<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
-------------------------------------------------------------------------------

[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
       ACT OF 1934

       For the quarterly period ended September 30, 2000

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


                       Commission file number: 000-28721

                                 WEBCATALYST, INC.
             (Exact name of registrant as specified in its charter)


               Georgia                                   582321232
   --------------------------------         ------------------------------------
   (State or Other Jurisdiction of          (I.R.S. Employer Identification No.)
    Incorporation or Organization)

    6690 Jones Mill Court, Suite A
           Norcross, Georgia                              77356
   --------------------------------------         ---------------------
   (Address of Principal Executive Office)              (Zip Code)

    Issuer's telephone number, including area code:   (770) 448-4150

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes  [X]  No  [ ]

         As of September 30, 2000 the registrant had 9,079,750 shares of Common
Stock outstanding.

         Transitional Small Business Disclosure Format (check one):

Yes  [ ]  No  [X]




<PAGE>   2
                               WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                          CONSOLIDATED BALANCE SHEETS




                                     ASSETS


<TABLE>
<CAPTION>
                                                           September 30,           December 31,
                                                                2000                   1999
                                                           ------------            ------------
                                                           (unaudited)
     <S>                                                   <C>                     <C>
CURRENT ASSETS
   Cash and short-term investments                         $   310,929                $   2,857
   Trade accounts receivable                                   168,564                  112,993
   Inventories                                                 211,762                  148,055
   Prepaid expenses and other current assets                     3,015                   19,376
                                                           -----------                ---------

       Total current assets                                    694,270                  283,281

PROPERTY AND EQUIPMENT - AT COST
   Office furniture and equipment                              132,267                   74,623
   Vehicles                                                     55,482                   55,482
                                                           -----------                ---------
                                                               187,749                  130,105
   Less accumulated depreciation                               (60,226)                 (37,626)
                                                           -----------                ---------
           Net property and equipment                          127,523                   92,479

OTHER ASSETS
   Goodwill, net                                             1,152,211                       --
   Deferred financing cost                                     250,518                  425,196
   Deposits                                                      7,075                    7,075
           Total other assets                                1,409,804                  432,271

                                                           $ 2,231,597                $ 808,031
                                                           ===========                =========
</TABLE>




The accompanying notes are an integral part of these statements.


                                        2

<PAGE>   3


                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                           CONSOLIDATED BALANCE SHEETS





                      LIABILITIES AND SHAREHOLDERS' DEFICIT


<TABLE>
<CAPTION>
                                                        September 30,             December 31,
                                                            2000                       1999
                                                        -----------                -----------
                                                        (unaudited)
<S>                                                     <C>                        <C>
CURRENT LIABILITIES
   Current maturities of long term debt                 $     8,431                $     7,927
   Note payable to officer                                   35,000                         --
   Note payable to related party                            113,185                         --
   Notes payable                                             70,873                    100,873
   Trade accounts payable                                   670,399                    387,965
   Accrued expenses                                         234,694                    190,619
   Deferred revenue                                          50,197                         --
   Convertible debentures                                 1,099,540                         --
                                                        -----------                -----------

       Total current liabilities                          2,282,319                    687,384

LONG-TERM DEBT, net of current maturities                    20,256                     18,626

CONVERTIBLE DEBENTURES                                           --                    896,663

SHAREHOLDERS' DEFICIT
   Capital stock (Note E)                                 4,033,843                  1,566,659
   Accumulated deficit                                   (4,102,571)                (2,361,301)
                                                        -----------                -----------
                                                            (68,728)                  (794,642)
   Deferred stock compensation                               (2,250)                        --
                                                        -----------                -----------

         Total shareholders' deficit                        (70,978)                  (794,642)
                                                        -----------                -----------

                                                        $ 2,231,597                $   808,031
                                                        ===========                ===========
</TABLE>


                                        3

<PAGE>   4
                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months
                                                       Ended September 30,
                                              --------------------------------------
                                                   2000                       1999
                                              -----------                -----------
<S>                                           <C>                        <C>
Revenue
   Product sales                              $   415,527                $   883,801
                                              -----------                -----------
Costs and expenses
   Cost of product sales                          329,284                    730,128
Selling, general and
     administrative                               238,554                    515,741
                                              -----------                -----------
                                                  567,838                  1,245,869

         Loss from Operations                    (152,311)                  (362,068)
Other income (expense)
   Interest income                                    199                      2,565
   Interest and financing costs                  (618,484)                  (375,394)
                                              -----------                -----------
         Net loss before
           income taxes                          (770,596)                  (734,897)

Income tax expense (benefit)                           --                         --
                                              -----------                -----------
         Net loss                             $  (770,596)               $  (734,897)
                                              ===========                ===========

Net loss per common share
   Basic                                      $     (0.10)               $     (0.12)
                                              ===========                ===========
   Diluted                                    $     (0.10)               $     (0.12)
                                              ===========                ===========

Weighted average shares
   Basic                                        7,737,127                  6,197,337
                                              ===========                ===========
   Diluted                                      7,737,127                  6,197,337
                                              ===========                ===========
</TABLE>



The accompanying notes are an integral part of these statements.


                                        4
<PAGE>   5

                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  Nine Months
                                              Ended September 30,
                                         ------------------------------
                                             2000              1999
                                         ------------      ------------

<S>                                      <C>               <C>
Revenue
   Product sales                         $  1,870,724      $  2,727,455
                                         ------------      ------------
Costs and expenses
   Cost of product sales                    1,526,266         2,253,134
   Selling, general and
     administrative                         1,220,301         1,093,828
                                         ------------      ------------
                                            2,746,567         3,346,962
                                         ------------      ------------

        Loss from Operations                 (875,843)         (619,507)

Other income (expense)
   Interest income                                285             1,832
   Interest and financing costs              (865,712)         (375,394)
                                         ------------      ------------
         Net loss before
           income taxes                    (1,741,270)         (993,069)

Income tax expense (benefit)                       --                --
                                         ------------      ------------
         Net loss                        $ (1,741,270)     $   (993,069)
                                         ============      ============

Net loss per common share
   Basic                                 $      (0.25)     $      (0.16)
                                         ============      ============
   Diluted                               $      (0.25)     $      (0.16)
                                         ============      ============
Weighted average shares
   Basic                                    6,963,697         6,144,726
                                         ============      ============
   Diluted                                  6,963,697         6,144,726
                                         ============      ============
</TABLE>


                                       5
<PAGE>   6

                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                Deferred
                                              Number of        Capital        Accumulated        stock
                                                shares          stock           deficit       compensation       Total
                                              ----------      ----------      ------------    ------------    ------------

<S>                                           <C>             <C>             <C>             <C>             <C>
Balance, December 31, 1999                     6,236,292      $1,566,659      $ (2,361,301)     $     --      $   (794,642)

Issuance of stock for services                   187,663         310,602                --            --           310,602

Conversion of convertible debentures             533,432         344,756                --            --           344,756

Exercise of warrants                              40,000          40,000                --            --            40,000

Private placement                                830,000         240,000                --            --           240,000

Issuance of stock for interest
  and penalties on convertible
  debentures                                     376,363         141,136                --            --           141,136

Issuance of stock in conjunction
  with acquisition of Webcat
  Online, Inc.                                   870,000         340,170                --            --           340,170

Issuance of warrants in conjunction
  with acquisition of Webcat,
  Online, Inc.                                        --         500,000                --            --           500,000

Issuance of stock to employees                     6,000           2,250                --        (2,250)               --

Beneficial conversion feature of
  convertible debentures                              --         225,000                --            --           225,000

Warrants issued to debenture holders                  --         323,270                --            --           323,270

Net loss for the period                               --              --        (1,741,270)           --        (1,741,270)
                                              ----------      ----------      ------------      --------      ------------

Balance, September 30, 2000                    9,079,750      $4,033,843      $ (4,102,571)     $ (2,250)     $    (70,978)
                                              ==========      ==========      ============      ========      ============
</TABLE>

The accompanying notes are an integral part of this statement.


                                       6

<PAGE>   7
                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                    Nine Months
                                                                                 Ended September 30,
                                                                      ----------------------------------------
                                                                           2000                       1999
                                                                      -----------------     ------------------
<S>                                                                   <C>                        <C>
Cash flows from operating activities:
   Net loss                                                           $(1,741,270)               $  (993,069)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
       Depreciation and amortization                                      721,425                    387,781
       Issuance of stock to employees                                          --                     87,840
       Issuance of common stock for services                              310,604                         --
       Issuance of common stock for penalties
         and interest in convertible debentures                           141,136                         --
       Change in assets and liabilities:
         Accounts receivable                                                3,530                    (70,377)
         Inventories                                                      (63,707)                   (63,824)
         Prepaid expenses and other current assets                         18,536                       (400)
         Other assets                                                          --                       (300)
         Trade accounts payable                                           271,503                   (393,831)
         Accrued expenses                                                  46,859                        611
                                                                       ----------                -----------
             Net cash used in operating activities                       (291,384)                (1,045,569)
                                                                       ----------                -----------

Cash flows from investing activities:
   Purchase of property and equipment                                     (13,033)                   (26,341)
   Cash paid for Webcat Online acquisition,
     net of cash acquired of $11,881                                     (233,673)                        --
                                                                       ----------                -----------
              Net cash used in investing activities                      (246,706)                   (26,341)
                                                                       ----------                -----------

Cash flows from financing activities:
   Net proceeds (payments) on notes payable                                  (838)                    96,090
   Proceeds from issuance of common stock                                 240,000                    170,000
   Proceeds from convertible debentures                                   675,000                  1,200,000
   Financing costs                                                       (108,000)                  (132,500)
   Exercise of warrants                                                    40,000                      4,000
                                                                       ----------                -----------
              Net cash provided by financing activities                   846,162                  1,337,590
                                                                       ----------                -----------

Net increase in cash and short-term investments                           308,072                    265,680

Cash and short-term investments at beginning of year                        2,857                     72,540
                                                                       ----------                -----------

Cash and short-term investments at end of year                         $  310,929                $   338,220
                                                                       ==========                ===========
</TABLE>


                                        7

<PAGE>   8


                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                           Nine Months
                                                                                       Ended September 30,
                                                                              --------------------------------------
                                                                                    2000                  1999
                                                                              --------------        ----------------
<S>                                                                           <C>                    <C>
Supplemental Schedule of Noncash Investing and Financing Activities


   Conversation of convertible debentures to stock                                $   340,000                $    --

   Stock issued for services                                                      $   310,602                $    --

   Stock issued for interest and penalties on convertible
     debentures                                                                   $   145,892                $    --

   Stock issued to employees                                                      $     2,250                $87,840

Acquisition of Webcat Online, Inc.

   Fair value of assets acquired                                                  $   117,769                $    --
   Goodwill                                                                         1,152,211                     --
   Cash paid                                                                         (245,554)                    --
   Stock and warrants issued                                                         (840,170)                    --
                                                                                  -----------                -------

   Liabilities assumed                                                            $   184,256                $    --
                                                                                  ===========                =======
</TABLE>




The accompanying notes are an integral part of these statements.


                                       8
<PAGE>   9
                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

                               September 30, 2000

NOTE A - BASIS OF PRESENTATION

   The interim consolidated financial statements included herein have been
   prepared by the Company without audit. These statements reflect all
   adjustments which are, in the opinion of management, necessary to present
   fairly the financial position, results of operations, cash flows and changes
   in stockholders' equity for the periods presented. All such adjustments are
   of a normal recurring nature. Certain information and footnote disclosures
   normally included in financial statements prepared in accordance with
   generally accepted accounting principles have been condensed or omitted. The
   Company believes that the financial statements and disclosures are adequate
   to make the information not misleading. It is suggested that these financial
   statements and notes be read in conjunction with the audited financial
   statements and notes for the year ended December 31, 1999, included in the
   Form 10-KSB filed by the Company.


NOTE B - ACQUISITION

   Pursuant to a Purchase and Sale Agreement (the "Agreement") between Webcat
   Online, Inc. ("Webcat"), Truco Enterprises, Inc. ("Truco") and Webcatalyst,
   Inc. (formerly known as StupidPC) (the "Company") dated September 29, 2000,
   the Company acquired from Truco 51% of the outstanding common stock of
   Webcat, a Texas corporation in the business of building and hosting web sites
   for small to medium size businesses, national associations, government
   entities, minority vendors and consumers. The consolidated financial
   statements include the accounts of the Company and Webcat from the date of
   acquisition. All intercompany transactions and balances have been eliminated
   in consolidation. Also, subsequent to September 30, 2000, the Company changed
   its name from StupidPC, Inc. to Webcatalyst, Inc.

   In consideration for the Webcat stock and the cancellation of approximately
   $500,000 of Webcat's indebtedness, Truco received from the Company (i)
   870,000 shares of the Company's Common Stock, no par value; and (ii) a
   warrant for the purchase of 500,000 shares of the Company's Common Stock at
   $1.00 per share; and (iii) cash of $200,000 and related expenses of $45,554.
   The warrants are exercisable immediately and expire on September 29, 2010.
   The purchase price has been allocated to the face value of assets acquired
   and the excess of purchase price over face value has been allocated to
   goodwill in the amount of $1,152,211. This goodwill is to be amortized on a
   straight line basis over 3 years. There was no amortization of goodwill for
   the three and nine months ended September 30, 2000 as the effective date of
   the acquisition was September 30, 2000. The cash portion of the acquisition
   was financed through the issuance of $675,000 of convertible debentures.

   Upon the closing of the acquisition, the Company and Truco, which after the
   acquisition own, respectively, 51% and 49% of Webcat, entered into a
   Shareholders Agreement which imposes certain restrictions on the transfer by
   either party of their stock in Webcat, and provides for a right of first
   refusal in favor of the other party in the event of a third party offer.
   Prior to the acquisition, the Company had no material relationship with
   Webcat or Truco. The required financial information relating to the
   acquisition will be filed via Form 8K prior to the Form 8K's filing deadline.


                                       9
<PAGE>   10

                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

                               September 30, 2000

NOTE C - CONVERTIBLE DEBENTURES

   8% Convertible Debentures

   On July 31, 1999, the Company issued $1,200,000 of 8% Convertible Debentures
   due June 30, 2001 (the "8% Debentures"). Proceeds were $1,200,000, less debt
   issuance costs of $132,500. In addition, the Company issued 120,000 common
   stock purchase warrants to the holders of the 8% Debentures and 100,000
   purchase warrants to a broker of the debenture transaction. The warrants,
   which expire on July 30, 2002, entitle the holder to purchase one common
   share of the common stock of the Company at the price of $5.50. The 8%
   Debentures are convertible into shares of common stock of the Company at the
   lesser of (i) $6.25 per share or (ii) 80% of the market price of the common
   stock at the conversion date. The convertible debenture holders converted
   $50,000 of the 8% debentures into 26,042 shares at a conversion price of
   $1.92 on October 20, 1999. During the nine months ended September 30, 2000,
   an additional $344,756, including accrued interest, of the 8% debentures were
   converted into 533,432 shares of common stock.

   In connection with the issuance of 120,000 stock purchase warrants to 8%
   debenture holders during 1999, the Company valued the warrants in accordance
   with SFAS No. 123, Accounting for Stock-Based Compensation utilizing the
   following assumptions: expected volatility of 86%, risk free interest rate of
   5.5%, and an expected term of three years, and allocated $323,710 of the
   proceeds to Capital Stock in accordance with APB 14, Accounting for
   Convertible Debt issued with Stock Purchase Warrants. This warrant value will
   be amortized to interest expense over the stated term of the debt which is 23
   months. The 100,000 warrants issued to a broker of the debenture transaction
   were valued at $410,809 using the Black Scholes option pricing model
   utilizing the same assumptions as described above. This value was recorded as
   deferred financing costs.

   The related deferred financing costs is included as "Other Assets" in the
   Company's balance sheet to be amortized over the stated term of the debt,
   which is 23 months upon conversion. The unamortized portion of the warrant
   value and deferred financing charges related to debentures converted is
   amortized. Amortization expense in the amount of approximately $234,000 and
   $448,000 was recorded for the three months and nine months ended September
   30, 2000, respectively. Additionally, the Company issued 376,363 shares of
   common stock to the 8% debenture holders in satisfaction of accrued interest
   and penalties in the amount of $141,136.


                                       10
<PAGE>   11

                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

                               September 30, 2000


NOTE C - CONVERTIBLE DEBENTURES - Continued

   No interest convertible debentures

   On September 18, 2000 the Company issued $675,000 of no interest Convertible
   Debentures (the "Debentures") due February 18, 2001, the proceeds of which
   are being utilized for the acquisition of Webcat Online, Inc. and working
   capital purposes. Proceeds were $675,000, less debt issuance costs of
   $108,000. In addition, the Company issued 2,227,500 common stock purchase
   warrants to the holders of the Debentures. The warrants, which expire on
   September 18, 2005, entitle the holder to purchase one common share of the
   Company at the price of $0.40. The Debentures are convertible into shares of
   common stock of the company at the lesser of (i) $0.50 per share or (ii) 75%
   of the market price of the common stock on the conversion date. The
   debentures are collateralized by 90% of the Company's 51% interest in Webcat
   Online, Inc.

   In connection with the issuance of the convertible debentures, $225,000 of
   the debt issuance proceeds were allocated to capital stock to recognize the
   beneficial conversion feature of the debentures. This debt discount was
   expensed as financing costs on September 30, 2000 based on the convertible
   debentures being immediately convertible at the option of the holder.

   In connection with the issuance of 2,227,500 stock purchase warrants to the
   debenture holders, the Company valued the warrants in accordance with SFAS
   No. 123, Accounting for Stock-Based Compensation utilizing the following
   assumptions: expected volatility of 121%, risk free interest rate of 5.85%,
   and an expected term of three years, and allocated $323,270 of the proceeds
   to Capital Stock in accordance with APB 14, Accounting for Convertible Debt
   issued with Stock Purchase Warrants. This warrant value will be amortized to
   interest expense over the stated term of the debt, which is 5 months.
   Amortization expense of $64,654 was recognized for the three and nine months
   ended September 30, 2000.

   The $108,000 deferred financing costs related to this transaction are
   included in "Other Assets" in the Company's balance sheet to be amortized
   over the stated term of the debt, which is 5 months. Amortization expense in
   the amount of approximately $8,640 related to the amortization of these
   financing costs was recorded for the three and nine months ended September
   30, 2000.


                                       11
<PAGE>   12

                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

                               September 30, 2000


NOTE D - REVENUE RECOGNITION

   Revenue from product sales of computer systems and related hardware is
   recognized upon shipment. Revenue from hosting of websites is recognized over
   the period the services are to be provided. No website hosting revenues have
   been recorded for the three months and nine months ended September 30, 2000.


NOTE E - SHORT-TERM NOTES PAYABLE

   During 1999, the Company received loans totaling $100,873 from three private
   individuals at an interest rate of 10%. Principal and accrued interest on
   these loans are due on June 21, 2001. During the quarter ended March 31,
   2000, the Company received an additional loan from a private individual in
   the amount of $65,000. Interest accrues on the loan at 10 % with principal
   and interest due August 30, 2000. All short-term notes are uncollateralized.
   During the nine months ended September 30, 2000, $95,000 of these loans were
   repaid.

   Additionally, the Company's 51% owned subsidiary has a note payable to the
   49% minority interest owner in the amount of $113,185 at September 30, 2000.
   This note accrues interest at prime plus two percent (11.75% at September 30,
   2000) with interest and principal due September 27, 2001.


NOTE F - PRIVATE PLACEMENTS

   On July 14, 2000, the Company entered into a common stock purchase agreement
   with a stockholder whereby the Company sold 130,000 shares of common stock
   and a warrant to purchase an additional 50,000 shares of the Company's common
   stock at $0.5625 per share, for $30,000. These warrants are exercisable
   immediately and expire on July 14, 2003. The proceeds of this sale were used
   to repay certain short term notes payable.

   On July 25, 2000, the Company entered into a Unit Subscription Agreement with
   another shareholder whereby the shareholder purchased 700,000 units,
   consisting of one share of common stock and one half of a stock purchase
   warrant, for $210,000. As a result of this transaction, the Company issued
   700,000 shares of common stock and 350,000 stock purchase warrants which
   entitle the holder to purchase 350,000 shares of the Company's common stock
   at $0.5625 per share. The warrants are exercisable immediately and expire on
   July 25, 2003.


                                       12
<PAGE>   13

                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

                               September 30, 2000

NOTE G - CAPITAL STOCK

   At September 30, 2000 and December 31, 1999, the Company has the following
   classes of capital stock:

       Preferred Stock - authorized 5,000,000 shares of no par value with no
        shares issued and outstanding.

       Common Stock - authorized 95,000,000 shares of no par value with
        9,079,750 and 6,236,292 shares issued and outstanding on September 30,
        2000 and December 31, 1999, respectively.


NOTE H - EMPLOYEE STOCK GRANT

   On September 29, 2000, the Company issued 6,000 shares of stock to certain
   employees. The stock vests in two years and as a result, at September 30,
   2000, the Company recorded deferred stock compensation in the amount of
   $2,250 based on the face value of shares issued, to be amortized over the two
   year vesting period.


NOTE I - COMMITMENTS AND CONTINGENCIES

   Litigation

   The Company is involved in a lawsuit where the plaintiff is alleging
   ownership of certain shares of StupidPC, Inc. prior to the original merger
   between StupidPC, Inc. and World Net Holdings, Inc. The Company's transfer
   agent is holding 440,735 shares in escrow pending the outcome of the lawsuit.
   Based on the outcome of this lawsuit, all of these shares will be issued,
   either to the plaintiff in the lawsuit or to the original shareholders of
   StupidPC, Inc. in proportion to their ownership prior to the merger.

   The Company is also involved in various claims and legal actions. In the
   opinion of management, the ultimate disposition of these matters will not
   have a material adverse effect on the Company's financial position or results
   of operations.


                                       13
<PAGE>   14

                                WEBCATALYST, Inc.
                       (Formerly known as StupidPC, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

                               September 30, 2000


NOTE J - LOSS PER SHARE

   Net loss per share was computed using the requirements of Statement of
   Financial Accounting Standards No. 128, Earnings per share, and Staff
   Accounting Bulletin No. 98. Net loss per share-basic was computed by dividing
   net loss attributable to common stock by the weighted average number of
   shares of common stock outstanding during the period. The denominator for net
   loss per share-diluted also considers the dilutive effect of outstanding
   stock options, warrants, and convertible debentures. Due to the Company's net
   loss, the amounts reported for basic and diluted are the same for both
   periods presented. Potentially dilutive securities as at September 30, 2000
   consist of 1,979,112 options exercisable at $0.20 per share and 3,747,500
   warrants exercisable at prices ranging from $0.40 to $5.50 per share.



                                       14
<PAGE>   15

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

OVERVIEW

         The following discussion should be read in conjunction with the
financial statements and accompanying notes thereto of the Company contained
elsewhere in this Quarterly Report on Form 10-QSB.

         WebCatalyst, Inc. cautions readers that certain important factors may
affect the Company's actual results and could cause such results to differ
materially from any forward-looking statements that may be deemed to have been
made in this Form 10-QSB or that are otherwise made by or on behalf of the
Company. For this purpose, any statement contained in the Form 10-QSB that is
not a statement of historical fact may be deemed to be a forward-looking
statement. Without limiting the generality of the foregoing, words such as
"may," "expect," believe," "anticipate," "intend," "could," "estimate," or
"continue" or the negative variations thereof or comparable terminology are
intended to identify forward-looking statements. Factors that may affect the
Company's results include, but are not limited to, the Company's history of
losses, its need for additional financing and its competitive marketing
environment. The Company is also subject to other risks detailed herein or
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. In this Quarterly Report on Form 10-QSB, the terms
"WebCatalyst," the "Company" and "we" refer to WebCatalyst, Inc.

         WebCatalyst designs, assembles and sells affordably-priced customized
personal computer systems and provides customized web sites for small to
medium-sized businesses, associations, and consumers. We provide a broad range
of related services, including installation, consulting, training, networking,
and customer support. The retail price of most of our computer systems does not
exceed $900 and includes one hour of in-home computer installation and training
conducted by a WebCatalyst sales technician. Our primary target market consist
of cost-conscious, first time and/or "computer-phobic" personal computer
purchasers who may be intimidated by the high-cost and multitude of computer
products and services currently available. We also market our web site products
and hosting services to small businesses and associations. We market our
products and services from two retail locations in the Atlanta area and from a
web site development and hosting services office in Dallas, Texas. In addition,
we offer consumers an e-commerce Internet-based method for ordering and paying
for our products and services through our web site at www.stupidpc.com, and the
ability to purchase web site development services at www.webcatonline.com.

         Since our inception in September 1997, we have engaged principally in
the development of the technology and activities related to the commencement of
our business operations. Accordingly, our historical results of operations are
not indicative of, and should not be relied upon, as an indicator of our future
performance.

         Our future operating results will depend on many factors, some of which
are beyond our control. If our financial results are below the expectations of
securities analysts or our investors in some future quarter, it is likely our
stock price will decline, perhaps significantly. Factors that affect our
operating results may include:

-        rate and price at which customers purchase our products;
-        amount and timing of capital expenditures and other costs relating to
         the


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<PAGE>   16


         expansion of our services and infrastructure;
-        the introduction of new products and services by us or our competitors;
-        price competition by competitors;
-        unavailability of product components;
-        loss of key employees and the time required to train replacements;
-        the overall and long-term acceptance of the Internet by individuals and
         organizations for e-commerce; and
-        general economic conditions that might cause a decrease in personal
         computer sales.

         In addition, we expect that our operating expenses will increase,
perhaps significantly, as we intend to expand our inventory, personnel and
infrastructure, open new retail outlets and improve our operational and
financial systems. If our revenues do not increase along with these expenses,
our financial condition could be seriously harmed.

         Our future operating results are likely to be adversely affected by
these and other factors. Accordingly, we believe that quarter-to-quarter
comparisons of operating results for prior periods are not meaningful. You
should not rely on the results of any one quarter as an indication of our future
performance.

RESULTS OF OPERATIONS - THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED TO THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1999

         REVENUES. Revenues for the Quarter ended SEPTEMBER 30, 2000 were
$415,527, a 53% decrease from revenues of $883,801 for the Quarter ended
September 30, 1999. Revenues for the nine months ended September 30, 2000 were
$1,870,724, a 31% decrease from revenues of $2,727,455 for the nine months ended
September 30, 1999. Revenues decreased during this period as a result of a
decrease in the number of units sold. During the Third Quarter of 2000, we sold
approximately 344 units compared with 688 units during the Third Quarter of
1999, a 50% decrease. The average price for a unit for the same periods was
approximately equal. We believe that the decrease in the number of units sold is
a result of increased competition in the lower end retail computer market and
offers of significant rebates by large retailers.

         COST OF PRODUCT SALES. Cost of product sales was $329,284 for the Third
Quarter of 2000, a decrease of 55% from cost of product sales of $730,128 for
the Third Quarter of 1999. Cost of product sales was $1,526,266 for the nine
months ended September 30, 2000, a 32% decrease from cost of product sales of
2,253,134 for the nine months ended September 30, 1999. This decrease is a
function of fewer units sold.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $238,554 for the Third Quarter of 2000, a decrease
of 54% from selling, general and administrative costs of $15,741 for the Third
Quarter of 1999. Selling, general and administrative expenses were $1,220,301
for the nine months ended September 30, 2000, an increase of 12% from $1,093,828
for the nine months ended September 30, 1999. These expenses increased primarily
as a result of increased costs for additional personnel, accounting and legal
services, as well as an increase in advertising expenditures.

         OTHER INCOME (EXPENSE). During the Third Quarter of 2000 and the nine
months ended September 30, 2000, we incurred $618,484 and $865,712 of interest
and


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financing costs, respectively, a substantial increase over the 1999 same period
expenditures of $375,394. This increase is related to the September 2000
issuance of our no interest, collateralized convertible debentures, the proceeds
of which were used for the Webcat Online, Inc. acquisition and working capital
purposes.

         INCOME TAXES. Income taxes will consist of federal, state and local
taxes, when applicable. We expect significant net losses for the foreseeable
future which should generate net operating loss carryforwards ("NOL"). However,
utilization of NOL's is subject to substantial annual limitations. In addition,
income taxes may be payable during this time due to operating income in certain
tax jurisdictions. We recognized no provision for taxes for the fiscal years
ended 1999 or 1998, as we generated net losses.

         NET LOSS. For the reasons stated above, we incurred a net loss of
$770,596, or $0.10 per share, for the Third Quarter of 2000 compared with a net
loss of $734,897 or $0.12 per share, for the Third Quarter of 1999, and a net
loss of $1,741,270, or $0.25 per share, for the nine months ended September 30,
2000 compared with a net loss of $993,069, or $0.16 per share for the nine
months ended September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

         Since inception, we have financed our operations primarily through
operations and from the sale of our securities. As of September 30, 2000, we had
an accumulated deficit of $4,102,571.

         Net cash used in our operating activities for the period was $875,843
and $619,507 for the nine months ended September 30, 2000 and the nine months
ended September 30, 1999, respectively. The net cash used in operations during
these periods was primarily due to net losses and increases in current assets,
offset by increases in accounts payable and accrued liabilities.

         We believe that the net proceeds from the sale of our no interest,
collateralized debentures and cash from operations will be sufficient to fund
our aggregate capital expenditures and working capital requirements, including
operating losses, only through the first quarter of 2001. As a result, we will
need to secure additional financing to open new retail locations or to meet
higher-than-expected product sales. We may obtain additional funding through the
sale of public or private debt and/or equity securities or through securing a
bank credit facility. We cannot guarantee that we will be able to obtain
additional financing, or that such financing, if obtained, will be on
satisfactory terms. If sufficient financing is not available or is not available
on satisfactory terms, we may be forced to sell assets or seek to refinance our
outstanding obligations. We may also be unable to:

         -        purchase computer components and equipment;
         -        take advantage of future opportunities, such as opening a new
                  retail outlet; or
         -        respond to changing consumer needs and technological
                  innovations.

         Any of these events could seriously harm our business, financial
condition and results of operations. For a description of our no interest,
collateralized debentures, see Note C - Convertible Debentures in the Notes to
our Consolidated Financial Statements September 30, 2000.

         We expect to experience substantial negative cash flow for at least the


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next several months due to continued development of our products and our
Internet distribution channel including the costs of advertising and marketing
associated with these. Our future cash requirements, as well as our revenues,
will depend on a number of factors including:

         -        the number of retail locations opened, the timing of the
                  opening and products offered;
         -        the rate at which customers purchase our products and the
                  pricing of such products;
         -        the level of marketing required to attract and retain
                  customers and to attain a competitive position in the
                  marketplace; and
         -        the rate at which we invest in engineering and development and
                  intellectual property with respect to existing and future
                  technology.

ACQUISITION OF 51% OF STOCK IN WEBCAT ONLINE, INC.

         For a description and summary of this September 29, 2000, transaction,
please see "Note B - Acquisition" in the Notes to our Consolidated Financial
Statements September 30, 2000.

NAME CHANGE

        On October 13, 2000, the Company amended its Articles of Incorporation
to effect a change of corporate name to WebCatalyst, Inc. In that connection,
the new CUSIP Number for the Company's registered Common Stock, $0.001 par
value, is 947619102.

YEAR 2000 IMPACT

         The Year 2000 problem could affect computers, software and other
equipment that we use. Accordingly, we reviewed internal computer programs and
systems to determine if they would be Year 2000 compliant. As a result of our
planning and review efforts, we experienced no significant disruptions in our
critical systems or applications, and believe those systems successfully
responded to the Year 2000 date change. We are not aware of any material
problems resulting from Year 2000 issues, either with our internal systems or
the products and services of third parties. We will continue to monitor our
critical computer applications and those of our suppliers and vendors throughout
the year 2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly.

                                     PART II

Pursuant to the Instructions to Part II of the Form 10-QSB, Items 1, 2, 3, 4 and
5 have been omitted.

                    ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following exhibits are to be filed as part of this Form 10-QSB:

         EXHIBIT NO.       IDENTIFICATION OF EXHIBIT

          Exhibit 3.1(1)   Articles of Incorporation, as amended, of
                           WebCatalyst, Inc.


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<PAGE>   19

          Exhibit 3.2(1)   Bylaws of WebCatalyst, Inc.

          Exhibit          4.1(1) See Exhibits 3.1 and 3.2 for provisions in the
                           Articles of Incorporation, as amended, and the Bylaws
                           defining the rights of the holders of common stock of
                           WebCatalyst, Inc.

          Exhibit 4.2 (1)  Specimen common stock certificate

          Exhibit 27.1     Financial Data Schedule (for SEC use only)

--------------
(1)      Filed previously on registration statement Form SB-2 SEC File No. and
         incorporated by reference herein.

(b)      Reports on Form 8-K.

         None.


                                   SIGNATURES

         In accordance with the Securities Act, this report has been signed
below by the following persons on behalf of the undersigned, thereunto duly
authorized.

                                    WebCatalyst, Inc.


Date:  November 14, 2000            By: /s/ Stephen B. Brannon
                                        -----------------------------------
                                        Stephen B. Brannon
                                        President, Chief Executive Officer,
                                        Director (Principal Executive
                                        Officer and Principal Financial and
                                        Accounting Officer)


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