  April 7,  2000 by and  between  the  Company  and
             SmallCaps Online Group LLC.

    16.1     Letter  from  Jackson  &  Rhodes,   P.C.   relating  to  change  of
             accountants,  dated September 3, 1999 (Incorporated by reference to
             the Company's Registration Statement on Form 10, File No. 0-27343).

    21.1     List of  Subsidiaries  (Incorporated  by reference to the Company's
             Registration Statement on Form 10, File No. 0-27343).

    24       Power of attorney (included on the signature page hereto).

    27.1     Financial Data Schedule.

                                      -46-

<PAGE>


                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Report.................................................F-2

Consolidated Balance Sheets as of March 31, 2000 and 1999....................F-3

Consolidated Statement of Operations and Comprehensive Loss for the year
     ended March 31, 2000 and the three months ended March 31, 1999 and 1998.F-4

Consolidated Statements of Cash Flows for the year ended March 31, 2000 and
     the three months ended March 31, 1999 and 1998..........................F-5

Consolidated Statements of Changes in Stockholders' Equity
     for the year ended March 31, 2000 and the three months
     ended March 31, 1999 and 1998...........................................F-7

Notes to Consolidated Financial Statements..................................F-11



                                       F-1

<PAGE>
                                AUDITORS' REPORT





To the Stockholders of
InfoCast Corporation

We  have  audited  the  consolidated  balance  sheets  of  InfoCast  Corporation
[formerly Virtual  Performance Systems Inc.] [a development stage company] as of
March 31,  2000 and March 31, 1999 and the related  consolidated  statements  of
operations  and  comprehensive  loss,  cash flows and  changes in  stockholders'
equity for the year ended March 31, 2000, the three month period ended March 31,
1999,  the year ended  December 31, 1998,  the 156 day period ended December 31,
1997 and the  period  from July 29,  1997 to March  31,  2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our  opinion,  based on our audits,  the  consolidated  financial  statements
referred to above  present  fairly,  in all  material  respects,  the  financial
position of InfoCast Corporation as at March 31, 2000 and March 31, 1999 and the
results of its  operations and its cash flows for the year ended March 31, 2000,
the three month period ended March 31, 1999,  the year ended  December 31, 1998,
the 156 day period ended  December 31, 1997 and the period from July 29, 1997 to
March 31, 2000 in conformity with accounting  principles  generally  accepted in
the United States.


/s/ Ernst & Young LLP

Toronto, Canada,
May 5, 2000.                                               Chartered Accountants


                                      F-2
<PAGE>



InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                           CONSOLIDATED BALANCE SHEETS
                            [U.S. dollars, U.S. GAAP]
<TABLE>
<CAPTION>

                                                                                      As of                   As of
                                                                                     March 31,                March 31,
                                                                                      2000                    1999
                                                                                        $                       $
-----------------------------------------------------------------------------------------------------------------------

ASSETS
Current
<S>                                                                               <C>                       <C>
Cash and cash equivalents                                                          3,637,931                3,092,445
Short-term equity investment [note 8]                                              3,900,000                       --
Accounts receivable                                                                  275,283                  258,244
Prepaid expenses and other [note 11]                                                 324,835                   21,404
-----------------------------------------------------------------------------------------------------------------------
Total current assets                                                               8,138,049                3,372,093
-----------------------------------------------------------------------------------------------------------------------
Deferred agency fee [note 9]                                                         604,583                       --
Capital assets, net [note 5]                                                       3,152,983                  107,392
Goodwill, net                                                                      4,812,380                       --
Distribution and licensing rights, net [note 4]                                    2,975,000                  500,000
Intellectual property, net [note 3]                                               14,886,486                   45,591
-----------------------------------------------------------------------------------------------------------------------
                                                                                  34,569,481                4,025,076
=======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities                                           1,814,538                  354,694
Current portion of obligations under capital leases [note 7]                         479,813                       --
Due to related parties [note 6]                                                       20,392                  177,270
-----------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                          2,314,743                  531,964
-----------------------------------------------------------------------------------------------------------------------
Long-term
Convertible debentures [note 9]                                                    3,500,000                       --
Obligations under capital leases [note 7]                                            802,836                       --
Deferred income taxes                                                              5,656,895                       --
-----------------------------------------------------------------------------------------------------------------------
Total long-term liabilities                                                        9,959,731                        --
-----------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                 12,274,474                  531,964
-----------------------------------------------------------------------------------------------------------------------

Stockholders' equity
Common stock
   [100,000,000 authorized and 24,571,336 issued and outstanding at
   March 31, 2000, 18,172,333 at March 31, 1999]                                      23,071                   16,672
Additional paid-in capital                                                        57,933,723               16,925,017
Deferred compensation                                                             (1,677,491)              (9,858,932)
Warrants                                                                           1,007,875                       --
Accumulated other comprehensive income (loss)                                       (237,033)                  14,309
Accumulated development stage deficit                                            (34,755,138)              (3,603,954)
----------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                        22,295,007                3,493,112
----------------------------------------------------------------------------------------------------------------------
                                                                                  34,569,481                4,025,076
======================================================================================================================
</TABLE>

See accompanying notes


                                      F-3
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                            [U.S. dollars, U.S. GAAP]
<TABLE>
<CAPTION>

                                                                                                    Three months      Three months
                                                                                Year ended              ended             ended
                                                                                 March 31,            March 31,         March 31,
                                                                                   2000                 1999              1998
                                                                                     $                    $                 $
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       [unaudited]

<S>                                                                                <C>                                    <C>
REVENUE                                                                            305,754                   --           43,446

EXPENSES
General, administrative and selling, excluding stock option compensation         7,391,128              635,334           42,494
Stock option compensation [note 8]                                              13,351,908            2,256,938               --
Research and development, excluding stock option compensation                    5,186,265              162,914           19,703
Interest and loan fees [note 9]                                                  1,913,482               23,562               --
Amortization                                                                     4,315,180                4,144               --
Depreciation                                                                       495,401                5,507              870
--------------------------------------------------------------------------------------------------------------------------------
                                                                                32,653,364            3,088,399           63,067
--------------------------------------------------------------------------------------------------------------------------------
Loss from operations before the following                                      (32,347,610)          (3,088,399)         (19,621)
Interest income                                                                    132,057                4,478               --
--------------------------------------------------------------------------------------------------------------------------------
Equity in loss of joint venture [note 12]                                         (164,736)                  --               --
--------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes                                                       (32,380,289)          (3,083,921)         (19,621)
Deferred income taxes                                                           (1,229,105)                  --               --
--------------------------------------------------------------------------------------------------------------------------------
Net loss for the period                                                        (31,151,184)          (3,083,921)         (19,621)
Unrealized loss on short-term equity investment                                   (287,500)                  --               --
Translation adjustment                                                              36,158               (6,614)          (1,227)
--------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss for the period                                              (31,402,526)          (3,090,535)         (20,848)
--------------------------------------------------------------------------------------------------------------------------------

Weighted average number of shares outstanding                                   22,655,810           11,583,995               41
--------------------------------------------------------------------------------------------------------------------------------

Basic and diluted loss per share                                                    (1.37)               (0.27)          (478.56)
--------------------------------------------------------------------------------------------------------------------------------

Stock option compensation expense related to
General, administrative and selling                                              9,594,046            1,452,549               --
Research and development                                                         3,757,861              804,389               --
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                                                                                    Period from      Cumulative
                                                                                                   July 29, 1997        from
                                                                                Year ended         [inception] to    inception to
                                                                                December 31,         December 31,      March 31,
                                                                                    1998                 1997            2000
                                                                                      $                    $               $
----------------------------------------------------------------------------------------------------------------------------------

<S>                                                                               <C>                     <C>              <C>
REVENUE                                                                           43,446                  3,508            352,708

EXPENSES
General, administrative and selling, excluding stock option compensation         375,302                 47,954          8,449,718
Stock option compensation [note 8]                                                    --                     --         15,608,846
Research and development, excluding stock option compensation                     88,180                 51,257          5,488,616
Interest and loan fees [note 9]                                                       --                     --          1,937,044
Amortization                                                                          --                     --          4,319,324
Depreciation                                                                       3,836                    458            505,202
----------------------------------------------------------------------------------------------------------------------------------
                                                                                 467,318                 99,669         36,308,750
----------------------------------------------------------------------------------------------------------------------------------
Loss from operations before the following                                       (423,872)               (96,161)       (35,956,042)
Interest income                                                                       --                     --            136,535
----------------------------------------------------------------------------------------------------------------------------------
Equity in loss of joint venture [note 12]                                             --                     --           (164,736)
----------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes                                                        (423,872)               (96,161)       (35,984,243)
Deferred income taxes                                                                 --                     --         (1,229,105)
----------------------------------------------------------------------------------------------------------------------------------
Net loss for the period                                                         (423,872)               (96,161)       (34,755,138)
Unrealized loss on short-term equity investment                                       --                     --           (287,500)
Translation adjustment                                                            19,291                  1,632             50,467
----------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss for the period                                               (404,581)               (94,529)       (34,992,171)
==================================================================================================================================
Weighted average number of shares outstanding                                    768,301                     41          9,974,536
==================================================================================================================================
Basic and diluted loss per share                                                 (0.55)              (2,345.39)             (3.48)
==================================================================================================================================
Stock option compensation expense related to
General, administrative and selling                                                   --                     --         11,046,595
Research and development                                                              --                     --          4,562,250
==================================================================================================================================
</TABLE>

See accompanying notes

                                      F-4
<PAGE>

InfoCast Corporation
[formerly Virtual Performance Systems Inc.]  [a development stage company]

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            [U.S. dollars, U.S. GAAP]

<TABLE>
<CAPTION>

                                                                                                 Three months       Three months
                                                                               Year ended             ended              ended
                                                                                March 31,           March 31,          March 31,
                                                                                  2000                1999               1998
                                                                                    $                   $                  $
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      [unaudited]

OPERATING ACTIVITIES
<S>                                                                            <C>                  <C>                  <C>
Net loss for the period                                                        (31,151,184)         (3,083,921)          (19,621)
Add (deduct) items not affecting cash
   Stock option compensation                                                    13,351,908           2,256,938                --
   Common stock issued for services                                                439,820              10,180                --
   Warrants issued for services                                                    781,075                  --                --
   Common stock issued to Applied Courseware Technology (A.C.T) Inc.             1,337,500                  --                --
   Write-off of in-process research and development                                 19,000                  --                --
   Write-off of Applied Courseware Technology (A.C.T.) Inc. loan                    98,685                  --                --
   Non-cash interest expense                                                     1,913,482                  --                --
   Equity in loss of joint venture                                                 164,736                  --                --
   Deferred income taxes                                                        (1,229,105)                 --                --
   Amortization                                                                  4,315,180               4,144                --
   Depreciation                                                                    495,401               5,507               870
--------------------------------------------------------------------------------------------------------------------------------
                                                                                (9,463,502)           (807,152)          (18,751)
Changes in non-cash working capital balances
   Accounts receivable                                                            (197,371)             (9,723)          (19,501)
   Prepaid expenses and other                                                     (301,964)             (6,179)              (61)
   Bank overdraft                                                                       --                  --             9,263
   Accounts payable and accrued liabilities                                      1,298,048             173,306            10,999
   Due from InfoCast [the acquired entity] prior to acquisition                         --                  --                --
--------------------------------------------------------------------------------------------------------------------------------
Cash used in operating activities                                               (8,664,789)           (649,748)          (18,051)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

                                                                                                     Period from      Cumulative
                                                                                                    July 29, 1997       from
                                                                              Year ended            [inception] to    inception to
                                                                             December 31,            December 31,      March 31,
                                                                                 1998                    1997            2000
                                                                                   $                       $               $
-----------------------------------------------------------------------------------------------------------------------------------


OPERATING ACTIVITIES
<S>                                                                             <C>                  <C>              <C>
Net loss for the period                                                         (423,872)            (96,161)         (34,755,138)
Add (deduct) items not affecting cash
   Stock option compensation                                                          --                  --           15,608,846
   Common stock issued for services                                                   --                  --              450,000
   Warrants issued for services                                                       --                  --              781,075
   Common stock issued to Applied Courseware Technology (A.C.T) Inc.                  --                  --            1,337,500
   Write-off in-process research and development                                      --                  --               19,000
   Write-off Applied Courseware Technology (A.C.T.) Inc. loan                         --                  --               98,685
   Non-cash interest expense                                                          --                  --            1,913,482
   Equity in loss of joint venture                                                    --                  --              164,736
   Deferred income taxes                                                              --                  --           (1,229,105)
   Amortization                                                                       --                  --            4,319,324
   Depreciation                                                                    3,836                 458              505,202
----------------------------------------------------------------------------------------------------------------------------------
                                                                                (420,036)            (95,703)         (10,786,393)
Changes in non-cash working capital balances
   Accounts receivable                                                             6,593             (16,286)            (216,787)
   Prepaid expenses and other                                                    (15,187)                (38)            (323,368)
   Bank overdraft                                                                     --                  --                   --
   Accounts payable and accrued liabilities                                      103,591              13,518            1,588,463
   Due from InfoCast [the acquired entity] prior to acquisition                  (25,020)                 --              (25,020)
----------------------------------------------------------------------------------------------------------------------------------
Cash used in operating activities                                               (350,059)            (98,509)          (9,763,105)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-5
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.]  [a development stage company]

                  CONSOLIDATED STATEMENTS OF CASH FLOWS cont'd
                            [U.S. dollars, U.S. GAAP]
<TABLE>
<CAPTION>

                                                                                                        Three months    Three months
                                                                                   Year ended                 ended         ended
                                                                                   March 31,               March 31,      March 31,
                                                                                     2000                    1999          1998
                                                                                      $                        $             $
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       [unaudited]
INVESTING ACTIVITIES
<S>                                                                                <C>                     <C>              <C>
Purchase of capital assets                                                         (2,024,070)             (93,659)         (325)
Distribution rights                                                                (2,475,000)            (500,000)           --
Due from Homebase Work Solutions Ltd.                                                     --               (99,529)           --
Acquisition of Homebase Work Solutions Ltd.                                            50,667                   --            --
Investment in joint venture                                                          (171,720)                  --            --
Due from Applied Courseware Technology (A.C.T.) Inc.                                       --             (139,299)           --
Acquisition of InfoCast Corporation                                                        --                   87            --
------------------------------------------------------------------------------------------------------------------------------------
Cash used in investing activities                                                  (4,620,123)            (832,400)         (325)
------------------------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Increase in note payable to InfoCast [the acquired entity]                                 --                   --            --
Increase (decrease)  in due to related parties                                       (177,270)             (95,755)       19,346
Repayment of capital lease obligations                                               (213,808)                  --            --
Receipt of short-term unsecured loan                                                       --              400,000            --
Payment of short-term unsecured loan                                                       --             (400,000)           --
Cash advance from InfoCast [the acquired entity] prior to acquisition                      --              146,900            --
Cash proceeds from convertible debentures, net                                      3,225,000                   --            --
Cash proceeds from issuance of share capital , net                                 10,970,537            4,505,508            --
------------------------------------------------------------------------------------------------------------------------------------
Cash provided by financing activities                                              13,804,459            4,556,653        19,346
------------------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash during the period                                     519,547            3,074,505           970
Effects of foreign exchange rate changes on cash balances                              25,939               (7,655)       (1,271)
Cash and cash equivalents, beginning of period                                      3,092,445               25,595           301
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                                            3,637,931            3,092,445            --
====================================================================================================================================

Supplemental cash flow information
Interest and lending fees paid during the period                                           --               23,562            --
Capital lease obligation assumed during the period                                  1,496,466                   --            --
Fair value of acquisitions acquired through share issuances during the period      17,000,000              307,688            --
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                                                                    Period from          Cumulative
                                                                                                    July 29, 1997            from
                                                                                  Year ended        [inception] to      inception to
                                                                                 December 31,        December 31,         March 31,
                                                                                     1998                1997               2000
                                                                                       $                   $                  $
----------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
<S>                                                                                 <C>             <C>                <C>
Purchase of capital assets                                                          (11,644)        (12,412)           (2,141,785)
Distribution rights                                                                      --              --            (2,975,000)
Due from Homebase Work Solutions Ltd.                                                    --              --               (99,529)
Acquisition of Homebase Work Solutions Ltd.                                              --              --                50,667
Investment in joint venture                                                              --              --              (171,720)
Due from Applied Courseware Technology (A.C.T.) Inc.                                     --              --              (139,299)
Acquisition of InfoCast Corporation                                                      --              --                    87
----------------------------------------------------------------------------------------------------------------------------------
Cash used in investing activities                                                   (11,644)        (12,412)           (5,476,579)
----------------------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Increase in note payable to InfoCast [the acquired entity]                          250,000              --               250,000
Increase (decrease)  in due to related parties                                      114,476         109,545               (49,004)
Repayment of capital lease obligations                                                   --              --              (213,808)
Receipt of short-term unsecured loan                                                 70,000              --               470,000
Payment of short-term unsecured loan                                                (70,000)             --              (470,000)
Cash advance from InfoCast [the acquired entity] prior to acquisition                    --              --               146,900
Cash proceeds from convertible debentures, net                                           --              --             3,225,000
Cash proceeds from issuance of share capital , net                                    2,373              45            15,478,463
---------------------------------------------------------------------------------------------------------------------------------
Cash provided by financing activities                                               366,849         109,590            18,837,551
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash during the period                                     5,146          (1,331)            3,597,867
Effects of foreign exchange rate changes on cash balances                            20,148           1,632                40,064
Cash and cash equivalents, beginning of period                                          301             --                     --
---------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                                             25,595             301             3,637,931
=================================================================================================================================
Supplemental cash flow information
Interest and lending fees paid during the period                                         --              --                23,562
Capital lease obligation assumed during the period                                       --              --             1,496,466
Fair value of acquisitions acquired through share issuances during the period            --              --            17,307,688
=================================================================================================================================
</TABLE>

See accompanying notes

                                      F-6
<PAGE>

InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                      CONSOLIDATED STATEMENTS OF CHANGES IN
                              STOCKHOLDERS' EQUITY
                            [U.S. dollars, U.S. GAAP]
<TABLE>
<CAPTION>

                                                                 Common stock         Additional
                                                Common            issued and            paid-in             Deferred
                                                shares            outstanding           capital           compensation
                                                   #                   $                   $                   $
----------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                       <C>             <C>                <C>
Deemed common shares issued for
   intellectual properties [note 1]                14                    --                  25                 --
Deemed common shares issued
   for cash [note 1]                               27                    --                  45                 --
Net loss for the period                            --                    --                  --                 --
Translation adjustment                             --                    --                  --                 --
------------------------------------------------------------------------------------------------------------------
Deemed balance as of
   December 31, 1997                               41                    --                  70                 --
Deemed common shares issued
   for cash [note 1]                        1,499,959                    --               2,373                 --
Net loss for the period                            --                    --                  --                 --
Translation adjustment                             --                    --                  --                 --
------------------------------------------------------------------------------------------------------------------
Deemed balance as of
   December 31, 1998                        1,500,000                    --               2,443                 --
Acquisition of InfoCast by
   VPS [note 1]                            13,580,000                13,580             294,108                 --
Common shares issued for cash               3,032,336                 3,032           4,545,468                 --
Share issuance costs                               --                    --             (42,992)                --
Common shares issued for
   consulting services                         60,000                    60             337,740           (337,800)
Granting of stock options                          --                    --          11,788,250        (11,788,250)
Amortization of deferred
   compensation                                    --                    --                  --          2,267,118
Net loss for the period                            --                    --                  --                 --
Translation adjustment                             --                    --                  --                 --
------------------------------------------------------------------------------------------------------------------
Balance as of March 31, 1999               18,172,336                16,672          16,925,017         (9,858,932)
==================================================================================================================
</TABLE>

See accompanying notes

                                      F-7
<PAGE>

InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                      CONSOLIDATED STATEMENTS OF CHANGES IN
                           STOCKHOLDERS' EQUITY cont'd
                            [U.S. dollars, U.S. GAAP]
<TABLE>
<CAPTION>

                                                                        Accumulated
                                                                           other                Accumulated              Total
                                                                       comprehensive            development            stockholders'
                                                    Warrants               loss                stage deficit            equity
                                                        $                    $                       $                     $
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                   <C>                  <C>                  <C>
Deemed common shares issued for
   intellectual properties [note 1]                    --                        --                       --                  25
Deemed common shares issued
   for cash [note 1]                                   --                        --                       --                  45
Net loss for the period                                --                        --                  (96,161)            (96,161)
Translation adjustment                                 --                     1,632                       --               1,632
--------------------------------------------------------------------------------------------------------------------------------
Deemed balance as of
   December 31, 1997                                   --                     1,632                  (96,161)            (94,459)
Deemed common shares issued
   for cash [note 1]                                   --                        --                       --               2,373
Net loss for the period                                --                        --                 (423,872)           (423,872)
Translation adjustment                                 --                    19,291                       --              19,291
---------------------------------------------------------------------------------------------------------------------------------
Deemed balance as of
   December 31, 1998                                   --                    20,923                 (520,033)           (496,667)
Acquisition of InfoCast by
   VPS [note 1]                                        --                        --                       --             307,688
Common shares issued for cash                          --                        --                       --           4,548,500
Share issuance costs                                   --                        --                       --             (42,992)
Common shares issued for
   consulting services                                 --                        --                       --                  --
Granting of stock options                              --                        --                       --                  --
Amortization of deferred
   compensation                                        --                        --                       --           2,267,118
Net loss for the period                                --                        --               (3,083,921)         (3,083,921)
Translation adjustment                                 --                    (6,614)                      --              (6,614)
---------------------------------------------------------------------------------------------------------------------------------
Balance as of March 31, 1999                           --                    14,309               (3,603,954)          3,493,112
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes

                                      F-8
<PAGE>

InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                       CONSOLIDATED STATEMENTS OF CHANGES
                         IN STOCKHOLDERS' EQUITY cont'd
                            [U.S. dollars, U.S. GAAP]
<TABLE>
<CAPTION>

                                                                           Common stock            Additional
                                                         Common             issued and               paid-in           Deferred
                                                         shares             outstanding              capital          compensation
                                                            #                    $                      $                  $
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                        <C>            <C>                 <C>
Balance as of March 31, 1999                            18,172,336                 16,672         16,925,017          (9,858,932)
Deemed common shares issued for
  acquisition of Homebase Work
  Solutions Ltd.                                         3,400,000                  3,400         16,996,600                 --
Common shares issued for cash and
  marketable securities                                  2,999,000                  2,999         17,956,501                 --
Share issuance costs - cash                                     --                     --         (1,563,963)                --
Share issuance costs - warrants                                 --                     --           (226,800)                --
Issuance of convertible debentures with warrants                --                     --          2,243,065                 --
Warrants issued for consulting services                         --                     --                 --                 --
Warrants issued to stockholders                                 --                     --                 --                 --
Adjustments resulting from revaluation
  of stock options granted to
  consultants in previous periods                               --                     --            963,557                 --
Adjustments resulting from revaluation
   of common shares granted to
   consultants in previous periods                              --                     --            112,200                 --
Adjustment to joint venture investment
   to reflect dilution of ownership interest                    --                     --             (6,984)                --
Granting of stock options                                       --                     --          4,803,780                 --
Cancellation of stock options                                   --                     --           (269,250)                --
Amortization of deferred compensation                           --                     --                 --          8,181,441
Net loss for the period                                         --                     --                 --                 --
Unrealized loss on short-term equity investment                 --                     --                 --                 --
Translation adjustment                                          --                     --                 --                 --
--------------------------------------------------------------------------------------------------------------------------------
Balance as of March 31, 2000                            24,571,336                 23,071         57,933,723         (1,677,491)
================================================================================================================================
</TABLE>


                                      F-9
<PAGE>

InfoCast Corporation
[formerly Virtual Performance Systems Inc.]  [a development stage company]

                      CONSOLIDATED STATEMENTS OF CHANGES IN
                           STOCKHOLDERS' EQUITY cont'd
                            [U.S. dollars, U.S. GAAP]
<TABLE>
<CAPTION>
                                                                            Accumulated
                                                                               other               Accumulated           Total
                                                                           comprehensive           development       stockholders'
                                                        Warrants               loss               stage deficit         equity
                                                            $                    $                      $                  $
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                     <C>             <C>                  <C>
Balance as of March 31, 1999                                --                 14,309         (3,603,954)              3,493,112
Deemed common shares issued for
   acquisition of Homebase Work
   Solutions Ltd.                                           --                     --                 --              17,000,000
Common shares issued for cash                               --                     --                 --              17,959,500
Share issuance costs - cash                                 --                     --                 --              (1,563,963)
Share issuance costs - warrants                        226,800                     --                 --                      --
Issuance of convertible debentures with warrants            --                     --                 --               2,243,065
Warrants issued for consulting services                643,875                     --                 --                 643,875
Warrants issued to stockholder                         137,200                     --                 --                 137,200
Adjustments resulting from revaluation
   of stock options granted to
   consultants in previous periods                          --                     --                 --                 963,557
Adjustments resulting from revaluation
   of common shares granted to
   consultants in previous periods                          --                     --                 --                 112,200
Adjustment to joint venture investment
   to reflect dilution of ownership interest                --                     --                 --                  (6,984)
Granting of stock options                                   --                     --                 --               4,803,780
Cancellation of stock options                               --                     --                 --                (269,250)
Amortization of deferred compensation                       --                     --                 --               8,181,441
Net loss for the period                                     --                     --        (31,151,184)            (31,151,184)
Unrealized loss on short-term equity investment             --               (287,500)                --                (287,500)
Translation adjustment                                      --                 36,158                 --                  36,158
---------------------------------------------------------------------------------------------------------------------------------
Balance as of March 31, 2000                             1,007,875               (237,033)       (34,755,138)         22,295,007
=================================================================================================================================
</TABLE>

The accumulated other comprehensive loss balance as of March 31, 2000 includes a
net  accumulated  translation  adjustment  gain of  $50,467  and an  accumulated
unrealized loss on short-term equity securities of $287,500.


                                      F-10
<PAGE>

InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000


1. BASIS OF ACCOUNTING

Nature of operations and continuing entity

These consolidated  financial statements are the continuing financial statements
of Virtual  Performance  Systems Inc. ["VPS"] [a development stage company],  an
Ontario  corporation  which was  incorporated  on July 29, 1997.  VPS had a 100%
interest  in,  and  subsequently   amalgamated  with,  Cheltenham   Technologies
Corporation,  an Ontario  corporation.  VPS has a 100%  interest  in  Cheltenham
Interactive  Corporation   ["Cheltenham   Interactive"],   an  inactive  Ontario
corporation,  and Cheltenham  Technologies  (Bermuda)  Corporation  ["Cheltenham
Bermuda"], a Barbados corporation which owns certain intellectual properties. On
January 29, 1999, VPS acquired the net assets of InfoCast Corporation  [formerly
Grant Reserve Corporation]  ["InfoCast"],  a United States non-operating company
traded on the NASDAQ OTC  Bulletin  Board which had a 100%  interest in InfoCast
Canada Corporation  ["InfoCast  Canada"].  After the acquisition,  VPS continued
under the name of InfoCast Corporation.

InfoCast,  InfoCast Canada, VPS,  Cheltenham  Interactive and Cheltenham Bermuda
are  collectively  referred to as the  "Company".  The Company is a  development
stage  technology  company that has developed the  infrastructure  to enable the
Company to host both their own customized and third-party software  applications
that can be accessed remotely by businesses and their employees.

The Company's primary operational focus as outlined in its business plan entails
significant  investment  in  developing,   deploying  and  marketing  electronic
commerce enabling application solutions.

The  aggregate  future  capital  requirements  to support  this  investment  are
expected to be substantially  funded from external  resources  including issuing
equity  and or  debt.  There  can be no  assurance  that any  financing  will be
available on terms acceptable to the Company or at all.

The Company believes that its working capital position as well as the additional
net convertible  debenture proceeds of $2,325,000 received in April 2000 will be
sufficient to support the  Company's  growth for  approximately  the next six to
nine months.  In the event that  additional  financings  are not  completed  and
expected  revenues  and cash  flows are not  achieved,  the  Company  intends to
curtail its  development  plans and reduce expense levels  significantly  at the
appropriate  time.  In such event the Company  believes  that its  current  cash
reserves will support limited activities until May 2001.

The Company is currently  seeking to raise  additional  funds through private or
public financing, strategic or other relationships.

The functional currency of VPS, Cheltenham  Interactive,  Cheltenham Bermuda and
InfoCast Canada is the Canadian dollar.  However,  for reporting  purposes,  the
Company  has  adopted  the  United  States  dollar  as its  reporting  currency.
Accordingly,  the Canadian  dollar balance  sheets of these  companies have been
translated into United States dollars at the rates of exchange at the respective
period ends,  while  transactions  during the periods and share capital  amounts
have  been  translated  at the  weighted  average  rates  of  exchange  for  the
respective  periods  and  the  exchange  rate  at the  date  of the  transaction
respectively.  Gains and losses arising from these  translation  adjustments are
included in comprehensive loss.

                                      F-11
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000

Reverse acquisition of InfoCast Corporation

Pursuant to a share purchase  agreement dated January 29, 1999, the shareholders
of VPS  sold  their  100%  interest  in VPS to  InfoCast  in  consideration  for
1,500,000  exchangeable shares of InfoCast Canada, a wholly-owned  subsidiary of
InfoCast.  The InfoCast Canada  exchangeable  shares are convertible into common
shares of InfoCast at no additional consideration. In addition, the shareholders
of VPS also  purchased  a further  9 million  common  shares  of  InfoCast  from
InfoCast's former controlling  shareholder,  Sheridan Reserve  Incorporated,  in
consideration  for a nominal cash amount. As a result of these two transactions,
the  shareholders  of VPS  effectively  acquired  10,500,000  common  shares  of
InfoCast  which  represents a  controlling  interest of  approximately  70% [60%
excluding  the   exchangeable   shares].   This  transaction  is  considered  an
acquisition  of InfoCast [the  accounting  subsidiary/legal  parent] by VPS [the
accounting parent/legal  subsidiary] and has been accounted for as a purchase of
the net assets of InfoCast  by VPS in these  consolidated  financial  statements
because  InfoCast had no business  operations or operating assets at the time of
the acquisition.

These consolidated  financial  statements are issued under the name of InfoCast,
but are a continuation of the financial  statements of the accounting  acquirer,
VPS. VPS's assets and  liabilities  are included in the  consolidated  financial
statements at their historical  carrying  amounts.  Figures presented to January
29, 1999 are those of VPS.  For purposes of the  acquisition,  the fair value of
the net assets of InfoCast of $307,688 is ascribed to the 13,580,000  previously
outstanding  common shares of InfoCast deemed to be issued in the acquisition as
follows:

                                                                          $
--------------------------------------------------------------------------------

Cash                                                                        87
Note receivable from VPS                                               396,900
Payable to VPS                                                         (25,020)
Accounts payable                                                       (64,279)
--------------------------------------------------------------------------------
Purchase price                                                         307,688
--------------------------------------------------------------------------------


                                      F-12
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000

Prior to the  acquisition  on January 29, 1999, the deemed number of outstanding
shares of InfoCast  is equal to the  1,500,000  exchangeable  shares of InfoCast
Canada that were issued to the  shareholders  of VPS in the  acquisition.  These
shares have been allocated to the changes in the combined issued and outstanding
and  additional  paid-in-capital  common  stock of VPS to  January  29,  1999 as
follows:
<TABLE>
<CAPTION>
                                                      Deemed
                                                     InfoCast           VPS
                                                      shares          shares       Amount
                                                        #               #             $
-----------------------------------------------------------------------------------------
<S>                                                <C>             <C>              <C>
Issued for intellectual properties [note 3]               14              35           25
Issued for cash                                           27              65           45
-----------------------------------------------------------------------------------------
Outstanding as of December 31, 1997                       41             100           70
Issued for cash                                    1,499,959       3,624,000        2,373
-----------------------------------------------------------------------------------------
Outstanding as of December 31, 1998
   and January 29, 1999 prior to acquisition       1,500,000       3,624,100        2,443
-----------------------------------------------------------------------------------------
</TABLE>

The combined issued and outstanding and additional  paid-in-capital common stock
of the  continuing  consolidated  entity as of January  29,  1999 is computed as
follows:
<TABLE>
<CAPTION>

                                                                                   $
--------------------------------------------------------------------------------------
<S>                                                                            <C>
Existing share capital of VPS as of January 29, 1999 prior to acquisition        2,443
Ascribed value of the acquired common shares of InfoCast                       307,688
--------------------------------------------------------------------------------------
Share capital of InfoCast [formerly VPS] as of January 29, 1999                310,131
--------------------------------------------------------------------------------------
</TABLE>

The number of  outstanding  shares of InfoCast  [formerly VPS] as of January 29,
1999 is computed as follows:
<TABLE>
<CAPTION>

                                                                                Number
                                                                             of shares
                                                                                  #
--------------------------------------------------------------------------------------
<S>                                                                         <C>
Deemed share capital of InfoCast [formerly VPS] as of
   January 29, 1999 prior to acquisition                                     1,500,000
Shares of InfoCast deemed issued by VPS                                     13,580,000
--------------------------------------------------------------------------------------
Shares of InfoCast [formerly VPS] as of January 29, 1999                    15,080,000
--------------------------------------------------------------------------------------
</TABLE>


                                      F-13
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000

Acquisition of Homebase Work Solutions Ltd.

Pursuant  to a share  purchase  agreement  dated  May 13,  1999,  Homebase  Work
Solutions Ltd.  ["Homebase"]  was acquired by the Company in  consideration  for
3,400,000   exchangeable   shares  of  InfoCast  Canada.   The  InfoCast  Canada
exchangeable  shares are convertible into InfoCast common stock on a one-for-one
basis at no additional consideration.

As a condition of the closing of the share purchase agreement,  the Company paid
$285,480  [Cdn.$420,000]  to officers  of Homebase  during the fiscal year ended
March 31, 2000.

The acquisition has been accounted for using the purchase  method.  The value of
the acquisition was  $17,077,000,  which included  $77,000 of expenses  directly
attributable to the acquisition. For accounting purposes the exchangeable shares
of InfoCast  Canada  have been valued at $5.00,  which is equal to the price per
share  received  from the June 1999 private  placement of the  Company's  common
stock. The total purchase price of $17,077,000 has been allocated as follows:

                                                                      $
--------------------------------------------------------------------------

Cash                                                              127,667
Other current assets                                               13,565
Capital assets                                                     20,465
Completed technology                                           17,015,000
In-process research and development                                19,000
Trademarks                                                        853,000
Workforce-in-place                                                253,000
Goodwill                                                        5,846,293
Deferred income taxes                                          (6,886,000)
Accounts payable and accrued liabilities                          (82,145)
Due to the Company                                               (102,845)
--------------------------------------------------------------------------
Purchase price                                                 17,077,000
--------------------------------------------------------------------------

The completed technology,  trademarks,  workforce-in-place  and goodwill will be
amortized over their respective  useful lives of 5 years, 5 years, 3 years and 5
years. The in-process research and development was charged to income immediately
subsequent  to  the  acquisition.  The  completed  technology,   trademarks  and
workforce-in-place   have  been  classified  as  intellectual  property  on  the
consolidated  balance  sheets.  The deferred income tax liability was created in
respect of the difference  between the accounting and tax basis of the completed
technology,  trademarks and workforce-in-place.  The identification and the fair
values  of  the  completed  technology,  in-process  research  and  development,
trademarks  and  workforce-in-place  were  determined  by  management  with  the
assistance of an independent valuator.

The completed  technology is comprised of Homebase's  information hub,  telework
and  web-enabling  technologies,   together  with  the  benefits  of  Homebase's
association with the National Environmental Policy Institute ["NEPI"]. NEPI is a
United  States  based  non-profit  environmental  lobbyist  group that  promotes
telework policies in the United States.

The results of operations of Homebase during the post-acquisition 324-day period
ended March 31, 2000 have been consolidated with those of the Company.

                                      F-14
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000

The following  pro-forma  consolidated  financial  information  presents certain
statement  of  operations  data of the Company as if the  Company  had  acquired
Homebase  as of April 1,  1998.  This  pro-forma  financial  information  is not
necessarily  indicative of the results that actually would have occurred had the
Company  acquired  Homebase on the date  indicated or which would be obtained in
the future.

                                        Year ended              Year ended
                                         March 31,               March 31,
                                           2000                    1999
                                             $                       $
--------------------------------------------------------------------------------
                                        [unaudited]               [unaudited]

Revenue                                     305,754                    5,153
Net loss for the period                 (31,622,119)              (7,253,830)
Basic and diluted loss per share              (1.37)                   (1.03)
--------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company's significant accounting policies are summarized as follows:

Principles of consolidation

These consolidated financial statements include the accounts of InfoCast and its
subsidiaries,   all  of  which  are  wholly-owned.   Intercompany  accounts  and
transactions have been eliminated upon consolidation.

Cash and cash equivalents

Cash and cash  equivalents  represent  cash and  short-term  investments  with a
maturity date of less than three months when acquired.


                                      F-15
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000



Change in year end

Effective for the period ended March 31, 1999, the Company  changed its year end
from December 31 to March 31.

Capital assets

Capital  assets are  recorded at cost less  accumulated  depreciation.  If it is
determined  that a capital asset is not  recoverable  over its estimated  useful
life, the capital asset will be written down to its fair value.  Maintenance and
repairs are charged to expenses as incurred. Gains and losses on the disposition
of capital  assets are included in income.  Depreciation  is provided  using the
following  annual rates and bases which are expected to amortize the cost of the
capital assets over their estimated useful lives:

Computer hardware and software         30% declining balance
Furniture and equipment                20% declining balance
Leasehold improvements                 20% declining balance
Virtual Call Center solution           5 years straight-line
Assets under capital lease             straight-line over the term of the lease

Intellectual property

Acquired  intellectual  property is recorded at cost and represents  proprietary
rights to certain information  delivery  technologies.  The capitalized costs of
the  intellectual  property  is  amortized  on a  straight-line  basis  over its
estimated  useful life. If it is determined  that an investment in  intellectual
property is not  recoverable  over its estimated  useful life, the  intellectual
property will be written down to its fair value.

Distribution and licensing rights

Acquired distribution and licensing rights are recorded at cost. The capitalized
costs of the  distribution  and licensing  rights will be amortized each period,
commencing when the electronically  converted products and educational  material
are available  for  distribution  and license,  at the greater of [i] the amount
calculated based on the straight-line method over the estimated useful life of 5
years or [ii] the amount calculated based on the ratio of current gross revenues
received from the  licensing of the  electronically  converted  products and the
hosting and  delivery of  educational  material  over the sum of the current and
future gross revenues anticipated to be received by licensing the electronically
converted products and hosting and delivering the educational material. If it is
determined  that the  investment in  distribution  and  licensing  rights is not
recoverable  from estimated sales, the distribution and licensing rights will be
written down to their fair value.

Goodwill

Goodwill is being  amortized over its estimated  useful life of five years.  The
Company  assesses  each  quarter  whether  there  is  an  other  than  temporary
impairment of the carrying value of the goodwill based on undiscounted  expected
future  cash  flows.  If  the  Company  determines  that  there  is a  permanent
impairment  of the carrying  value of the goodwill,  a write-down  will occur in
that period.


                                      F-16
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000

Revenue recognition

The Company generated revenue from hosting services, consulting services and the
resale of computer  hardware.  Revenue from hosting  services is recognized when
the service is delivered,  or over the term of the applicable  hosting  services
contract.  Consulting revenue is recognized at the time such consulting services
are  rendered.  Revenue  generated  from the  resale  of  computer  hardware  is
recognized upon shipment.

Research and development costs

Research and development costs are expensed in the year incurred.

Foreign currency measurement

In  preparing  the  Company's  Canadian  dollar  functional  currency  financial
statements,  United States dollar monetary assets and liabilities are remeasured
in the Company's  Canadian dollar functional  currency at the period end rate of
exchange.  The statements are then translated  into the Company's  United States
dollar  reporting  currency.  Transactions in foreign currency are remeasured at
the dollar actual rates of exchange.  Foreign currency remeasurement differences
are included in general and administrative expenses.

Stock options

As permitted by FASB Statement No. 123 ["FASB 123"], "Accounting for Stock-Based
Compensation",  the Company has adopted the  intrinsic  value  method of APB 25,
"Accounting  for Stock Issued to Employees" in respect of stock options  granted
to its employees and directors and FASB 123 in respect of stock options  granted
to its consultants.  The measurement date of options granted to consultants will
be the date the services are completed.  For purposes of recognition of the cost
of the options prior to the measurement  date such options are measured at their
then current fair value at each interim financial reporting date.


                                      F-17
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000


Income taxes

The Company  follows  the  liability  method of  providing  for income  taxes in
accordance with FASB Statement No. 109, "Accounting for Income Taxes".

Basic and diluted loss per common share

Per share amounts have been  computed  based on the weighted  average  number of
common shares  outstanding  each period.  The weighted  average number of common
shares outstanding prior to the acquisition on January 29, 1999 are based on the
number of VPS common  shares  outstanding  during that period.  Diluted loss per
share is  calculated  by  adjusting  outstanding  shares,  assuming any dilutive
effects of options, warrants and convertible securities.  For all of the periods
presented,  the effect of stock options,  warrants,  and convertible  securities
were not included as the results would be anti-dilutive.  Consequently, there is
no  difference  between the basic and dilutive net loss per share.  The weighted
average number potential of common shares from options, warrants and convertible
securities  for the year ended March 31, 2000 was 4,042,217  [three months ended
March 31, 1999 - 1,175,833;  three months ended March 31, 1998 - nil; year ended
December 31, 1998 - nil; 156 day period ended December 31, 1997 - nil].

Use of estimates

Management  uses estimates and assumptions in preparing  consolidated  financial
statements in accordance with accounting  principles  generally  accepted in the
United States.  Those estimates and assumptions  affect the reported  amounts of
assets and liabilities,  the disclosure of contingent assets and liabilities and
the reported amounts of revenue and expenses. Actual results could vary from the
estimates that are used.

3. INTELLECTUAL PROPERTY

The Company executed a Memorandum of Agreement dated July 31, 1997,  whereby the
Company  acquired  certain  intellectual  property  owned by an  officer  of the
Company,  in consideration  for 35 VPS common shares issued at Cdn.$1 per share.
The fair value of the  intellectual  property  is $23 based on the fair value of
the 35 VPS shares issued in consideration  thereof.  The fair value per share in
respect of the 35 VPS shares issued for the intellectual  property is consistent
with the cash proceeds  received per share in respect of the other 65 VPS common
shares issued during 1997. The intellectual  property purchased pursuant to this
agreement  is  completed  technology  and is related to  electronic  information
delivery  algorithms.  The  Company  is not using  this  electronic  information
delivery  algorithm and does not plan to use it in the future,  therefore,  this
intellectual  property  was written  down to nil during the year ended March 31,
2000.

On November 17,  1998,  the Company  entered into a Purchase and Sale  Agreement
with Advanced Systems Computer  Consultants Inc., a company owned by the officer
of the Company  noted  above,  pursuant to which the  Company  acquired  certain
additional  intellectual  property rights.  The intellectual  property purchased
pursuant to this agreement is completed technology and relates to remote banking
software.   The  Company   purchased  the   intellectual   property  rights  for
consideration as follows:


                                      F-18
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000

[i]   $51,601  [Cdn.$75,000] if the Company becomes a public corporation and has
      completed a minimum financing of $2,000,000; and

[ii]  $223,600 [Cdn.$325,000] if the purchased remote banking software generates
      revenue.

The Company  accrued the first  installment in its accounts as at March 31, 1999
[$49,712 less  accumulated  amortization  of $4,144] and paid this amount during
the year ended March 31,  2000.  The  Company is not using this  remote  banking
software and does not plan to use it in the future, therefore, this intellectual
property was written down to nil during the year ended March 31, 2000.

Acquired intellectual property consists of the following:
<TABLE>
<CAPTION>

                                                              2000
                                   --------------------------------------------------------
                                                          Accumulated                   Net
                                                         amortization                  book
                                      Cost              and write-downs               value
                                        $                      $                        $
-------------------------------------------------------------------------------------------
<S>                                <C>                      <C>                  <C>
Completed technology               17,066,624               3,060,715            14,005,909
Trademarks                            853,000                 150,853               702,147
Workforce-in-place                    253,000                  74,570               178,430
-------------------------------------------------------------------------------------------
                                   18,172,624               3,286,138            14,886,486
-------------------------------------------------------------------------------------------
</TABLE>

                                                         1999
                                    --------------------------------------------
                                                                        Net
                                                       Accumulated     book
                                    Cost               amortization   value
                                      $                     $           $
--------------------------------------------------------------------------------

Completed technology                 49,735                 4,144     45,591
--------------------------------------------------------------------------------


                                      F-19
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000



4. Acquired distribution and licensing rights

Pursuant to a license agreement dated June 29, 1999, between the Company and ITC
Learning  Corporation  ["ITC"],  the Company will become, for an unlimited term,
ITC's  exclusive  distance  learning  technology  partner  for the  hosting  and
delivery of educational  material  utilizing the A-STAR  component  within ITC's
Workforce  Initiative Program for total  consideration of $2,000,000,  which was
paid by the Company during the year ended March 31, 2000.

The Company  also  entered into a separate  distribution  agreement  with ITC in
March 1999. This distribution  agreement provided the Company with the perpetual
non-exclusive right to market, sell and electronically  convert all existing and
future ITC products in  consideration  for  $1,000,000  in respect of electronic
distribution  to the first 150,000  licensed  purchasers.  In the event that the
Company  effects  distribution  to more than 150,000  licensed  purchasers,  the
Company and ITC will share the revenue  generated  therefrom  based on a revenue
sharing formula.  The total  consideration was subsequently  reduced to $975,000
and was paid by the Company in two installments in March and May 1999.

5. CAPITAL ASSETS

Capital assets consist of the following:
<TABLE>
<CAPTION>

                                                                        2000
                                               ------------------------------------------------------
                                                                                                  Net
                                                                    Accumulated                  book
                                                Cost               amortization                 value
                                                  $                      $                        $
-----------------------------------------------------------------------------------------------------

<S>                                           <C>                       <C>                 <C>
Computer equipment and software                 568,301                 140,789               427,512
Office equipment                                266,439                  52,685               213,754
Leasehold improvements                           17,285                   3,569                13,716
Virtual Call Centre solution                    858,711                      --               858,711
Computer equipment under capital lease        1,923,911                 312,763             1,611,148
Other assets under capital lease                 30,700                   2,558                28,142
-----------------------------------------------------------------------------------------------------
                                              3,665,347                 512,364             3,152,983
-----------------------------------------------------------------------------------------------------
</TABLE>


                                      F-20
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000

<TABLE>
<CAPTION>

                                                                        1999
                                                -----------------------------------------------------
                                                                                                  Net
                                                                    Accumulated                  book
                                                Cost               amortization                 value
                                                  $                      $                        $
-----------------------------------------------------------------------------------------------------

<S>                                             <C>                       <C>                 <C>
Computer equipment and software                  64,899                   7,684                57,215
Office equipment                                 49,220                   1,887                47,333
Leasehold improvements                            2,979                     135                 2,844
-----------------------------------------------------------------------------------------------------
                                                117,098                   9,706               107,392
-----------------------------------------------------------------------------------------------------
</TABLE>

6. RELATED PARTY TRANSACTIONS

The amount due to related  parties  consists  of amounts due to current and past
officers of the  Company.  The amounts are  non-interest  bearing and payable on
demand.  The balances relate to expenditures  incurred and services performed on
behalf of the Company,  except for Cdn.$25,000 of the amount due as at March 31,
1999 and  December  31,  1998 which  relates to cash  advances  provided  to the
Company,  and $49,710  [Cdn.$75,000]  of the amount due as of March 31, 1999 and
December 31, 1998 which relates to the intellectual  property  described in note
3.

During the year ended  March 31,  2000,  the  Company  incurred  expenses of nil
[March 31, 1999 - nil, December 31, 1998 - $59,319; December 31, 1997 - $42,119]
for  managerial  and  consulting   services  from  Advanced   Systems   Computer
Consultants and nil [March 31, 1999 - nil; December 31, 1998 - $30,526; December
31, 1997 - nil] for consulting  services  provided by a company  controlled by a
shareholder and former director of the Company.

During the year ended March 31, 2000, the Company incurred  expenses of $142,740
[Cdn. $210,000] [March 31, 1999 - $26,981; December 31, 1998 - $16,178; December
31,  1997 - nil]] for  consulting  services  provided  by a  company  owned by a
shareholder and the Co-Chairman of the Company. The Company will continue to pay
a monthly  consulting  fee of $10,195  [Cdn.$15,000]  while  services  are being
rendered.

During the year ended March 31,  2000,  the Company  paid  consulting  fees to a
shareholder beneficially owning greater than 5% of the outstanding shares of the
Company,  in the amount of  $71,370  [Cdn.$105,000]  [March 31,  1999 - nil] for
consulting  services  related to business  development  and advice on  potential
acquisitions.

During  the year ended  March 31,  2000,  general,  administration  and  selling
expenses include $214,110 from the above related party  transactions  [March 31,
1999 - $26,981; December 31, 1998 - $106,023; December 31, 1997 - $42,119].

Revenues for the year ended March 31, 2000 include  $15,633 of hosting  services
provided  to a company  that has a director  that is an  officer of the  Company
[March 31, 1999 - nil; December 31, 1998 - nil; December 31, 1997 - nil].

7. OBLIGATIONS UNDER CAPITAL LEASES

The Company  entered into a lease  agreement on June 25, 1999 for the lease of a
Sun  Microsystems  Enterprise  10000  computer  and paid a deposit  of  $481,600
[Cdn.$700,000]  at the



                                      F-21
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000


time of execution.  Future  minimum  annual lease  payments under this and other
smaller capital leases expiring at various dates to March 2003 are as follows:

                                                                $
----------------------------------------------------------------------

2001                                                           579,167
2002                                                           566,259
2003                                                           294,156
----------------------------------------------------------------------
Total minimum lease payments                                 1,439,582
Less amount representing interest at 9.75% to 10.75%           156,933
----------------------------------------------------------------------
Balance of obligations                                       1,282,649
Less current portion                                           479,813
----------------------------------------------------------------------
                                                               802,836
======================================================================

The computers and equipment  acquired  pursuant to the capital  leases have been
included in capital  assets [note 5] and the  depreciation  on the computers and
equipment has been charged to the  consolidated  statements  of  operations  and
comprehensive loss.


                                      F-22
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




8. SHARE CAPITAL

Authorized

The Company has 100,000,000  shares of preferred stock authorized at a par value
of $0.001 per share and has 100,000,000  shares of common stock  authorized at a
par value of $0.001 per share.

Issued and outstanding common stock
<TABLE>
<CAPTION>

                                                                                 Common stock issued and
                                                                                     outstanding and
                                                                               additional paid-in-capital
                                                                           Shares                     Amount
                                                                              #                          $
---------------------------------------------------------------------------------------------------------------

<S>                                                                         <C>                         <C>
Outstanding as of January 29, 1999 [note 1]                                 15,080,000                  310,131
Private placement at $1.50 per share                                         3,032,336                4,548,500
Issuance of shares in consideration for consulting services                     60,000                  337,800
Share issuance costs                                                                --                  (42,992)
---------------------------------------------------------------------------------------------------------------
Outstanding as of March 31, 1999                                            18,172,336                5,153,439
Acquisition of Homebase Work Solutions Ltd. [note 1]                         3,400,000               17,000,000
Private placement at $5.00 per share                                           420,000                2,100,000
Private placement at $5.50 per share                                         1,879,000               10,334,500
Private placement, other                                                       500,000                4,187,500
ACT settlement [note 15]                                                       200,000                1,337,500
Share issuance costs                                                                --               (1,790,763)
---------------------------------------------------------------------------------------------------------------
Outstanding as of March 31, 2000                                            24,571,336               38,322,176
===============================================================================================================
</TABLE>

Exchangeable shares

The number of shares of common stock  outstanding  as of March 31, 2000 includes
3,327,208  exchangeable  shares of  InfoCast  Canada  which have been  deemed as
shares of common stock of the Company for accounting  purposes and in respect of
the loss per share calculations because the exchangeable shares are the economic
equivalent of shares of common stock of the Company.


                                      F-23
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




Securities Purchase Agreement

Pursuant to a Securities  Purchase  Agreement  dated June 24, 1999,  the Company
issued,  by way of a private  placement,  420,000  shares of common stock to the
agent at $5.00 per share for gross proceeds of $2,100,000, net of commissions of
$210,000.

Also pursuant to the Securities Purchase Agreement,  the Company issued warrants
to purchase  70,000  shares of common  stock on June 24,  1999 to the  placement
agent.  Each warrant has an exercise  price of $7.00,  expires June 23, 2001 and
has been valued at $3.24 in the accounts based on an expected  volatility factor
of 0.715  and a  risk-free  interest  rate of 5.1%.  As a result,  $226,800  was
charged to share issuance costs during the year ended March 31, 2000.

Private placements

From July to November  1999,  the Company  completed  the private  placement  of
1,879,000  shares of common  stock at $5.50  per  share  for gross  proceeds  of
$10,334,500 excluding an agent's fee of $1,033,329.

In February 2000 the Company  received 150,000 shares of common stock of another
publicly traded  corporation in consideration for 500,000 shares of common stock
of the Company  issued by way of private  placement.  The Company  recorded  the
issuance of its shares of common stock at the $8.375 per share fair value of the
Company's  common  stock on the date of the  transaction.  The  shares of common
stock of the other public company  received as  consideration,  net of 20,000 of
the shares  payable as a  commission  to the  agents,  have been  recorded  as a
short-term  equity  investment  and  classified  as  "available  for sale".  The
carrying value of the short-term  investment was adjusted to its market value as
at March 31, 2000,  resulting in an unrealized loss of $287,500  included in the
comprehensive  loss for the period.  In addition to the transfer of ownership of
20,000 shares of common stock of the  short-term  investment to the agents,  the
Company has accrued a $100,000  cash  commission  to the agents of this  private
placement.

As of May 5, 2000,  the market value of the short-term  investment  decreased to
approximately $2,200,000.


                                      F-24
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




Stock options

1998 Stock Option Plan

As of March 31, 2000,  2,250,000  shares of common  stock were  reserved for the
exercise  of stock  options  granted  to  various  individuals  involved  in the
management of VPS,  including 375,000 options originally granted to consultants,
pursuant to the Company's 1998 Stock Option Plan as amended on January 29, 1999.
The options were  granted as follows:  2,075,000 on February 8, 1999 and 175,000
on February 1, 2000 and are exercisable at a price of $1.00 per share. Effective
April 1, 1999,  an  individual  initially  classified as an employee and who had
been  granted  250,000  options  became a  consultant,  while on May 13, 1999 an
individual initially classified as a consultant and who had been granted 100,000
options became an employee.  As a result,  as at March 31, 2000,  700,000 of the
options are held by  consultants,  while  1,550,000  are held by  employees  and
directors.

The options  granted on  February  8, 1999  expire  three years from the date of
grant and were fully vested as of March 31, 2000.  Of the 275,000  stock options
that were originally granted to individuals still classified as consultants that
were originally  determined based on the fair market value of the options on the
date of grant, $5.87 per option,  were revalued as of the August 8, 1999 vesting
date to the then  current  fair  value of $9.06  per  stock  option  [based on a
revised  volatility  of 1.019 and the  August 8, 1999  closing  market  price of
$10.00 per share of common  stock].  This  revaluation  resulted  in a charge to
stock option compensation  expense of $2,109,537 during the year ended March 31,
2000.  Stock option  compensation  expense of  $1,116,205  was charged to income
during the year in respect of the 250,000 options granted to the individual that
became a consultant during the year, while stock option compensation  expense of
$503,033 was charged to income during the year in respect of the 100,000 options
granted  to the  individual  that  became a  director  during  the  year.  Stock
compensation  expense of $6,586,544  was charged to income during the year ended
March 31, 2000 in respect of the remaining  1,450,000  stock options  originally
granted to  individuals  still  classified as employees  and directors  that are
accounted for utilizing the intrinsic value method.

The 175,000  options  granted on February 1, 2000 expire two years from the date
of grant, vest on July 12, 2000 and were granted to a consultant of the Company.
The  deferred  compensation  attributable  to these stock  options  granted to a
consultant  was  revalued as of March 31, 2000 to the then current fair value of
$6.07 per stock option  [based on an expected  dividend  rate of 0%, an expected
life of one year, a risk-free rate of 6.18%,  an expected  volatility  factor of
0.873 and the March 31, 2000  closing  market price of $7.00 per share of common
stock].  These options have been valued at $1,062,250 of which $386,273 has been
recognized as a stock option  compensation  expense  during the year ended March
31,  2000 and of which the  balance of  $675,977  has been  recorded as deferred
compensation in stockholders' equity.


                                      F-25
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




1999 Stock Option Plan

The directors  and  stockholders  of the Company  approved the 1999 Stock Option
Plan under which an additional  2,000,000  stock options are eligible for grant.
As of March 31, 2000, the Company had 1,805,000  shares of common stock reserved
for the  exercise  of stock  options  granted  to various  employees,  officers,
consultants and advisors pursuant to the 1999 Stock Option Plan as follows:

                                      Option price                 Expiry
Grant date              Options          per share                  date
                           #                 $
-----------------------------------------------------------------------------

June 1, 1999              910,000          7.00                  June 1, 2004
November 19, 1999         400,000          7.00             November 19, 2004
December 8, 1999          375,000          7.05              December 8, 2004
February 18, 2000          20,000          7.00              February 8, 2005
February 29, 2000         100,000          8.625            February 29, 2005
-----------------------------------------------------------------------------
                        1,805,000
=============================================================================

The options  granted on June 1, 1999 were 100% vested as of March 31, 2000.  The
options  granted on  November  19,  1999 and  December  8, 1999 are subject to a
vesting period from immediate to two years.  The options granted on February 18,
2000 vest as  follows:  5,000 on the date of grant and 5,000 on each of February
18,  2001,  February 18, 2002 and  February  18,  2003.  The options  granted on
February  29, 2000 vest as  follows:  33,333 upon the  employee  assuming  their
position at the Company, 33,333 on March 1, 2001 and 33,334 on March 1, 2002.

Of 1,180,500  options  originally  granted on June 1, 1999  pursuant to the 1999
Stock Option Plan,  270,500 were cancelled in November 1999 leaving a balance of
910,000  outstanding  as of  March  31,  2000.  Of  the  910,000  stock  options
outstanding as of March 31, 2000,  700,000 were granted to employees and 210,000
were granted to consultants and advisors.  The 210,000 outstanding stock options
granted to  consultants  and advisors  have been valued at $527,100  [based on a
weighted average expected dividend rate of 0%, weighted average expected life of
1 year,  weighted average  risk-free  interest rate 5.46% and a weighted average
expected volatility factor of 0.805] which has been recognized as a stock option
compensation  expense  during  the year  ended  March  31,  2000.  The  deferred
compensation  in respect of the 700,000 stock  options  granted to employees and
directors  was nil  because the  exercise  price of the options was equal to the
market price of the shares of common stock on the date of grant.  Of the 270,500
stock options that were  cancelled,  195,500 had been granted to consultants and
had  vested  at  the  time  of  cancellation  which  resulted  in  stock  option
compensation  expense of  $422,280  being  recorded  in the year ended March 31,
2000.

The deferred  compensation  in respect of the stock options granted to employees
on November  19, 1999,  February  18, 2000,  February 29, 2000 and 25,000 of the
stock options  granted on December 8, 1999 was nil because the exercise price of
the options was equal to the market  price of the shares of common  stock on the
date of grant.  The remaining  350,000 stock options granted on December 8, 1999
have been  valued at $113,750 of which  $52,136 has been  recognized  as a stock
option  compensation  expense during the year ended March 31, 2000, and of which
the  balance  of  $61,614  has  been  recorded  as  deferred   compensation   in
stockholders'  equity. The



                                      F-26
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000


measurement  date of the 350,000 stock  options  granted on December 8, 1999 was
January 4, 2000, the date when the employee commenced employment.

Other stock options

On June 1, 1999,  the  directors  of the Company  approved  the grant of 750,000
stock options  outside of the 1999 Stock Option Plan to an individual who became
an  officer  of the  Company  on  September  4,  1999.  The  stock  options  are
exercisable  at a price of $7.00 per share,  expire  five years from the date of
grant and vest as follows:  250,000 on September 4, 1999 upon the  acceptance by
the individual of formal  employment  with the Company,  250,000 on September 4,
2000 and 250,000 on  September  4, 2001.  These  outstanding  options  have been
valued at $2,437,500 of which  $1,523,437 has been  recognized as a stock option
compensation  expense  during the year ended  March 31,  2000,  and of which the
balance of $914,063 has been recorded as deferred  compensation in stockholders'
equity.  The measurement date in respect of these stock options was September 4,
1999.

On October 18, 1999,  the directors of the Company  approved the grant of 60,000
stock options  outside of the 1999 Stock Option Plan to an individual  who is to
provide financial and investor relations consulting services to the Company. The
stock options are  exercisable  at a price of $8.25 per share,  expire two years
from the date of grant and vest as follows:  15,000 on January 14, 2000,  15,000
on March 15,  2000,  15,000 on June 15, 2000 and 15,000 on  September  15, 2000.
These  outstanding  options  have been valued at $151,200  [based on an expected
dividend rate of 0%, an expected life of one year, a risk-free rate ranging from
5.83% to 6.18% and an expected volatility factor of 0.873] of which $125,363 has
been  recognized as a stock option  compensation  expense  during the year ended
March 31,  2000,  and of which the  balance  of  $25,837  has been  recorded  as
deferred compensation in stockholders' equity. The deferred compensation for the
then current fair value at each interim reporting  financial reporting date will
be amortized over the remaining  vesting  periods of the options.  The agreement
with this individual was terminated in May 2000 resulting in the cancellation of
unvested options to purchase 30,000 shares of common stock previously granted.


                                      F-27
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




A summary of the Company's stock option activity is as follows:
                                                                       Weighted
                                                                      average
                                             Number of               exercise
                                              options                  price
                                                #                        $
-------------------------------------------------------------------------------

Outstanding as of January 1, 1999                   --                      --
Granted                                      2,250,000                    1.00
Exercised                                           --                      --
Forfeited                                           --                      --
Cancelled                                     (175,000)                   1.00
------------------------------------------------------------------------------
Outstanding as of March 31, 1999             2,075,000                    1.00
Granted                                      3,060,500                    6.74
Exercised                                           --                      --
Cancelled - not vested                         (75,000)                   7.00
Cancelled - vested                            (195,500)                   7.00
------------------------------------------------------------------------------
Outstanding as of March 31, 2000             4,865,000                    4.28
------------------------------------------------------------------------------

Exercisable as of March 31, 2000             3,628,336                    3.60
==============================================================================

In April 2000,  300,000 of the options  granted under the 1998 Stock Option Plan
and  100,000  of the  options  granted  under the 1999  Stock  Option  Plan were
cancelled.

Pro forma net loss

If the Company had been following FASB Statement No. 123 ["FASB 123"] in respect
of stock options granted to its employees and directors,  the Company would have
recorded a higher stock option compensation expense for the year ended March 31,
2000 of $2,990,493 in respect of the  amortization of the estimated value of the
Company's  stock options to employees  over the vesting  periods of the options,
which results in a pro-forma net loss of $34,141,677  and a pro-forma  basic and
diluted loss per share of $1.51 in respect of the year ended March 31, 2000.


                                      F-28
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




The Company  assumed the following  expected  dividend  rates,  expected  lives,
risk-free  interest  rate and  expected  volatility  factors  in  respect of the
valuation of stock options granted to employees and directors in accordance with
FASB 123:

                                                    Weighted
                                                    average
-------------------------------------------------------------

Expected dividend rate                                     0%
Expected life                                       1.5 years
Risk-free interest rate                                 5.30%
Expected volatility                                    0.8087
=============================================================

Issuance of shares in consideration for consulting services

Pursuant to an agreement  dated March 22, 1999, the Company issued 60,000 shares
of common stock to a financial  investment-consulting  firm on March 22, 1999 in
consideration for assistance in securing additional financing over the following
year. The measurement  date for these shares of common stock was March 22, 2000,
at which time the market value of the common shares was $7.50, which resulted in
a charge to general and  administrative  expenses  of  $439,820  during the year
ended March 31, 2000.

Other warrants

Pursuant to a letter  agreement  dated May 20,  1999 with an investor  relations
company and subsequent  negotiations  in October 1999, the Company was obligated
to pay a total of $75,000 and issue warrants to purchase 75,000 shares of common
stock in  consideration  for consulting  services during the period from June 1,
1999 to May 31,  2000.  The  payments  were to be made and  warrants  issued for
services in advance.  The  following  payments  have been made and the following
warrants  have been  issued:  $25,000  and 25,000  warrants  on June 1, 1999 and
$12,500 and 12,500  warrants on each of October 6, 1999 and January 1, 2000. The
Company  terminated  the agreement in March 2000 and does not intend to make any
additional payments nor issue additional warrants. Based on an expected dividend
rate of 0%, a volatility factor of 0.963 and a risk-free interest rate of 5.10%,
the Company  valued the 25,000  warrants  issued on June 1, 1999 with a purchase
price of $7.00 per share,  at $149,750  which is the fair market value as of the
August 31, 1999  measurement  date.  Based on a volatility  factor of 0.914,  an
expected dividend rate of 0% and a risk-free interest rate of 6.10%, the Company
valued the 12,500  warrants  issued on October 6, 1999 with a purchase  price of
$8.75 per share,  at $33,250  which is the fair market  value as of the November
30,  1999  measurement  date.  Based  on an  expected  dividend  rate  of 0%,  a
volatility  factor of 0.873 and a risk-free  interest rate of 6.18%, the Company
valued the 12,500  warrants  issued on January 1, 2000 with a purchase  price of
$7.62 per share,  at $28,875  which is the fair market value as of the March 31,
2000  measurement  date.  All  warrants  issued  under  this  agreement  will be
exercisable  on or after  June 1, 2000 and  expire  May 31,  2001.  The  Company
charged  $211,875  to general  and  administrative  expenses in respect of these
warrants during the year ended March 31, 2000.

On June 1, 1999,  the Company  issued  warrants to  purchase  200,000  shares of
common stock to parties in  consideration  for past  consulting  services to the
Company.  These warrants have a purchase price of $7.00,  are  exercisable on or
after June 1, 2000 and expire May 31, 2001.  These  warrants have been valued at
$432,000 in the  accounts  based on a  volatility  factor of 0.744,  an



                                      F-29
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000


expected  dividend  rate of 0% and a risk-free  interest  rate of 5.10% and have
been charged to general and administrative expenses.

On February 11, 2000, the Company issued  warrants to purchase  56,000 shares of
common  stock  to a  shareholder  of the  Company  for no  consideration.  These
warrants have a purchase  price of $5.00,  are  exercisable on or after February
11,  2000 and expire  February  10,  2002.  These  warrants  have been valued at
$137,200 in the accounts  based on a volatility  factor of 0.840 and a risk-free
interest  rate of 5.95% and have been  charged  to  general  and  administrative
expenses.

9. CONVERTIBLE DEBENTURES

On March 30, 2000, the Company issued 3,500 units by way of a private  placement
at $1,000 per unit for gross  proceeds  of  $3,500,000.  Each unit  consists  of
$1,000 principal of convertible  subordinated  debentures and 111.111  warrants.
The convertible  debentures bear interest  accruing from the date of issue at 7%
per annum,  payable  semi-annually  on  September  30 and March 31 and mature on
March 31, 2005. The debentures are convertible at the option of the holders at a
conversion  price of $6.00  per  share.  The  conversion  price  is  subject  to
adjustment  under certain events pursuant to the agreement.  The Company has the
right to require the holder to convert all or a portion of these  debentures  if
[i] at any time after  March 31,  2003 the  closing  bid price of the  Company's
common stock exceeds $18.00 for 15 consecutive  trading days or [ii] the Company
completes  a $50 million  financing  within one year at a price in excess of $12
per share.  Each of the 388,889  warrants  are  exercisable  at $7.50 per share,
expire on March 31, 2003 and cannot be  exercised  within the first year without
also converting the convertible debentures.

The  intrinsic  value of the  beneficial  conversion  option has been  valued at
$1,913,482  and  has  been  included  in  interest  expense  as the  option  was
exercisable upon issuance.

Cash  commission  costs of $275,000  were paid relating to the issuance of these
debentures  and were  recorded  as a deferred  charge as of March 31,  2000.  In
addition,  the Company issued agent common stock  purchase  warrants to purchase
97,222  shares of common  stock at $7.50 per share to the agents as a  placement
fee.  These  warrants  have been valued at  $329,583,  based on a  Black-Scholes
valuation  utilizing a volatility  factor of 0.864,  an expected life of 2 years
and a risk-free  interest  rate of 5.95%,  and have been  recorded as a deferred
charge.  The deferred  charges  related to this placement will be amortized on a
straight-line basis over the 5-year life of the debentures.

On April 4, 2000,  the Company  completed the sale of an additional  2,500 units
for gross proceeds of $2,500,000 with identical  terms as the debentures  issued
on March 30, 2000.

10. COMMITMENTS

[a] Lease commitments

The Company  leased  premises  and  equipment  under  non-cancellable  operating
leases, which require future minimum annual lease payments as follows:

                                                                    $
-----------------------------------------------------------------------

2001                                                            331,542
2002                                                            241,622



                                      F-30
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000


2003                                                            181,573
2004                                                            172,272
2005                                                             88,338
-----------------------------------------------------------------------
                                                              1,015,347
=======================================================================

The rental payments for the premises are exclusive of taxes and operating costs.

During the year ended March 31,  2000,  the  Company  incurred  rent  expense of
$384,334 [March 31, 1999 - $38,382; March 31, 1998 - $4,044; December 31, 1998 -
$16,701; December 31, 1997 - $5,711].

[b] CosmoCom, Inc.

Pursuant to a summary of terms and conditions for a definitive agreement between
the Company  and  CosmoCom,  Inc.  dated  April  1999,  the Company  intended to
purchase licenses for CosmoCom,  Inc.'s CosmoCall software.  Under this summary,
the Company placed an initial order for 300 licenses for total  consideration of
$754,500.  The Company has taken  delivery of the 300  licenses and paid license
fees of $475,650 in the year ended March 31, 2000. The balance of $278,850 is to
be paid in three  monthly  installments  beginning  April 1, 2000.  The  Company
capitalized  the  $754,500 to the Virtual  Call Centre  [note 5] during the year
ended March 31, 2000 as the licenses  represent  completed software that will be
incorporated  into the  Company's  virtual  call centre  solution  currently  in
development.


                                      F-31
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




11. PREPAID ROYALTIES

On February 24, 2000,  InfoCast and Innatrex Inc.  ["Innatrex"]  entered into an
Application  Service Provider Agreement ["ASP Agreement"] which allows InfoCast,
among other things, to incorporate  Innatrex's software product into its product
offerings  and  license  the  Innatrex  software  product to third  parties.  In
consideration, InfoCast will pay royalties to Innatrex, of which the Company has
prepaid $207,857  [Cdn.$300,000].  The Company has recorded this prepayment as a
prepaid  expense  and will  amortize  the balance as it  sublicenses  Innatrex's
software product.

12. JOINT VENTURE INVESTMENT

Pursuant to a  shareholder  agreement  executed on November 25, 1999 between the
Company,  813040 Alberta Ltd. ["Newco"] and Canpet Energy Group Inc. ["Canpet"],
the Company and Canpet agreed to become  shareholders of Newco,  with each party
initially  becoming  a 50% owner of  Newco.  Newco is to  develop a  web-enabled
trading business model for crude oil and natural gas liquids and other products.
Initial funding for Newco will be by way of loans from the  shareholders.  Under
the agreement,  the Company is required to provide the  following:  [i] $258,000
[Cdn.$375,000]  as required by cash calls  approved by the Board of Directors of
Newco, [ii] development,  marketing and technical  expertise for the development
and sales of products and services  marketed by Newco,  [iii]  temporary  office
space at the Company's existing Calgary office location at a cost to be mutually
agreed to by the  Company  and Newco,  and [iv]  accounting  and  administrative
support  services  until such time as Newco's  business  develops to an adequate
size to support a dedicated staff.

As  of  March  31,   2000,   the  Company  had  advanced  a  total  of  $171,721
[Cdn.$249,595] to Newco;  $3,440 [Cdn.$5,000] for the initial purchase of common
shares and  $168,281 in the form of  shareholder  loans which have a  conversion
feature  attached  allowing the Company to convert the advances into  additional
shares of Newco.

Newco issued additional common shares in the three-month  period ended March 31,
2000  resulting in the dilution of the Company's  ownership in Newco from 50% to
2.13% [34.48% on a fully diluted basis] as of March 31, 2000.

A further $86,278  [Cdn.$125,405]  was advanced by the Company to Newco in April
2000,  also in the form of a  shareholder  loan  which  has the same  conversion
feature, that had the effect of increasing the Company's fully diluted ownership
interest to  approximately  34%. The Company has accounted  for this  investment
using the equity method.


                                      F-32
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




13. INCOME TAXES

As of March  31,  2000,  the  Company  has  accumulated  non-capital  losses  of
approximately Cdn.  $10,030,000  [approximately  $7,100,000] for Canadian income
tax purposes  which are  available to reduce future years'  taxable  income.  Of
these carryforward amounts, approximately Cdn. $319,000 [approximately $219,000]
resulted  from the  acquisition  of Homebase  [note 1] and if  realized  the tax
benefit  of the  unrecognized  loss  carryforward  will be applied to reduce the
goodwill related to the acquisition of Homebase.  The future income tax benefits
associated  with these  non-capital  losses have not yet been  recognized in the
accounts. These non-capital losses will expire as follows:

                                                                     Cdn. $
----------------------------------------------------------------------------

2002                                                                 125,000
2003                                                                 625,000
2004                                                                 126,000
2005                                                                 325,000
2006                                                                 120,000
2007                                                               8,709,000
----------------------------------------------------------------------------
                                                                  10,030,000
============================================================================

The Company has recorded no United States current  federal income tax expense or
benefit.  As of March 31, 2000, the Company has accumulated net operating losses
of  approximately  $3,939,000  for United States  income tax purposes  which are
available to reduce future years' taxable income. The future income tax benefits
associated  with these net operating  losses have not yet been recognized in the
accounts. These net operating losses will expire as follows:

                                                                        $
---------------------------------------------------------------------------

2018                                                                568,000
2019                                                                823,000
2020                                                              2,548,000
---------------------------------------------------------------------------
                                                                  3,939,000
===========================================================================


                                      F-33
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




The Company has a United  States  capital  loss  carryforward  of  approximately
$5,939,000. A capital loss carryforward may only be used to reduce capital gains
and cannot be applied  against  taxable  ordinary income that might be earned by
the Company. These capital loss carryforwards will expire as follows:

                                                             $
----------------------------------------------------------------

2003                                                   5,339,000
2004                                                     600,000
----------------------------------------------------------------
                                                       5,939,000
----------------------------------------------------------------

Utilization  of the  United  States net  operating  loss  carryforwards  and the
capital loss  carryforwards  are subject to the loss limitations rules which may
substantially  limit the  annualization  of these  losses  due to the  ownership
change that occurred on January 29, 1999 [note 1]. Such annual  limitations  may
result in the  expiration  of all or a  portion  of the loss  carryovers  before
utilization.

A deferred tax asset has been established  relating to the operating and capital
loss  carryforwards  and the timing  differences  between the  Company's tax and
financial  reporting basis. A valuation  allowance equal to the entire amount of
the deferred tax asset has been established due to the uncertainty of the future
utilization of the operating and capital loss carryforwards.

Following are the components of the Company's deferred tax liability balances:
<TABLE>
<CAPTION>

                                                           March 31,            March 31,
                                                             2000                 1999
                                                               $                    $
-----------------------------------------------------------------------------------------

<S>                                                        <C>
Homebase acquisition [note 1]                              (5,656,895)                 --
Future tax benefit of Canadian loss carryforwards           3,082,986             559,887
Canadian book depreciation in excess of
   tax depreciation                                            63,092            (559,887)
Canadian valuation allowance                               (3,146,078)                  --
Future tax benefit of United States
   net operating loss carryforwards                         1,354,000             386,000
Future tax benefit of United States
   capital loss carryforwards                               2,257,000           2,029,000
Other United States amounts                                 1,711,000               2,000
United States valuation allowance                          (5,322,000)         (2,417,000)
-----------------------------------------------------------------------------------------
                                                           (5,656,895)                 --
=========================================================================================
</TABLE>

The deferred  income tax recovery  recorded on the  consolidated  statements  of
operations  and  comprehensive  loss for the year  ended  March  31,  2000 is in
respect of the decrease in the  difference  between the accounting and tax basis
of the completed technology,  trademarks and workforce-in-place created upon the
acquisition of Homebase [note 1] from the May 13, 1999 acquisition date to March
31, 2000.


                                      F-34
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000


14. CONTINGENCIES

Fair value of financial instruments

The following disclosure of the estimated fair value of financial instruments is
made in accordance  with the  requirements of SFAS No. 107,  "Disclosures  about
Fair Value of Financial Instruments". The estimated fair value amounts have been
determined by the Company using  available  market  information  and appropriate
valuation methodologies.

The fair  values  of  financial  instruments  classified  as  current  assets or
liabilities  including  cash  and  cash  equivalents,  accounts  receivable  and
accounts payable and accrued  liabilities as of March 31, 2000 approximate their
carrying  values due to the  short-term  maturity of the  instruments.  The fair
values of the  convertible  debentures as of March  31,  2000  approximate   its
carrying value.

Concentration of credit risk

The  Company  invests  its  cash  and cash  equivalents  primarily  with a major
Canadian  chartered bank.  Certain  deposits,  at times, are in excess of limits
insured  by  the  Canadian  government.   The  Company  believes  the  financial
institutions holding the Company's deposits are financially sound.  Accordingly,
minimal credit risk exists.

Note receivable from Cherokee Mining Company Inc.

Pursuant to an agreement dated November 23, 1998, as amended April 20, 1999, and
effective  December 18, 1998,  InfoCast  [the  acquired  entity] sold its equity
interest in its two subsidiaries,  Gold King Mines Corporation ["Gold King"] and
Madison Mining  Corporation  ["Madison  Mining"] to Cherokee Mining Company Inc.
["Cherokee"],  a company controlled by a former director of InfoCast,  for [i] a
non-interest  bearing  note of  $600,000  due  November  25,  1999  and [ii] the
entitlement to 80% of the net proceeds  received by Madison Mining and Gold King
in excess of $681,175 from the sale of their mining properties and assets.


                                      F-35
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




InfoCast did not record a value on the $600,000 note  receivable  because of the
uncertainty of whether the management of Cherokee,  Gold King and Madison Mining
would be able to sell the  capital  assets of Gold King and  Madison  Mining for
sufficient  proceeds to enable the note to be repaid to  InfoCast.  As a result,
VPS did not reflect the note in the purchase  equation upon the  acquisition  of
InfoCast in January 1999.

Pursuant to a  Termination  Agreement  executed  during the year ended March 31,
2000,  [i] the  agreement  dated  November  23,  1998 was  terminated,  [ii] the
non-interest bearing note of $600,000 due November 25, 1999 was cancelled, [iii]
Cherokee  entered  into a  purchase  and sale  agreement  with  another  company
pursuant  to which  Cherokee  will  sell the  equity  interest  in Gold King and
Madison Mining to the other company in consideration  for, amongst other things,
a promissory  note for the principal sum of $250,000 plus interest at a rate per
annum equal to the prime rate, due on July 29, 2004,  [iv] Cherokee  assigned to
InfoCast the $250,000  promissory  note from the other  company and [v] Cherokee
agreed to pay  InfoCast  $22,670.  InfoCast  received  payment of the $22,670 in
December  1999 and  credited  this amount to income.  InfoCast  did not record a
value on the $250,000  promissory note receivable  because of the uncertainty of
collection.  In the event the  promissory  note is repaid,  the  amount  will be
credited to income.

15. settlement with Applied Courseware Technology (A.C.T.) Inc.

Pursuant to a Letter of Intent dated February 10, 1999, as amended,  between the
Company and Applied  Courseware  Technology  (A.C.T.) Inc. ["ACT"],  the Company
intended to purchase a 100% interest in ACT.

In  September  1999  the  Company  made the  decision  not to  proceed  with the
acquisition of ACT, which ACT contested. On January 7, 2000, the Company reached
a final settlement with the shareholders of ACT whereby the Company paid $68,800
[Cdn.$100,000] in consideration for certain capital assets and the reimbursement
of expenses incurred by ACT relating to the purchase agreement,  which amount is
included in the accounts as of March 31, 2000. In addition,  the Company forgave
a note for $95,242 [Cdn.$140,000],  including interest of $3,443 and as a result
wrote the amount  receivable down to nil. The Company also issued 200,000 shares
of common  stock of the  Company  to two  shareholders  of ACT and  recorded  an
expense in the  accounts  at the fair value of the common  shares  issued at the
date of the settlement.

During the year ended  March 31,  2000,  the Company  made cash  advances to ACT
totalling  $559,873  [Cdn.$823,629]  to fund  certain  development  expenditures
incurred by ACT on behalf of the Company. These advances, in addition to $47,390
[Cdn.$70,000]  that was  outstanding as of March 31, 1999,  have been charged to
research and development expenses during the year ended March 31, 2000.


                                      F-36
<PAGE>
InfoCast Corporation
[formerly Virtual Performance Systems Inc.] [a development stage company]

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   [U.S. dollars except where otherwise noted]

March 31, 2000




16. SUBSEQUENT EVENTS

Investor relations agreement

Pursuant to a letter  agreement dated April 7, 2000, the Company will pay $9,000
per month plus expenses,  and issued warrants to purchase  200,000 common shares
[at an exercise  price of $6.50 and expiring in 5 years] to a financial  advisor
in consideration for general corporate financial advisory and investor and media
relations  consulting  services  over the one  year  term of the  agreement.  In
addition,  the  financial  advisor will be entitled to a  commission  on certain
corporate financing transactions in which the financial advisor is involved.

Merger with i360, Inc.

On February 17, 2000, the Company  entered into a letter of agreement with i360,
Inc.  ["i360"] and the shareholders of i360,  whereby the parties agreed for the
Company  and i360 to merge.  On May 3, 2000,  the  Company  and i360  executed a
definitive  Agreement and Plan of Merger  providing for the  acquisition  by the
Company of all of the outstanding  shares of common stock of i360. The Agreement
and Plan of Merger  amended the terms agreed to in the letter of  agreement  and
provides  for a statutory  merger of i360 into  InfoCast,  pursuant to which the
holders of i360's  issued and  outstanding  common  stock  will be  entitled  to
receive  0.30 shares of InfoCast  common  stock per share of i360 common  stock,
which will result in an aggregate of 7,584,000  shares of InfoCast  common stock
being  issued.  In  addition,  all  outstanding  warrants  and stock  options to
purchase shares of i360 common stock will convert into merger warrants and stock
options to purchase  shares of the  Company's  common stock at a 1:0.3  exchange
ratio which will result in an  aggregate  of  4,416,000  merger  warrants of the
Company with an exercise  price of $0.33 per share and  1,030,803  stock options
with an exercise price of $4.00 per share being issued.  The transaction,  which
has been approved by the Boards of Directors of InfoCast and i360, is subject to
approval by the stockholders of i360 and InfoCast,  successful completion of any
regulatory approvals and certain other conditions. The merger warrants will vest
as follows:  25% on February 21, 2000, 25% on September 21, 2000, 25% on January
21, 2001 and 25% on January 21,  2002.  The stock  options will vest as follows:
33.3% on May 2, 2001, 33.3% on May 2, 2002 and 33.3% on May 2, 2003.



                                      F-37