U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                AMENDMENT NO. THREE

                                       TO

                                   FORM 10-KSB


   (Mark One)
      |X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
            ACT OF 1934

                    For Fiscal Year Ended: December 31, 1999

                                       OR

      |_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

            For the transition period from ________________ to ________________

            Commission file number 000-26751
                                   ---------------------------------------------

                               CyPost Corporation
                  --------------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

            Delaware                                             98-0178674
---------------------------------                            -------------------
  (State or other jurisdiction                                  (IRS Employer
of incorporation or organization)                            Identification No.)

               900-1281 West Georgia St.
              Vancouver, British Columbia                              V6E 3J7
--------------------------------------------------------------------------------
       (Address of principal executive offices)                       (Zip Code)

Issuer's telephone number (604) 904 -4422
                          ------------------------------------------------------

Securities registered under Section 12(b) of the Act: NONE
                                                      --------------------------

Securities  registered  under  Section 12(g) of the Act: Common Stock, par value
$.0001  per  share

     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
|_|     Check  if  disclosure  of  delinquent  filers in response to Item 405 of
Regulation  S-B  is  not  contained  in  this  form,  and  no disclosure will 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-KSB
or  any  amendment  to  this  form  10-KSB.  [  ]

                                     1
<PAGE>
     Aggregate  market  value  of  voting  and  non-voting common equity held by
non-affiliates  computed by reference to the average bid and asked price of such
common  equity  as  of  January  31,  2000.  $  26,470,070

     State  issuer's  revenues  for  its  most  recent fiscal year.  $ 1,020,347
                                                                     -----------

Transitional  Small  Business  Disclosure  Format  (check  one):
Yes |_|; No |X|

                    DOCUMENTS  INCORPORATED  BY  REFERENCE

     If  the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which  the  document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule  424(b)  or  (c)  of  the  Securities Act of 1933 ("Securities Act"): NONE,
however  certain exhibits hereto are incorporated by reference to the Form 10-SB
and  amendment  there to previously filed by the Registrant with the Commission.


Item Number and Caption  Page
-----------------------  ----

PART I

     1.  Description of Business...........................................

     2.  Description of Property...........................................

     3.  Legal Proceedings.................................................

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

PART II

     5. Market for Common Equity and Related Stockholder Matters...........

     6. Management's Discussion and Analysis or Plan of Operations.........

     7.  Financial Statements..............................................

     8.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure..............................................

PART III

     9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.................

     10. Executive Compensation............................................

     11. Security Ownership of Certain Beneficial Owners and Management....

     12. Certain Relationships and Related Transactions....................

     13. Exhibits and Reports on Form 8-K..................................

Item 1. Description of Business.


                                         2
<PAGE>
          (a)  Business  Development.

          CyPost Corporation (hereinafter referred to as  the  "Registrant", the
"Issuer",  or  as "CyPost"), was chartered in Delaware on September 5,1997.  The
original  name  was  "E  Post  Corporation"  but  shortly after its formation it
changed  its  name  to  minimize  potential  trademark  difficulties  with third
parties.  From  its  inception  CyPost  was  headquartered in Vancouver, British
Columbia  but  in  order  to  access  U.S.  capital  and  product markets it was
organized  as  a Delaware corporation.  On the same date as its original date of
charter,  ie.  September 5, 1997, it also organized a separate wholly owned U.S.
subsidiary,  CyPost USA, Inc.  CyPost Corporation was chartered to engage in any
lawful  activity  in  which Delaware corporations may engage but it was intended
that  it  act  primarily  as  a  holding  company  with  its business operations
conducted  through one or more subsidiaries, either in Canada, the United States
or  elsewhere.  CyPost  acquired  a  second  subsidiary, ePost Innovations, Inc.
("ePost Canada", a British Columbia corporation, from Mushroom Innovations, Inc.
("MII"), also a British Columbia corporation on September 15, 1997.  At the time
of  this  acquisition,  ePost  Innovations, Inc.  possessed certain intellectual
property  rights  and  by  virtue of the acquisition, CyPost indirectly acquired
these intellectual property rights.  Neither CyPost, CyPost USA nor ePost Canada
had  commenced  substantial  business  operations at this time and therefore all
were  considered  "development  stage  companies".  Under the terms of the ePost
Canada  transaction,  CyPost  acquired  all the issued and outstanding shares of
ePost  Canada  from  MII,  and  in  return issued 2,000,000 of its pre-split, or
3,000,000 of its post-split shares to MII.  On October 29, 1998, CyPost acquired
all  of  the  issued  and  outstanding  capital  stock of Communication Exchange
Management  Inc.  ("CEM"),  a British Columbia corporation, from MII in exchange
for  4,180,000  pre-split or 6,270,000 post-split shares of CyPost common stock.
Both  CEM  and CyPost were still development stage companies at the time of this
acquisition.  CEM  remains  a  wholly-owned  subsidiary  of  the Registrant.  In
addition,  shareholders  of  MII were also shareholders of the Registrant at the
time of the CEM acquisition.  Further details regarding the ePost Canada and CEM
acquisitions  are  set  forth  in  "Item  7.  Certain  Relationships and Related
Transactions".  CyPost  remained  a  development  stage  company until the first
quarter  of  1999  when  it  began  to  offer the first of its "Navajo" software
encryption  products.  In  February  2000,  CyPost acquired Playa Corporation, a
Japanese-based  provider  of  electronic  instant  messaging  services.  Through
various  acquisitions,  CyPost  conducts  its  business through the subsidiaries
listed  on  Exhibit  21.  (b)  Business  of  the  Issuer.

               The  Issuer  is  a holding company, the principal assets of which
consist of the capital stock of the subsidiaries listed on Exhibit 21.  To date,
the  Issuer,  through  its  operating subsidiaries, has been largely involved in
three separate, but complementary businesses, i.e.(i)the development and sale of
software  products  using  email  encryption  to  enhance  user  security  and
convenience  ("Software  Products"), (ii) providing internet connection services
to  subscribers  and  (iii)  providing instant messaging and electronic greeting
card  services.  (Unless otherwise qualified herein, the term "Company" shall be
used  to  refer  to  the  business  operations  of  the  Registrant  and  its
subsidiaries.)  The Company is currently offering three versions of its "Navaho"
software  encryption  programs  (Navaho Lock with Voice (Paid), Navaho Lock with
Voice  (Promotional)  and  ,  Navaho  Zipsafe.)  The  Company  is  developing or
partnering  with  a  number of companies to provide products and services to its
Internet  Service  provider  customers through an application server model which
promotes  server  level distribution of products rather than end user solutions.
On February 23, 2000, the Company completed the acquisition of Playa Corporation
developers  of  the "Yabumi" instant messaging and e-greeting card service.  The
"Yabumi"  community  of  users  numbers  approximately  85,000  and  is  located
primarily  in  Japan.

     Markets  for  Software  Products.

     The  Company  has  developed the Navaho family of software products for the
following  markets:

          1)  Personal  Use--consumers who have little or no technical knowledge
of  computers  and  computer  programs  but  who  wish  to  keep  electronic
correspondence  private.

          2)  Professional  Use--professional  business users such as attorneys,
accountants,  medical  doctors,  as  well  those  who  need secure communication
capability  while  traveling

          3)  Small  Businesses--companies between 10-50 employees with a small,
or  no  Information Services department and who operate out of a single location
The  Company  is  developing  software  for  a  fourth  target  audience:

          4)  Enterprise--large  businesses  with more than 50 employees and who
use  corporate  intranets  including  LAN's and WAN's, Extranets, and government
institutions

Products

     Over  the  last  two  years,  the  Company  has  discussed offering six (6)
different  security  encryption  software  products  each of which bear the name
"Navaho".  These  have  been  re-clarified and re-grouped, changing the total to
three  (3)product  offerings.  (See  discussion  of  these  under "Status of any
publicly  announced  new  product  or  service").

Distribution  Method  of  Software  Products  and  ISP  Service.

     The  CyPost  family  of  Software Products are delivered digitally over the
Internet.  CyPost's  website,  www.cypost.com,  offers a full description of its
products and the chance for viewers to make a "cyber-purchase " of its software.
In  addition,  consumers  are  able  to  purchase products directly from popular
online retail sites such as www.beyond.com, , , and www.futureshop.com to name a
few.  CyPost has entered into a distribution agreement with Digital River, Inc.,
a  company  that  provides proprietary software delivery technology to more than
2000  software publishers and online retailers.  The Company has also negotiated
with  several distribution competitors of Digital River, Inc.  who offer similar
capabilities  including  ReleaseNow.com,  NetSales,  Inc.  and ShopNow.com.  The
Company  estimates that its Navaho products are currently available at more than
1000  secure  websites.

     CyPost's  acquisition strategy includes the acquisition of Internet Service
providers  with  a  target of acquiring 50,000-100,000 subscribers to add to its
approximately  20,000  existing  subscribers.  This  network of service provider
subscribers  become a direct marketing and distribution channel for CyPost.  The
Company plans to market the Navaho family of products including Navaho Lock with
Voice  (Promotional) (formerly called Navaho Express ) to its ISP client base in
early  2000.  CyPost  will  also  distribute  a  line  of privacy and protection
solutions through industry partnerships such as content management solutions and
anti-virus  protection.

     Further  to  the  ISP  distribution  network, the Company plans to secure a
relationship  with  a  major  advertising firm to work as representatives of the
aforementioned  Navaho  Express, the promotional version of the Navaho products.
The  Company has spoken with several advertising firms, but has not entered into
any  definitive  agreements.  A  relationship  with  an  advertising  firm,  if
consummated,  would  leverage  the advertising firm's client base and their need
for  one  to  one  marketing  tools.

Status  of  any  publicly  announced  new  product  or  service.

CyPost  has  announced and or marketed the following products, over the last two
years:

Navaho  Lock  (version 2.x)
Navaho Lock with Voice (Paid)
Navaho Lock with Voice (Promotional),  formerly  known  as  Navaho Express
Navaho Viewer Navaho ZipSafe
Navaho  Office  Edition

Early  Versions  of  Software  (no  longer  available)

     Navaho Lock version 2.x: Navaho Lock 2.x was the first generation of Navaho
products  and  have now been superceeded by Navaho Lock with Voice.  These early
versions  of  Navaho  Lock software enabled consumers to send and receive secure
email  and attachments such as documents, spreadsheets, digital sound files, and
business  presentation.  The  program (many of the features available now in the
successor  products)  is  intuitive,  simple to operate, and exceptionally fast.
The  product's unique combination of features include: full integration with all
major  e-mail programs; built-in file compression for faster transmission times;
a  user-friendly  GUI  (Graphical  User  Interface);  and  CyPost's  exclusive
"drag-and-drop"  feature that enables users to encrypt and compress files simply
by  dragging  and  dropping them into an encryption field.  Users can select the
strength  of  privacy  protection according to their needs, by simply specifying
40-,  56-,  112-,  128-,  or  3DES  168-bit  encryption  algorithms.

     Navaho  Lock  is  available  for  purchase  at www.cypost.com and over 1000
secure  distribution sites on the Internet.  This product has received favorable
product reviews from PC Magazine, Portable Computing, Secure Computing Magazine,
CNN  Interactive,  and  PC  World  Online.

     Navaho  Lock  version  2.x  uses private key, or symmetric key, encryption.
Many  regard  this  as  superior  to  public key encryption.  In comparison, the
largest-selling  competing  software  relies  on  an  "asymmetric"  method  of
encryption  commonly  known  as  "public/private  key".  In a public/private key
approach,  a  publicly  available  algorithm  is  used  in  combination with two
corresponding  private keys that generally must be issued by a third party.  Not
only is public key encryption notoriously slow (approximately 1,000 times slower
than  symmetrical  encryption),  but  the  approach  also  exposes  users to the
additional  costs  and  risks involved in relying on a third party to verify the
identity  of  the  sender.

Navaho Viewer: Navaho Viewer provided an alternative for those consumers Who did
not  want  to  purchase a full working copy of Navaho Lock 2.x, but who required
the  ability  to  read  encrypted  files  sent to them by friends or colleagues.
Navaho  Viewer was available for download free at CyPost's web site and numerous
shareware  web  sites on the Internet.  This product has been replaced by Navaho
Lock  with  Voice  (Promotional)  which  offers  users  a  free  option.

Software  currently  offered  by  CyPost

     Navaho  Lock  with  Voice  (Paid  and Promotional): Released in March 2000,
Navaho  Lock  with  Voice  software  is  the  successor  to  Navaho  Lock  v2.x.
Incorporating  all  the  features of CyPost's original product, Navaho Lock with
Voice  allows  the  user  to  send and receive compressed and encrypted document
packages,  as  well  as  private  voice  messages,  over  the  Internet.

Summary  of  new  features  include:

     o     Ability  to  send  and  receive  encrypted  Voice  E-mail

     o     Addition  of a shredder for securely deleting data from the hard disk

     o     A new and improved streamlined user interface for greater ease of use

     o     Numerous  changes  to  increase  user productivity and maximize usage

Navaho  Lock  with  Voice  consists  of  two  products,  one  paid and the other
promotional.  The  paid  version retails in the same channels as Navaho Lock 2.x
for  $49.95  US.  Navaho  Lock with Voice (Promotional) differs from Navaho Lock
with  Voice (Paid) in that it is distributed to users free of charge in exchange
for  users  agreeing  to  view  advertising  supplied  within.

Navaho  Lock  with  Voice  (Promotional)  formerly known as Navaho Express: This
released  product name of the promotional version of the single user Navaho Lock
with  Voice  product  ,  was used until late 1999 however 'Navaho Express' is no
longer  being  used.  Now referred to as 'Navaho Lock with Voice (Promotional)',
it  offers  a unique one to one marketing opportunity for any business concerned
about  their  clients'  privacy  and  protection.  This  product  integrates the
functionality  of  Navaho Lock with Voice and a promotional HTML window allowing
the  sponsor  company  to  communicate  offers  and promotions directly to their
client  base.



     Navaho  ZipSafe:  (released  in  March  1999)  This file-security software,
designed  to ensure the privacy of data on laptops and home PCS, is an extension
of  CyPost's  Navaho  product  line.

     Utilizing  the  same advanced encryption and compression technology used in
Navaho  Lock  and  offering  comparable  ease-of-use features (including a user-
friendly  GUI  and similar "drag-and-drop" methodology), ZipSafe has the ability
to  encrypt  and  then  condense files by as much as 70% in a matter of seconds.
This  product  enables  users  to  secure  all  computer  files,  folders,  and
directories  on  a  local  hard  drive  such as that found on a laptop computer.
Navaho  ZipSafe  is  available  on  a  free  thirty  (30)  day  trial  basis.



Products  under  Development

Navaho  Lock Office Edition: On March 24 1999, CyPost announced the commencement
of  development  of  its  office  edition.  The  product  concept is still under
development,  but  temporarily  on hold with the focus devoted to the launch and
market  development  of  Navaho  Lock  with  Voice  (paid  and  promotional).

     Competitive  Encryption  Products

CyPost's  Navaho line of privacy and protection solutions faces competition from
a  number  of  rival products.  The largest and most noteworthy competitors are:
Network  Associates  Inc.,  InvisiMail  International  Ltd., and Baltimore.  The
following  table  compares these products to Navaho Lock with Voice version 3.0.
All information was gathered from the respective company web sites and September
1,  1999  issue  of  PC  Magazine.

<TABLE>
<CAPTION>
TABLE  2.  COMPARATIVE  ANALYSIS  OF  NAVAHO  LOCK  WITH  VOICE  3.0


FEATURE                    NAVAHO     LOCK   PGP       DATA   RPK   INVISIMAIL   MAILSECURE 2.4
                           WITH VOICE  3.0   SECURITY SUITE   DELUXE 4.0
                                             6.53
COMPANY                    CYPOST CORP.      NETWORK          INVISIMAIL INTL.   BALTIMORE
                                             ASSOCIATES
<S>                        <C>               <C>              <C>                <C>

PRICE                      $          49.95  $        $84.00  $           44.99  $         49.95
KEY STRENGTH               40/168       BIT  1024-4906   BIT  607-1279      BIT  128/2048    BIT
                           SECRET KEY        PUBLIC KEY       PUBLIC KEY         PUBLIC KEY

VOICE EMAIL                Y                 N                N                  N
DOCUMENT SHREDDER          Y                 Y                Y                  N
ENCRYPTION METHOD          SYMMETRIC         ASYMMETRIC       ASYMMETRIC         ASYMMETRIC
FILE COMPRESSION           Y                 N                Y                  N
DRAG & DROP ENCRYPTION     Y                 Y                N                  N
EXPORTABLE OUTSIDE US      Y                 Y                N                  N
X.509 CERTIFICATE SUPPORT  N                 Y                N                  Y
</TABLE>


Key Lengths With Similar Resistance to Brute-Force Attacks
 Symmetric Key Length      Public Key Length
  56 bits                           384 bits
  64 bits                           512 bits
  80 bits                           768 bits
 112 bits                          1792 bits
 128 bits                          2304 bits
 168 bits                         3840+ bits

Network Associates Inc.  (Nasdaq: NETA), a public company headquartered in Santa
Clara,  California  is  the  world's  largest  independent  network security and
management software company, and the eighth largest independent software company
with  more  than  60  million users worldwide, $683 million in revenue in fiscal
1999,  and  over  2700  employees  worldwide.

According  to  claims  made  on the Company web site, Network Associates has the
largest  market  share of email encryption software, with its PGP software being
the  most  well-known email encryption software program currently on the market.
PGP  Data  Security  Suite  ($84.00)  is  available  for purchase at the Network
Associates  owned  web  site  www.pgp.com  as well as other online vendor sites.

Notable  differences  between  PGP Data Security Suite 6.53 and Navaho Lock with
Voice  3.0  are:  1)  the lack of voice capability in PGP, 2) the lower purchase
price  of  Navaho  Lock  with Voice, 3) built in file compression in Navaho Lock
with  Voice  3.0,  and  4)  use  of symmetric key encryption in Navaho Lock with
Voice.

Baltimore  (Nasdaq:  BALT), formerly Baltimore Technologies, is a public company
with  regional  headquarters  in  Dublin  (Ireland), Needham (Massachusetts) and
Sydney  (Australia),  develops  and markets security products and services for a
wide  range  of  e-commerce  and  enterprise applications.  Its products include
Public  Key  Infrastructure  (PKI)  systems,  cryptographic  toolkits,  security
applications  and  hardware  cryptographic  devices.

Baltimore  was  formed  by  the merger in January 1999 of Baltimore Technologies
Limited and Zergo Holdings plc.  Baltimore now employs nearly 700 people in over
26  global  locations.  The  company reported unaudited pro forma group revenues
for  the  12  months  to  31 December 1998 of $30 million (More recent financial
figures  were  not  available  from the company web site nor www.freeedgar.com).

Baltimore's  email encryption software, named MailSecure is an S/MIME plugin for
Microsoft email clients, Lotus Notes and Eudora.  Unlike Navaho Lock with Voice,
MailSecure is 1) based on public key infrastructure technology, 2) does not have
built  in  voice  email  capability  and 3) lacks the ability to securely delete
documents  via  a  document  shredder.

InvisiMail  International  Ltd., founded in 1997, specializes in secure Internet
commerce  and  communications  solutions  for  a  wide  range  of  applications.
Developed  using  RPK  Security,  Inc.'s  core  technology, the RPK Encryptonite
Engine  ,  the  InvisiMail  range  of  products  supports  secure  message-based
applications  including  Client  Services,  E-Commerce,  and  EDI.

InvisiMail International Ltd., email encryption program called InvisiMail Deluxe
automatically  encrypts and decrypts e-mail using 607-1279bit public/private key
encryption  and  signs  files  using  DSA Digital File Signing.  The program was
selected  in  the  September 1999 issue of PC Magazine as the Editors Choice for
email  encryption.

     Market  -  ISP  Division

     CyPost  Network  of Service Providers: Through ISP acquisitions, CyPost has
established  approximately 20,000 ISP subscribers to date.  The Company hopes to
acquire  a  target  of  50,000  to  100,000  ISP  customers.  Its goal is not to
establish  itself  as  a  competitor  of  the large service providers, including
telecommunication and cable companies, but rather to establish a niche market in
response to the growing concerns for privacy and protection.  The CyPost network
offers a range of services including connectivity services, server co-locations,
web  hosting, email services (listservs for corporate emailings) as well as lump
sum payments for custom programming and other specific projects.  These services
will  be  extended  to  include  privacy  and  protection  solutions such as the
previously  mentioned  content  management and anti-virus solutions as well as a
number  of  other  consulting services for network security issues.  The Company
has  a  vendor  arrangement with UUNet Canada to provide connectivity across the
country  and  plans  to  enter  into  a  similar  arrangement in the U.S.  These
arrangements allow the CyPost Network of Service Providers to focus on excellent
customer  service  and security solutions rather than merely providing points of
connectivity.

     The 'niche' market that the Company hopes to serve will focus on end to end
secure  communication  services  and  solutions  for  small  to  medium  sized
businesses.  These  customers  tend  to  require additional services (as smaller
companies  are  less  likely  to have dedicated individuals to manage networking
issues,  web  programming, and other technical issues).  CyPost does not believe
that  larger ISP's will fail to address security issues altogether.  The company
does  believe  that  its  focus  on  customer service for smaller businesses and
security  will  allow  it  to  provide  a greater range of security products and
services  to  its  smaller  client  base.

     Competition  -  ISP  Division

     The  CyPost  Network  of  Service  providers  operates  in  the growing and
extremely  competitive  Internet  services market.  According to a December 1999
report  by International Data Corporation, America Online and UUNet still have a
commanding  lead  over  their competitors in their ISP market segments (consumer
and business access, respectively).  Moreover, the U.S.  ISP market is projected
to increase at a 27.9% compound annual growth rate from $17.1 billion in 1999 to
$60.5 billion in 2004.  The overall market will be driven by wholesale and value
added  services.  Wholesale  services' revenue will be highest in the early part
of  the  forecast  period,  and  value-added services, led by Web hosting , will
accelerate  in 2001 and 2002.  Business access services will increase at a brisk
pace  throughout  the  forecast  period.  Consumer Internet access services will
continue  to  grow  but  at  a  slower  rate  than  the  other  market segments.

     Our  competitors  in  connectivity,  wholesale  services  and  value  added
services  include  many  large  companies that have substantially greater market
presence, financial, technical, marketing and other resources than we have.  The
Company  competes  directly or indirectly with the following types of companies:

     -     established  online  services,  such as America Online, the Microsoft
           Network,  Earthlink  and  Prodigy;

     -     local,  regional  and  national  ISP's;

     -     national  telecommunications  companies,  such  as  AT&T  and  GTE;

     -     regional  Bell  operating  companies;  and

     -     online  cable  services.

     Competition  in  the  future is likely to increase and we believe this will
happen  as diversified telecommunications and media companies acquire ISP's, and
as  ISP's  consolidate  into  larger,  more  competitive  entities.

     Competitors  may  bundle  security  services  and  products  with  Internet
connectivity  services,  potentially  placing  the  CyPost  Network  of  Service
providers  at  a significant competitive disadvantage.  In addition, competitors
may  charge  less  than we do for Internet services, forcing us to reduce and/or
prevent  us  from  raising  our  fees.  Subsequently  future  revenue growth and
earnings  may  suffer.  CyPost will attempt to compete against such companies by
offering a combination of proprietary software as well as software from partners
to  its ISP subscribers.  While other larger ISP's offer some security solutions
(many  are  offering client-end filtering as an example) CyPost is reviewing the
entire  spectrum  of  products  and  services  available  in  house  or  through
partnerships,  to ensure the CyPost Network of Service Providers have a thorough
selection  of  security options to utilize or choose from.  Specifically, CyPost
can  offer  its  subscribers  anti-virus  filtering at the server level, content
management  filtering  (through  an  arrangement  with  LogOn  Data's  Xstop),
proprietary  email  security  products (Navaho product line), secure transaction
solutions  (custom  programming)  and  soon  to  be  delivered,  secured instant
messaging (Yabumi).  Email encryption is merely one piece of the larger security
product  line available or soon to be available to the CyPost Network of Service
Providers.

     Government  Regulation

     The  Company  believes  that the design features of the Navaho products are
unique in connecting to existing Crypto Service Providers and using them without
itself  containing  any  direct encryption coding.  Because of this feature, the
Navaho  products  fall outside of government regulations such as the munition or
export  laws  that  previously  restricted  other  forms  of software encryption
programs.  The  term  "crypto  service  provider"  is  short  for "cryptographic
service  provider"  and  refers  to the computer language by which cryptographic
standards  and  algorithms  are  implemented or used.  Different "crypto service
providers " use different programming assumptions and data formatting protocols.
Thus  one  software  encryption program may work well one type of crypto service
provider but not necessarily work well with another type.  The result is that it
is  difficult to design encryption software that will be readily compatible with
the  widely  varying  crypto service provider formats/protocols which are in use
today  in  today's  digital  communication  environment.  In  contrast, CyPost's
"Navaho" family of Software Products is readily compatible with a broad range of
provider  formats/protocols.

     Dependence  on  Key  Customers

The  Company  derives  the  majority of its revenues from its ISP and electronic
messaging  operations  and  as  such enjoys the benefit of a broadly diversified
customer  base of approximately 115,000 located throughout Ontario, the Canadian
and  Pacific  Northwest  and  in  Japan.

     With  respect  to  its  direct software sales which comprised approximately
1.5%  of its 1999 revenues, the Company has derived a significant portion of its
sales  revenues  from  a  "Preferred  Provider Contract".  Under this March 1999
agreement,  the  Canadian  Bar Association, British Columbia branch will license
250 copies of Navaho Lock and Navaho ZipSafe.  In addition, clients of these bar
members  will  be  able,  for  a  fee,  to  license  their own versions of these
programs.  This  contract  accounts  for  a significant portion of the Company's
Software  Products  revenues  to  date.

     The  Company  is  actively  seeking  to broadly market its products and has
taken  a  number  of  steps  to  actively market its products including use of a
variety  of  print  and communications media to build consumer awareness such as
direct mailings, featured appearances of Company personnel on various television
and  radio  shows  broadcast  in the U.S.  and Canada (Caspar Weinberger's World
Business  Review,  Dave Chalk's Computer Show; Dotto's Cafe, CKNW radio and CKWX
radio),  and  features  in  selected  magazines  (Security Magazine, PC Magazine
Online,  Portable  Computing,  PC Magazine OnLine, Portable Computing , Computer
Paper,  and  Canadian  Bar).

     The  Company  has  hired  a  director of marketing and anticipates hiring a
director  of  sales  in  the  near future.  In addition, during 1999 the Company
concluded  acquisitions  of  five  internet  service  providers.  See  "The 1999
Acquisitions  and  the  Company's  Broadened  Strategic  Focus".  ePost


     Research  and  Development

          The  Company  has  abandoned  its  former  development  of  the CyPost
Terminal,  a  type  of  communications  software designed to operate on a remote
terminal network.  Since December 1998, the Company has focused its research and
development efforts on refinements and/or improvements to its Software Products.
The  Company has introduced six (6) versions of its "Navaho" encryption software
during  1999.  It is currently developing English and other language versions of
the  "Yabumi"  Instant Messaging software which it acquired when it bought Playa
Corporation  in  February  of  2000.  Any  monies  expended  on  research  and
development  will  be  absorbed  directly  by  the Company and cannot be "passed
through"  to  customers  in  the     form  of  any "cost plus" type of contract.

     The  1999  Acquisitions  and  the  Company's  Broadened  Strategic  Focus

          The  Company  has  acquired five (5) Internet service providers during
1999.


<PAGE>

          Acquisition  of  Hermes  Net  Solutions,  Inc.  and  Intouch  Internet
Inc.:  Effective  June  30,  1999,  the  Company  purchased  all  the issued and
outstanding  shares  of  Hermes Net Solutions, Inc.  for a cash consideration of
$528,000  USD,  of  which $75,000 USD was paid to the seller in December 1999 as
part  of  a holdback of the purchase price as defined in the purchase agreement.
Also  effective  June  30,  1999,  the  Company  purchased  all  the  issued and
outstanding  shares  of  Intouch.Internet Inc.  for a purchase price of $293,000
USD.  The  consideration for this purchase consisted of cash of $265,000 USD and
the  issuance  of  6,570 pre-split, or 9,855 post-split, common shares valued at
$28,000  USD.  Both  acquisitions have been accounted for by the purchase method
of  accounting.  In both acquisitions, the net assets acquired included goodwill
and customer lists which will be amortized over three years on the straight line
basis.


          Acquisition  of NetRover Inc.  and NetRover Office Inc.: On October 4,
1999,  the  Company  purchased all the issued and outstanding shares of NetRover
Inc.  and  NetRover  Office  Inc.  for  a purchase price of $2,700,000 USD.  The
purchase  price was satisfied by a cash payment of $2,000,000 USD, and the issue
of  219,000  post-split  common  shares valued at $680,000 USD.  These purchases
have  been  accounted  for  under  the  purchase  method  of  accounting.

          Acquisition  of  Connect  Northwest and Internet Arena: On October 24,
1999,  the Company purchased the assets of the business of Connect Northwest for
a  net  purchase price of $1,400,000 USD.  The purchase price was satisfied by a
cash payment of $670,000 USD and the issuance of 147,985 of the Company's common
shares.  On  November  9, 1999, the Company purchased the assets of the business
of  Internet Arena for a purchase price of $600,000 USD.  The purchase price was
satisfied  by  a  cash  payment  of $242,000 USD, the issuance of 100,698 of the
Company's  post-split  common shares, and a deferred cash payment of $58,000 USD
due  in  January,  2000.  These  purchases  have  been  accounted  for under the
purchase  method  of  accounting.

          ISP's  provide  several  complementary  features  to CyPost's business
strategy.  CyPost  gains  the  advantage  of  an existing client base who, it is
hoped,  will  become significant purchasers of encryption products while the ISP
gains  the  ability  to  work hand-in-hand with an encryption services provider.
ALSO,  MUCH  OF  AN  ISP'S BUSINESS IS SERVICE-BASED AND BASED ON NINE MONTHS OF
OPERATING  HISTORY  HAVE PROVIDED predictable cash flows.  CyPost has undertaken
negotiations  to  license software which will protect against virus transmission
at  the  ISP  level  and  is developing programs to regulate content and provide
"Family  Safe  Surfing"at  the  Server  level.


          The ISP's generate monthly revenues from connectivity services, server
co-locations, web hosting, email services (listservs for corporate emailings) as
well  as  lump  sum payments for custom programming and other specific projects.
An  example  of  custom  or  specific projects is Hermes generating revenue from
creating a secure area on a web site for a graphic design firm's clients to view
their  works  in  progress,  without fear of competitor's eyes.  The bulk of the
revenue  can be attributed to connectivity currently, although the entire cypost
network  of service providers is moving towards focusing on the custom projects,
web hosting and server co-location, anticipating a strong hold over connectivity
by  the  larger  ISP's  in  a  few  years time.  Cypost is also actively seeking
further  opportunities to ally with isp's and other cyber-businesses both within
north  america  and abroad.  A brief survey of the various members of the cypost
network  of  service  providers  is  provided  below:


Hermes  Net  Solutions

Based  in  Vancouver,  British  Columbia,  Hermes services 800 business clients.
They  offer  a  range of service from connectivity (variety of dial up speeds to
adsl),  server  co-location, web hosting, custom programming and email services.

Intouch  Internet,  inc.


                                       4
<PAGE>
Based  in Vancouver, British Columbia, Intouch has 2000 residential/small office
home office ("soho") clients.  Intouch has an excellent "community" feel, and is
primarily focused on dial up connectivity, basic web hosting and email services.
Hermes  and  Intouch  have  been  integrated  (staffing  and  technically)  and
essentially  run  as  a  single  unit.

NetRover  Inc.

NetRover,  based  in  Toronto  and  chatham, Ontario, is the largest of cypost's
ISP's.  Currently  with  14,000 residential and small business clients, NetRover
offers  inexpensive packages focusing on web hosting and dial up as well as some
server  co-location.  NetRover's  management  offers  cypost  experience  with
integrating  ISP's  (they had completed 3 acquisitions when we purchased them in
October  1999).  NetRover  has  a  division  called  NetRover Office inc.  Which
focuses  more  specifically  with  the  company's  business clientele.  NetRover
currently offers dial up service through a partnership with uunet in Canada, and
has  dial  up availability across Canada.  With this national reach, Cypost will
use  the  NetRover  brand  for  expansion.

Connect  Northwest

CNW,  based  in  Mt.  Vernon and Seattle, Washington, has over 1800 business and
residential  services.  More focused on custom work, CNW's management experience
includes  ethical  hacking  and  other security monitoring.  CNW also offers web
hosting,  dial  up  and  dsl  connectivity  to  its  clients.

Internet  Arena

Internet  Arena, based in Portland, Oregon, with 1500 primarily residential/soho
clients, offers a similar range of services to Intouch Internet.  Internet Arena
was a strategic acquisition geographically as it opened up the pacific northwest
and  a  link  to  the  large  california  market.

          CyPost  is  also  actively  seeking further opportunities to ally with
ISP's  and  other  cyber-businesses  both  within  North America and abroad.  On
February  23, 2000, the Company concluded the purchase of Playa Corporation, the
developers  of  YABUMI instant messaging and e-greeting technologies.  YABUMI is
based  in Japan and with its 85,000 current users offers a promising opportunity
for  both  community-building  as  well as rolling out an integrated and private
solution  for  instant  messaging using the existing messaging technology as the
base.  The  purchase  price was $3,000,000 with $300,000 being paid in cash with
THE  BALANCE  PAID  IN  785,455  shares.


          The  Yabumi  website  at  Yabumi.com  currently generates over 500,000
visitors  per  month  and  offers several "value added" communications services.
Yabumi  "Instant  Messaging"  Software  allows  users  to  instantly  receive
ecommunications  by  way  of  a  desktop  notification.  This  allows  message
recipients  to  bypass  the  need  for  frequent checking of email mailboxes and
permits "real time messaging".  The Yabumi software to do this, Yabumi v.2.1, is
available  via  a free download and can be downloaded in approximately 2 minutes
or  less  by  a  user  using  a  56K  modem.  In  keeping  with  CyPost's design
philosophy,  the software is easy to install and its user interface is extremely
"user friendly".  In addition to its ease of use, the program also features real
time chat line capabilities and will easily allow attachment of files and URL's.
The  number  of  Yabumi  users  has grown by approximately 25% during the last 3
months  of 1999 and CyPost anticipates that an additional 100,000 Japanese users
may  be  added  by  the end of 2000.  Yabumi is particularly popular among young
Japanese women who are a demographically important group for marketing purposes,
as  they  are  considered  to  be  more receptive to innovative e-communications
products  and  therefore  are  more likely to be users of products like Yabumi..
The  Company  has  recently  introduced  a  MacIntosh-compatible  version of its
"Instant  Messaging  Software"  as well  as  a  "Business  to  Business" version
designed  for use in a networked computing  environment.


                                      5
<PAGE>
     CyPost believes that the Yabumi software can be readily "localized" for use
in  English-  language and other cultural settings.  The task of translating and
making  the  software  compatible  with existing CyPost technology.  has already
begun  and will use both internal and outsourced software development personnel.
CyPost  anticipates that English-language versions of the Yabumi technology will
be  developed  during  the  first  six  months of 2000 and will be available for
product  introduction  during  the  second  half  of  2000.


     Item  2.  Description  of  Property.

     The  Company  entered  into  a  net  lease  with  respect to its new office
premises  located  at 900-1281 West Georgia St.,Vancouver, British Columbia (the
"Premises") for approximately 6500 square feet of office space.  The term of the
lease  is  for  60 months and ends on June 1, 2005.  The monthly rent under this
lease is $12,171 CDN$ or approximately $7,911 USD.  The Company believes that it
could  secure  comparable  office  space  in  the event that it needed to do so.

     Item  3.  Legal  Proceedings.

                    On  June 11, 1999, Canada Post Corporation filed a statement
of  claim  in  the  federal  court  of  canada in which it sought injunctive and
unspecified  monetary  relief  for the allegedly "improper use by the company of
certain  marks  and  names  which  contain the component "post".  On October 18,
1999,  the  company  filed  its  defence  and  counterclaim.  In  a motion heard
November  24,  1999,  Canada  Post  Corporation  challenged certain parts of the
counterclaim  and  the  federal  court  reserved  judgment.  There  has  been no
pre-trial  discovery  and  no  trial  date  has  been  set.


     On  May  25,  1999,  the company filed a statement of claim in the BC court
seeking  a  declaration  that  the  public  notice  of Canada Post Corporation's
adoption  and  use of cyberposte and cyberpost on November 18, 1998 and December
9,  1998  respectively,  did not affect the company's use of Cypost and ePost as
trade-marks  and  trade-names  prior  to said dates.  the company sought summary
judgment for such a declaration and on September 14, 1999, the BC court rejected
summary  judgment  on the basis that no right of the company was being infringed
and  that  a trial of the issues was more appropriate.  the rejection is pending
appeal.  there  has  been no pre-trial discovery (except to the extent that some
was done as part of the summary judgment application) and no trial date has been
set.


     On  or about April 13, 2000, Steven Berry, the former CEO of CyPost brought
an  action  in  the  civil  court  of  the  State  of  New York, New York County
(Manhattan).  The  suit  alleges  claims  of  conversion,  fraud,  wrongful
cancellation,  breach  of contract and breach of fiduciary duty and names CyPost
and  Continental Stock Transfer & Trust Company as defendants, and seeks damages
of  $3 Million per claim.  It also sought injunctive relief via an Order to Show
Cause  which has been denied by the court.  The suit arises out of the Company's
cancellation  of  stock  awarded  to  Mr.  Berry  in contemplation, and upon the
condition,  of  his remaining in the employ of the Company.  Mr.  Berry resigned
from  the Company on January 17, 2000 citing personal reasons for his departure.
The  Company believes his claims to be without merit and intends to contest them
vigorously.

     Item  14:  Submission  of  Matters  to  a  Vote  of  Security  Holders.

     There  were  no  matters submitted during the fourth quarter of fiscal 1999
to a vote of security holders, through the solicitation of proxies or otherwise.


                                      6
<PAGE>
                                   PART  II

     Item  5.  Market  Price  for  Common  Equity
               and  Related Shareholder  Matters.

     1.  (a)  The Issuer's Common Stock is listed on the National Association of
Securities  Dealers, Inc.  Electronic Bulletin Board under the trading symbol of
"POST".  The  Common  Stock  became listed on September 21, 1998.  Prior to that
time,  there  had  been  no  trading  in the Issuer's Common Stock.  Pending the
resolutions  of comments previously received in the ordinary course from the SEC
when  it  filed  its Form 10-SB Registration Statement, the OTC "Bulletin Board"
has  placed  an  "E"  symbol  on  the Company's stock.  The Company has filed an
Amendment No.  1 to its Form 10-SB with the SEC.  The Company, its attorneys and
accountants  have  submitted  their  responses  to  these  SEC  comments and are
awaiting  processing  of  them  by  the SEC.  The Company is required to resolve
these  comments  with  the  SEC before April 14, 2000 in order to retain its OTC
Bulletin Board eligibility.  Should these comments not be resolved by such time,
the  Company's  Common  Stock will be removed from the OTC and will be traded in
the  "pink  sheets"  which is generally regarded as a less liquid trading forum.
The  Company  will  be  able  to  reapply  for  listing on the OTC as soon as it
resolved  all  comments  with  the  SEC.

          Accordingly,  the  high  and  low  bid  prices for the Issuer's Common
Stock  for  each  quarter  since  its  date  of listing, as reported by National
Quotation  Bureau,  LLC,  are  as  follows:

               QUARTER              HIGH BID PRICE     LOW BID PRICE
               -------              --------------     -------------

          1999 Q4 (10/01-12/31)        $6.50               $3.00

          1999 Q3 (7/1-9/30)           $8.25               $3.00



          1999 Q2 (4/1 -6/30)          $3.00               $1.78

          1999 Q1 (01/01 - 03/31)      $1.78               $0.83

          1998 Q4 (10/01- 12/31)       $0.89               $0.05


          These  quotations reflect inter-dealer prices, without retail mark-up,
mark-down  or  commission,  and  may  not  represent  actual  transactions.

               (b)  The  approximate  number  of  record holders of the Issuer's
Common  Stock  according  to  its transfer agent is 74.  included in this number

     are  shares held by Cede & Co., the nominee for Depository Trust Company, a
stock  clearing  house for financial institutions.  The Issuer has not contacted
stock  brokerage firms shown on the Issuer's stock transfer records to determine
the  number  of  beneficial holders whose stock is held in "street name", or the
name  of  the  brokerage house with which a shareholder's account is maintained.

          (c)  The  Issuer  has not paid any cash dividends on its Common Stock,
nor  does  it  intend  to  do  so  in the foreseeable future.  Under the General
Corporation  Law of the State of Delaware, the Issuer may only pay dividends out
of  capital  and surplus, or out of certain delineated retained earnings, all as
defined  in  the  General  Corporation  Law.  There


<PAGE>
     can  be  no  assurance  that  the  Issuer  will  have  such  funds  legally
available  for  the  payment  of  dividends  in the event that the Issuer should
decide  to  do so.

     (d)  On  June  30,  1999,  the  Company  issued  6,570  pre-split, or 9,855
post-split  shares of its common stock to the former owners of Intouch.Internet,
Inc.  as  partial  payment for the Company's acquisition of that company.  These
shares  were  issued  under  the  Section  4(2) exemption for transactions by an
issuer  not  involving  a  public  offering  under  the  Securities  Act.


          On  August  16,  1999,  the  Company  issued  1,000,000  pre-split, or
1,500,000  post-split, shares of its common stock to Blue Heron Venture Fund Ltd
("Blue  Heron")  pursuant  to  Regulation  S  under  the  Securities  Act.  No
underwriting  commissions, fees, or discounts were paid in connection therewith.


          On  September 29, 1999, the Company agreed to issue 219,000 post split
shares  of  its  common stock to the former owners of NetRover, Inc.  the shares
issued  in  the  Net Rover transaction were disclosed in the 8-K Report filed by
the  Company on October 2, 1999.  The shares issued in the Net Rover acquisition
were  issued pursuant to the Section 4(2) Securities Act statutory exemption for
transactions  by  an  issuer  not  involving  a  public  offering.

          On  October  26, 1999, the Company issued 147,985 shares of its common
stock to the former owners of Connect Northwest Internet Services LLC as partial
payment  for  the Company's acquisition of the assets of the business of Connect
Northwest.  These  shares  were  issued  under  the  Section 4(2) Securities Act
exemption  for  transactions  by  an issuer not involving     a public offering.


          On November 24, 1999 the Company issued 3,000,000 shares of its common
stock  to Blue Heron in consideration of which Blue Heron cancelled indebtedness
owing  from the Company in the aggregate principal amount of $3,000,000 together
with accrued interest.  These shares were issued directly to Blue Heron pursuant
to  Regulation  S under the Securities Act and no underwriting commissions, fees
or  discounts  were  paid  in  connection  therewith.


          On  November  9,  1999, the Company issued 20,140 shares of its common
stock  to  the former owners of Internet Arena, Inc.  as partial payment for the
Company's  acquisition  of  that  entity.  These  shares  were  issued under the
Section  4(2)  Securities  Act  exemption  for  transactions  by  an  issuer not
involving  a  public  offering.

     Item  6:  Management's  Discussion  and Analysis of Financial Condition and
Results  of  Operations.

     General:  End  of development stage activities and commencement of business
operations

          Cypost  produces  and markets computer privacy protection technologies
and  provides Internet conductivity to business and residential customers.  From
the  Company's inception date until approximately mid-March of 1999, the Company
was considered a development stage enterprise.  Since that time, the Company has
(i)  publicly  marketed  six (6) software encryption products under its "Navaho"
trademark,  (ii)  acquired  five  U.S.  and  Canadian Internet service providers
during  the  year  ending  December  31,     1999,  and  (iii)  acquired  Playa
Corporation,  the  developers  of  "Yabumi"


<PAGE>
     Japanese-language  instant  messaging  and  greeting  card  services,  with
an  existing  customer  base  of  85,000  customers.

The Company's results of operations for the year ending December 31, 1999 should
be  viewed  with  considerable  caution  due  to  the  following  factors:

     1)  Results  of  operations  for  the  year ending December 31, 1999 do not
reflect a full year's worth of revenues but rather six (6) months of revenues as
the Company only commenced generating revenues beginning in the third quarter of
1999.

     2)  The  Company  completed  five (5) acquisitions of ISP's and most of its
revenues  are  based  on  these.  The future growth rate of the present customer
base  cannot  be predicted with certainty and it is not certain that the Company
will  be  able  to  continue  its  strategy  of  expansion  by  acquisition.

     3)  Inherent  in any acquisitions are costs which arise from integration of
operations  into  the Company's existing business operations.  Many of these may
be  viewed  as  one-time,  non-  recurring  charges  which  are not likely to be
repeated  in  future  performance  periods.

Due  to these factors, the 1999 results of operations discussed below may not be
an  accurate  indication  of  future  performance.  In  addition,  comparison of
results  for  the  year  ended  December  31, 1999 with those for the year ended
December 31, 1998 are difficult to make due to the basic dissimilarity between a
developing  stage  company and a company that has commenced substantial business
operations.

     Results of operations for the year ended December 31, 1999 and for the year
ended  December  31,  1998.


     The  Company  commenced  substantial  business  operations during the third
quarter  of  1999 and its revenues are attributed to operations since that time.
These  revenues  are  attributable  virtually  entirely to the operations of the
various  Internet  service  providers which the Company acquired during the year
ending  December 31, 1999.  The Company generated revenues of $1,020,347 for the
year  ended  December  31,  1999.  It  had no revenues for the prior year as the
Company  was  a  development  stage  company  and  had  no  revenue  operations.

     Direct  costs  of  $563,118 for the year ended December 31, 1999 consist of
telecommunication  charges  in respect of providing internet connection services
to  customers.  Selling,  general  and administrative expenses of $2,007,779 for
the  year  ended  December  31,  1999 includes $342,888 for sales and marketing,
$707,799  for  salaries  and  benefits,  $425,604 for professional services, and
$531,488 for general and administrative expenses.  Development costs of $209,303
and  $150,382  for  the  years  ended  December  31,  1999 and December 31, 1998
respectively  represent  amounts incurred in developing the Company's encryption
software  products.  The increase in the above noted costs during 1999 over 1998
results  from  the  Company  emerging  from  the  development  stage in 1999 and
commencing  revenue  generating  activities.

     Interest  expense  of $2,212,500 for the year ended December 31, 1999 is in
respect  of  the  beneficial conversion features on convertible promissory notes
between  the  Company and Blue Heron Venture Fund, Ltd.  A beneficial conversion
feature  arises when, at the commitment date of the promissory note (the date of
agreement  to the terms of the promissory note), the convertible promissory note
is  "in-the-money" (the conversion price of the promissory note is less than the
fair  value  of the common stock into which the promissory note is convertible).
The  interest  expense  is  calculated  as the difference between the conversion
price and the fair value of the common stock, multiplied by the number of common
stock  into  which  the  promissory note is convertible (intrinsic value) at the
commitment  date  of  the  loan.

     Liquidity  and  capital  resources

     The accompanying financial statements have been prepared on a going concern
basis,  which  assumes  that the Company will continue in operation for at least
one year and will be able to realize its assets and discharge its liabilities in
the  normal  course  of business.  The Company incurred net losses of $4,491,123
for  the  year ending December 31, 1999 compared to $539,661 for the year ending
December  31,  1998.  Although  expenses  in  1999  include  non-cash charges of
$2,731,270  (amortization  and  depreciation  charges  of  $518,770 and interest
expenses  of  $2,212,500),  the  Company  has  not  generated  positive  cash


<PAGE>
flow  from  operations  in  1999.  These  factors  indicate  that  the Company's
continuation  as  a  going  concern  is  dependent upon, among other things, its
ability  to  obtain  adequate  financing.

     Although  the  Company's cash position at December 31, 1999 had improved to
$415,779,  as  compared to $47,212 at December 31, 1998, the increase in cash is
primarily  to  loans made to the Company by Blue Heron Venture Fund, Ltd.  These
loans  were  made  under agreements with that lender under which the Company may
draw  up to $16 million in unsecured loans.  These loans bear interest at 8% per
annum  and  are  payable  on  demand.  In  1999,  Blue  Heron Venture Fund, Ltd.
converted  $4,000,000 of loans to 4,500,000 shares of common stock.  At December
31,  1999  the  outstanding  loans  are  convertible at the lender's option into
Common  Stock  of  the  Company.  If the total loans of $875,000 at December 31,
1999  were  converted,  the  lender would be entitled to an aggregate of 656,250
shares  of common stock.  The lender is free to withdraw this credit facility at
any  time,  and  since  the loans are payable on demand the Company's ability to
continue  operations is dependent upon the willingness of its lender to forebear
from  demanding payment.  The Company believes that its lender will continue not
to  demand payment of the loan for the immediately foreseeable future, but it is
under  no  obligation  to do so.  Should the Company's lender demand payment the
Company  would  be required to obtain financing from other sources.  The Company
does not believe that bank borrowings are available under present circumstances,
and  there  can  be  no assurance that the necessary financing could be obtained
from  other  sources.  Even if the necessary funding were available, it might be
available  only  on  terms  which  management  would  not  find  acceptable.

     For  the  years  ended;  December 31, 1999 and 1998, the Company's net cash
used in operating activities totaled $1,180,267 and $286,276, respectively.  The
net  cash  used primarily results from a low revenue base which was insufficient
to  cover  selling,  general  and  administrative,  and  development  expenses.

     The  Company's net cash used in investing activities totaled $3,882,166 and
$27,711  for  the  years  ended  December  31, 1999 and 1998, respectively.  The
Company's  investing  activities  in  1999  included the acquisition of five (5)
businesses  for  a net cash payment of $3,612,066.  Investing activities in 1999
also  included  $270,1000  for  property  and  equipment  purchases.

     The  Company's  financing  activities  for the year ended December 31, 1999
included  $4,875,000  of  loans  provided  by Blue Heron Venture Fund, Ltd.  and
$556,000  provided  by  issuance  of  shares  of  common  stock.



Item  7.  Financial  Statements.

     Registrant's  Consolidated Financial Statements as of December 31, 1999 and
for  the  year ending December 31, 1999, and the independent auditor's report of
Arthur Andersen LLP, independent public accountant, with respect thereto, appear
in  pages  F1  -F16  of  this  Report  on  Form  10-KSB.

Item  8.  Changes  in  and  Disagreements  With  Accountants  on  Accounting and
Financial  Disclosure.

     None.  As  disclosed  in  the  8-K  filed  on  October 19, 1999, CyPost has
engaged  Arthur  Andersen  LLP  to  act  as  its  auditor.

                                   Part  III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;Compliance
with  Section  16(a)  of  the  Exchange  Act.

     Directors  of  the  Company  serve  for  a  term of one year or until their
successors  are  elected.  Officers  are appointed by, and serve at the pleasure
of,  the Board.  Profiles of the current Directors and Executive Officers of the
Issuer  are  set  forth  below:


     Robert  Sendoh,  49,  Director  and  Chief  Executive  Officer

     Mr.Sendoh  acted  as  a  Director  throughout  1999  and  in  January, 2000
succeeded to the position of Chief Executive Officer formerly occupied by Steven
Berry.  Bob has successfully conceived and operated three separate companies and
brings  a  wealth  of  business  knowledge  and  financial  understanding to the
Company.  After  receiving his B.A.  in Economics from Meiji University in Tokyo
in  1973,  he founded KKG Incorporated, a project planning and development firm,
also located in Tokyo, Japan.  KKG Incorporated was responsible for the planning
and  construction  of  major  shopping  centers,  golf  courses  and residential
complexes  around  the  world.  Dissatisfied  with  the  lack of spreadsheet and
product  management  software  for businesses, Bob developed his own, as well as
implementing  a  highly  efficient security and communication system to maintain
and  expand the reputation of his company.  After moving to Vancouver, Canada in
1991,  Bob  started his own sailing school, Windvalley Sailing School, which was
in  operation  from  February  11,  1994  to  December 1998.  He is currently an
Instructor/Director,  and  Evaluator  with  the  International  Sail  and  Power
Association,  a  non-profit  organization.

     Rounding  out  his  business expertise, since June 23, 1990, Bob has been a
co-owner  and  director  of  EFFE Sportswear USA Inc., under the corporate name;
Generator  Distribution  Company Ltd., which manufactures and markets their high
quality  snowboarding  apparel  internationally.

Carl Whitehead, 30, Director and Head of Strategic Acquisitions and Partnerships

     During  the  period  1996-99,  Carl was a corporate officer and director in
Mushroom Innovations, Inc.  and ePost Innovations, Inc., two technology-oriented
companies  the  latter  of which was acquired by CyPost.  Between 1993-97 he was
the  founder  and  owner  of  Futuresite Productions, a computer service company
which  supplies,  maintains,  and  services,  home and business computers in the
lower  mainland.  Specializing in the Windows95 environment and TCP/IP protocols
he  naturally  embraced  this  opportunity  to develop CyPost into a competitive
leader  in the software industry.  Carl has completed secondary business courses
in  accounting  and  finance.


James  T.  Johnston,  59,  Director.

     Mr.  Johnston  joined our Board in order to fill the vacancy created by the
resignation  of  Steve  Berry.  Mr.  Johnston is, and has been, a licensed pilot
for  Canadian  Airlines  for  34 years and an airline Captain for 28 years.  Mr.
Johnston  has  been active in representing the airline pilot's union in a number
of capacities and has been involved in several high-level contract negotiations.

     Steven  M.  Berry,  40,  acted  as  Director,  Chief  Executive Officer and
President  during  1999.  Mr.  Berry  resigned  from  all  positions,  including
directorships,  held with CyPost and its subsidiaries on January 17, 2000 citing
personal  reasons  for  his  departure.

Item  10.  Executive  Compensation.

     Steven M.  Berry became Chief Executive Officer and Chief Operating Officer
in  January  1999  and  received  an  annual salary of $120,000.  Mr.  Berry had
previously  rendered  consulting  services  to  the  Company prior to his formal
installation  as  Chief Executive Officer and President.  In connection with his
agreement  to  become  Chief  Executive  Officer, Mr.  Berry was awarded 400,000
pre-split,  or  600,000  post-split  shares.  Prior to that time, Carl Whitehead
exercised  primary  executive  responsibilities.  Neither Mr.  Whitehead nor any
other executive officer received cash compensation in excess of $100,000 for the
years  1997  and  1998.  For  the  year ending December 31, 1998, Mr.  Whitehead
received  cash  compensation  and  expense  reimbursement  of  $10,000.

     Mr.  Robert  Sendoh  currently  serves as Chief Executive Officer of CyPost
for  an  annual  salary  of  $82,759.

     All  directors  currently  serve  without  pay.

Item  11.  Security  Ownership  of  Certain  Beneficial  Owners  and Management.

     (a)  Security  Ownership  of  Certain  Beneficial  Owners.

     The  following  information relates to those persons known to the Issuer to
be  the beneficial owner of more than five percent (5%) of the Common Stock, par
value  $.001  per  share,  the  only  class  of  voting securities of the Issuer
outstanding.

                                      10
<PAGE>
<TABLE>
<CAPTION>
                            Name and                  Amount and
Title of                    Address of                Nature of                          Percentage
Class                       Beneficial Owner          Beneficial Ownership               of Class*
<S>                         <C>                       <C>                                <C>

Common Stock, par value     Kelly Shane Montalban     6,062,550 Million shares                29.8%
$0.001 per share            P.O Box 700,              direct and indirect beneficial
                            British Columbia VON 2EO  ownership
<FN>
     *  Based  on  20,353,538  shares  issued and outstanding.  Mr.  Montalban's holdings  indicated
above  include  shares  owned  by  Blue  Heron Venture Fund Ltd.  and  Pacific  Gate  Capital  Fund,
the  beneficial  ownership of which is attributed  to  Mr.  Montalban.
</TABLE>

     The  Company  has not contacted stock brokerage firms holding shares of the
Company's  Common  Stock  in  "street  name"  to  determine  whether  there  are
additional  substantial  shareholders of the Company.  5,314,997 shares or 26.1%
of the Common Stock outstanding is held in the name of Cede & Co., a nominee for
Depository  Trust  Company,  a  stock  clearing  house  servicing  financial
institutions.

     (b)  Security  Ownership  of  Management.

     The  number  of shares of Common Stock of the Issuer owned by the Directors
and  Executive  Officers  of  the  Issuer  is  as  follows:

<TABLE>
<CAPTION>
                            Name and                  Amount and
Title of                    Address of                Nature of                          Percentage
Class                       Beneficial Owner          Beneficial Ownership               of Class*
<S>                         <C>                       <C>                                <C>

Common stock, par value     Carl Whitehead            327,000 shares                           1.6%
$0.001 per share            20 Oceanview Road         direct ownership
                            Vancouver, British
                            Columbia VON 2EO

Common stock, par value     Robert Sendoh             330,000 shares                           1.6%
$0.001 per share            990 Beach Avenue, #304    direct ownership
                            Vancouver, British
                            Columbia V6Z 2N9

All Officers and Directors (2 persons):               657,000 shares                           3.2%
<FN>
      * Based on 20,353,538 shares issued and outstanding. Forward-Looking Statements
</TABLE>


                                     11
<PAGE>
      Item 12. Certain Relationships and Related Transactions.


          On  September  17,  1997,  CyPost purchased all of the shares of ePost
Canada.  In  return  for  such  purchase,  CyPost  issued  a  total of 2,000,000
pre-split,  or  3,000,000  post-split shares to the following individual: Robert
Sendoh 1,020,000 pre-split (1,530,000 post-split) shares; Carl Whitehead 600,000
pre-split (900,000 post-split) shares; William Kaleta 200,000 pre-split (300,000
post-split)  shares;  and Chiyoko Asanuma 180,000 pre-split (270,000 post-split)
shares.  There were no other outstanding shares at the time, and therefore, as a
result  Mr.  Sendoh  became  a  51%  stockholder,  Mr.  Whitehead  became  a 30%
stockholder,  Mr.  Kaleta  became a 10% stockholder and Ms.  Asanuma became a 9%
stockholder  of  CyPost.

          On October 29, 1998, CyPost acquired all of the issued and outstanding
capital  stock  of  Communications  Exchange Management, a Canadian corporation.
CyPost  issued  4,180,000  pre-split,  or  6,270,000  post-split,  shares to the
following  individuals:  Robert  Sendoh  480,000  pre-split (720,000 post-split)
shares;  Carl Whitehead 900,000 pre-split (1,350,000 post-split) shares; William
Kaleta  1,300,000  pre-split  1,950,000  post-split)  shares,  and  Kelly  Shane
Montalban  1,500,000  pre-split 2,250,000 post-split) shares.  These shares were
issued in proportion to the recipient's proportional share ownership in Mushroom
Innovations.  At  the  time  of this transaction, Mr.  Sendoh and Mr.  Whitehead
were  directors  of  CyPost  and  Mr.  Kaleta was an officer of Cypost.  Further
information  relating to these transactions can be found in the footnotes to the
Consolidated  Financial  Statements  of  CyPost  under  the caption "Issuance of
Common  Stock".

          CyPost  has  secured  financing through issuance of certain 8 % Demand
Notes  payable  to  Blue  Heron  Venture  Capital  Fund  Ltd.  ("Blue Heron"), a
corporation  in  which  Kelly  Shane  Montalban  is  deemed to have an "indirect
pecuniary" interest as a result of Mr.  Montalban's status as investment adviser
for  Blue Heron.  The Demand Notes are unsecured and are convertible into common
stock  at  the  lender's  option .  Between May and June of 1999, at a time when
CyPost  had virtually no operating revenues, it obtained $1 Million in financing
through issuance of these Demand Notes.  These Demand Notes were later converted
into  1,500,000  post-split  (1,000,000 pre-split) common shares .  at $0.67 per
share.  Between  July and November of 1999, the Company executed various further
demand  notes  with  similar  terms and in November 1999, an aggregate principal
amount  of  $3  Million  was  converted  into  3,000,000  post-split  (2,000,000
pre-split)  common  shares at $1.52 per share.  Each borrowing and the execution
of  the  associated  Demand  Note  was  approved  by a disinterested majority of
Directors.

          In connection with its February 2000 acquisition of Playa Corporation,
CyPost  borrowed  an additional $300,000 from Blue Heron, the terms of which are
substantially  similar  to  those  described  above.

     Item  13.  Exhibits  List  and  Reports  on  Form  8-K.

     (a)  Exhibit  No.    Description
          -----------     -----------

          2               Certificate of Incorporation of Registrant (previously
                          filed  with  10-SB  on  July  19,  1999)

          2.1             Certificate  of  Amendment  to  Certificate  of
                          Incorporation  of Registrant  (previously  filed  with
                          10-SB on July 19, 1999)


                                 12
<PAGE>
          2.2             Amended  and  Restated  Certificate  of  Incorporation
                          (previously  filed  with  10-SB  on  July  19,  1999)

          2.3             ByLaws (previously filed with 10-SB on July 19, 1999)

          6.1             Preferred  Supplier  Agreement  with  Canadian  Bar
                          Association  (previously filed with Amendment No. 1 of
                          10-SB)

          6.2             Lease  re:  CyPost  headquarters  (W.  Georgia  St.)
                          (Omitted  -  will  be  supplied  on  request)

          8.1             Acquisition  Agreement  dated as of September 17, 1997
                          between the Issuer and ePost Canada (previously filed)

          8.2             Share  Purchase Agreement dated as of October  29,1998
                          between  the  Issuer  and  Mushroom  Innovations, Inc.
                          (previously  filed)

          8.3             Share  Purchase  Agreement  dated  as of June 30, 1999
                          regarding  acquisition  of  Hermes Net Solutions  Inc.
                          shares  (previously  filed)

          8.4             Share  Purchase  Agreement  dated  as of June 30, 1999
                          regarding acquisition of Intouch.Internet Inc.  shares
                          (previously filed with  Amendment  3 of 10-SB on April
                          14, 1999)

          8.5             Acquisition  agreement  dated  as  of  October  4 1999
                          between the issuer and Net Rover Inc (previously filed
                          with 8-k on october 12, 1999)

          8.6             Acquisition  agreement  dated  as  of October  4, 1999
                          between  the  issuer  and  Net  Rover  Office  Inc
                          (previously  filed  with  8-k  of  Netrover  Inc.  On
                          October 12, 1999)

          8.7             Acquisition  agreement  dated  as  of October 26, 1999
                          between  the  issuer  and  Connect Northwest  Services
                          (previously filed with  8-K  on  November  12,  1999)

          10              Consent of Thomas Monahan, Certified Public Accountant

          21              List  of  Subsidiaries

          23              Consent  of  Arthur  Andersen  LLP,  Certified
                          Public  Accountants

          27              Financial  Statement  Schedule



<PAGE>
FILED  WITH  THE  COMMISSION  ON  OCTOBER  12,  1999.

     ***** INCORPORATED BY REFERENCE FROM THE FORM 8-K FILED WITH THE COMMISSION
ON  NOVEMBER  12,  1999.

10-SB  filed  with  the  Commission  on  March  9,  2000.

     (b)  The  Registrant  filed  the  following  8-K  Reports  during  the last
          quarter  of  1999:

          1.  October  12, 1999 re: acquisition of Net Rover Inc.  and Net Rover
              Office  Inc.

(Item  2)

          2.  October  19, 1999 re: change in Registrant's Certifying Accountant

(Item  4)

          3.  November  12,  1999  re: acquisition of Connect Northwest Services
              LLC  assets

(Item  2)

                                   SIGNATURES

          In  accordance  with  Section  12  of  the  Securities Exchange Act of
1934,  the registrant caused this registration statement to be signed on     its
behalf  by  the  undersigned,  thereunto  duly  authorized.

                              CYPOST  CORPORATION

     DATE:  MAY  30,  2000               By:  /s/  Robert Sendoh
                                              ----------------------------
                                              Robert Sendoh
                                              Chief  Executive  Officer


                                                                              14
<PAGE>
================================================================================

                    REPORT  OF  INDEPENDENT  PUBLIC  ACCOUNTANTS

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

To  the  Shareholders  of

CYPOST  CORPORATION:

We  have  audited  the  accompanying  consolidated  balance  sheet  of  Cypost
Corporation  (a  Delaware  corporation)  as of December 31, 1999 and the related
consolidated  statements  of operations, cash flows and shareholders' equity for
the  year  then ended.  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  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States.  Those  standards  require that we plan and perform the
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 that our audit provides a reasonable basis
for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  financial  position  of  CyPost Corporation as of
December  31,  1999 and the results of its operations and its cash flows for the
year  then  ended in accordance with accounting principles generally accepted in
the  United  States.

The  accompanying  consolidated financial statements have been prepared assuming
that  the Company will continue as a going concern.  As described in Note 1, the
Company  has  incurred  operating  losses  since  its  inception  and  requires
additional financing to continue operations.  These conditions raise substantial
doubt  about the Company's ability to continue as a going concern.  Management's
plans  in  regard  to  these  matters are described in Note 1.  The consolidated
financial  statements  do  not  include  any  adjustments  relating  to  the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of  liabilities  that may result should the Company be unable to
continue  as  a  going  concern.

The  consolidated  financial statements of CyPost Corporation as of December 31,
1998  and  for  the  periods  ended  December  31, 1998 and 1997 were audited by
another  auditor  whose  report  dated  March  12, 1999 expressed an unqualified
opinion  with  an  explanatory  going  concern  paragraph  on  those statements.

"ARTHUR  ANDERSEN  LLP"

Vancouver,  British  Columbia
March  23,  2000.


                                                                              15
<PAGE>

<TABLE>
<CAPTION>
                               CYPOST CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998
                                 (U.S. Dollars)


                                                            1999          1998
                                                        ------------  -----------
<S>                                                     <C>            <C>

ASSETS

CURRENT ASSETS

  CASH . . . . . . . . . . . . . . . . . . . . . . . .  $    415,779   $  47,212
  ACCOUNTS RECEIVABLE, NET OF ALLOWANCE FOR

  DOUBTFUL ACCOUNTS OF $34,000 (1998- $NIL). . . . . .       233,188          --
  PREPAIDS AND DEPOSITS. . . . . . . . . . . . . . . .       173,319      27,998
                                                        ------------  -----------

                                                             822,286      75,210
PROPERTY AND EQUIPMENT, NET. . . . . . . . . . . . . .       599,582      22,330

GOODWILL AND OTHER INTANGIBLES, NET OF

  AMORTIZATION OF $458,758 (1998- $NIL). . . . . . . .     5,036,785          --

OTHER ASSETS . . . . . . . . . . . . . . . . . . . . .        69,389      28,657

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

                                                        $  6,528,042   $ 126,197

  LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

  ACCOUNTS PAYABLE . . . . . . . . . . . . . . . . . .  $    849,300   $  11,090
  ACCRUED LIABILITIES. . . . . . . . . . . . . . . . .       133,937          --
  LOANS. . . . . . . . . . . . . . . . . . . . . . . .       875,000          --
  DEFERRED REVENUE . . . . . . . . . . . . . . . . . .       626,143          --
  PURCHASE OF INTERNET ARENA . . . . . . . . . . . . .       240,000          --
                                                        ------------  -----------

                                                           2,724,380      11,090
                                                        ------------  -----------
SHAREHOLDERS' EQUITY

  SHARE CAPITAL
    AUTHORIZED

      5,000,000 PREFERRED STOCK WITH A PAR VALUE OF $.001
      30,000,000 COMMON STOCK WITH A PAR VALUE OF $.001

    ISSUED AND OUTSTANDING
      NIL PREFERRED STOCK

      20,246,480 COMMON STOCK (1998- 13,264,500) . . .        20,246      13,264
  PAID-IN CAPITAL. . . . . . . . . . . . . . . . . . .     8,814,002     624,416
  DEFICIT. . . . . . . . . . . . . . . . . . . . . . .    (5,047,662)   (556,539)
  CURRENCY TRANSLATION ADJUSTMENT. . . . . . . . . . .        17,076      33,966
                                                        ------------  -----------

                                                           3,803,662     115,107
                                                        ------------  -----------

                                                        $  6,528,042   $ 126,197
                                                        ============  ===========
</TABLE>




Approved by the Directors:

 ............../s/ Carl Whitehead......................................  Director

 ............../s/ Robert Sendoh.......................................  Director

        The  accompanying  notes  are an  integral  part of these  consolidated
financial statements.


<PAGE>
<TABLE>
<CAPTION>
                               CYPOST CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (U.S. Dollars)


                                                                        Period From
                                                                        September 5,
                                         YEAR ENDED      Year Ended        1997 to
                                         DECEMBER 31,    December 31,    December 31,
                                             1999            1998            1997
                                         ------------    ------------    ------------

<S>                                      <C>             <C>             <C>
REVENUE ..............................   $  1,020,347    $       --      $       --

DIRECT COSTS .........................        563,118            --              --
                                         ------------    ------------    ------------

                                              457,229            --              --
                                         ------------    ------------    ------------

EXPENSES

   SELLING, GENERAL AND ADMINISTRATIVE      2,007,779         383,046            --
   AMORTIZATION AND DEPRECIATION .....        518,770           6,233            --
   DEVELOPMENT .......................        209,303         150,382         16,878
                                         ------------    ------------    ------------

                                            2,735,852         539,661         16,878
                                         ------------    ------------    ------------

                                           (2,278,623)       (539,661)       (16,878)

INTEREST EXPENSE .....................      2,212,500            --              --
                                         ------------    ------------    ------------

NET LOSS .............................   $ (4,491,123)   $   (539,661)   $   (16,878)
                                         ============    ============    ============


LOSS PER SHARE, BASIC AND DILUTED ....   $      (0.28)   $      (0.07)   $     (0.02)
                                         ============    ============    ============

WEIGHTED AVERAGE NUMBER OF

   SHARES OUTSTANDING ................     15,816,232       7,720,603         961,644
                                         ============    ============    ============
</TABLE>

         The  accompanying  notes  are an  integral  part of these  consolidated
financial statements.


                                                                              17
<PAGE>
<TABLE>
<CAPTION>
                               CYPOST CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (U.S. Dollars)


                                                                           Period From
                                                                           September 5,
                                              YEAR ENDED     Year Ended     1997 to
                                              DECEMBER 31,   December 31,  December 31,
                                                  1999           1998           1997
                                              ------------   -----------    -----------
<S>                                           <C>            <C>            <C>

CASH FLOWS FROM OPERATING
   ACTIVITIES

      NET LOSS ............................   $(4,491,123)   $  (539,661)   $   (16,878)
      Add items not affecting cash
         AMORTIZATION AND DEPRECIATION ....       518,770          6,233           --
         INTEREST EXPENSE .................     2,212,500           --             --
         NON-CASH EXPENSES ................          --          207,500           --
                                              ------------  -------------   ------------
                                               (1,759,853)      (325,928)       (16,878)
      Changes in non-cash operating
         accounts
             ACCOUNTS RECEIVABLE ..........       (90,017)          --             --
             PREPAIDS AND DEPOSITS ........      (109,550)       (27,998)          --
             OTHER ASSETS .................       (15,972)        58,523           --
             ACCOUNTS PAYABLE .............       583,787          9,125          1,965
             ACCRUED LIABILITIES ..........        61,417           --             --
             DEFERRED REVENUE .............       149,921           --             --
                                              ------------  -------------   ------------
Net cash provided by (used in)
operating activities                           (1,180,267)      (268,713)         1,965
                                              ------------  -------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES
      Acquisitions of businesses, less cash
         THEREIN OF $115,953 ..............    (3,612,066)          --             --
      PROPERTY AND EQUIPMENT, NET .........      (270,100)       (27,711)          (852)
                                              ------------  -------------   ------------
Net cash used in investing
activities                                     (3,882,166)       (27,711)          (852)
                                              ------------  -------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES
      LOAN ................................     4,875,000           --            --
      SALE OF COMMON STOCK ................       556,000        323,000         20,000
Exchange rate changes on Cash in
Foreign currency                                     --          33,966           --
                                              ------------  -------------   -----------
Net cash provided by financing
Activities                                      5,431,000        356,966        20,000
                                              ------------  -------------   -----------

NET INCREASE IN CASH ..........................   368,567         42,977         4,235
CASH, BEGINNING OF PERIOD .................        47,212          4,235          --
                                              ------------  -------------   -----------

CASH, END OF PERIOD .......................   $   415,779    $    47,212    $    4,235
                                              ============  =============   ===========

CASH PAID DURING THE PERIOD FOR
   INTEREST ...............................   $      --      $      --      $     --
   INCOME TAXES ...........................          --             --            --
</TABLE>

         The  accompanying  notes  are an  integral  part of these  consolidated
financial statements.


                                      18
<PAGE>
<TABLE>
<CAPTION>
                                                  CYPOST CORPORATION
                                    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                     (U.S. Dollars)


                                                                            Additional                 Currency
                                                           COMMON STOCK       Paid-in                  Translation
                                                         NUMBER    AMOUNT     CAPITAL      DEFICIT     Adjustment       TOTAL
                                                      ----------  --------  -----------  ------------  ------------  -----------
<S>                                                  <C>          <C>       <C>          <C>           <C>           <C>
Incorporation date, September 5, 1997
    Issued for acquisition of
       ePost Innovations, Inc. ....................   3,000,000   $  3,000  $   (1,000)  $       --                  $    2,000
    ISSUED ON SALE OF UNITS .......................     600,000        600      19,400           --                      20,000
    Net loss                                                                                 (16,878)                   (16,878)
                                                      ----------  --------  -----------  ------------  ------------  -----------
Balance, December 31, 1997 ........................   3,600,000      3,600      18,400           --        --             5,122
    Issued on sale of units .......................   2,400,000      2,400      77,600           --        --            80,000
    Issued for cash ...............................      57,000         57      18,943           --        --            19,000
    Issued for legal services .....................      22,500         22       7,478           --        --             7,500
    Issued for acquisition of
      Communication Exchange Management, Inc. .....   6,270,000      6,270      (2,090)          --        --             4,180
    Issued for exercise of warrants ...............     915,000        915     243,085           --        --           244,000
    Offering expenses .............................         --         --      (20,000)          --        --           (20,000)
    Share transfer for services                             --         --      281,000           --        --           281,000
    NET LOSS ......................................         --         --          --       (539,661)      --          (539,661)
    Currency translation adjustment                         --         --          --                       33,966       33,966
                                                      ----------  --------  -----------  ------------  ------------  -----------
Balance, December 31, 1998 ........................   13,264,500    13,264     624,416      (556,539)       33,966      115,107
    Issued for acquisition of Intouch.Internet Inc.        9,855        10      28,515           --            --        28,525
    Issued for acquisition of NetRover Inc.
      and NetRover Office Inc. ....................      219,000       219     679,324           --            --       679,543
    Issued for acquisition of Connect Northwest ...      147,985       148     659,852           --            --       660,000
    Issued for acquisition of Internet Arena ......       20,140        20      59,980           --            --        60,000
    Issued for loan conversion ....................    4,500,000     4,500   3,995,500           --            --     4,000,000
    Issued for exercise of warrants ...............    2,085,000     2,085     553,915           --            --       556,000
    Beneficial conversion feature on loans ........          --        --    2,212,500           --            --     2,212,500
    NET LOSS ......................................          --        --          --     (4,491,123)          --    (4,491,123)
    Currency translation adjustment                                                --            --        (16,890)     (16,890)
                                                      ----------  --------  -----------  ------------  ------------  -----------

BALANCE, DECEMBER 31, 1999 ........................   20,246,480  $ 20,246  $8,814,002   $(5,047,662)  $    17,076   $ 3,803,662
                                                      ==========  ========  ===========  ============  ============  ===========
</TABLE>


         The  accompanying  notes  are an  integral  part of these  consolidated
financial statements.


<PAGE>
                               CYPOST CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999
                                 (U.S. Dollars)

1.    NATURE OF OPERATIONS AND GOING CONCERN

     CyPost  Corporation  was  formed on September 5, 1997 under the laws of the
State  of  Delaware and its head office is located in Vancouver, Canada.  CyPost
Corporation  and  its  subsidiaries  (the  "Company")  generate  revenues  from
value-added  protected  internet  connection  services,  web-site  hosting,
advertising  sales,  promotional  opportunities,  and  sales  of  privacy  and
protection  products.  The  Company's  activities  also  include determining the
feasibility  of     encryption  software products, beginning initial programming
and  product  development,  conducting  market research, and undertaking various
private  placement offerings.  The Company emerged from the development stage in
1999  and  commenced  revenue  generating  activities.

     The  accompanying  consolidated  financial statements have been prepared on
the basis of accounting principles applicable to a "going concern", which assume
that  the  Company  will continue in operation for at least one year and will be
able to realize its assets and discharge its liabilities in the normal course of
operations.

     Several  conditions  and  events  cast doubt about the Company's ability to
continue  as  a  "going  concern".  The  Company  has incurred net losses before
interest  expense  of  approximately  $2.5 million for the period from inception
September  5,  1997  to December 31, 1999, has a working capital deficiency, and
requires  additional  financing for its business operations.  As of December 31,
1999,  the  Company  has  $11.1  million of funding available which can be drawn
against  a  promissory note agreement with a lender; however, the lender has the
option,  at  any  time,  to  withdraw  its  offer  to  lend  this  amount.

     The  Company's  future capital requirements will depend on numerous factors
including,  but  not  limited  to, continued progress in developing its software
products,  and  market  penetration  and profitable operations from its internet
connection services.  The Company is actively pursuing alternative financing and
has  had  discussions  with  various third parties, although no firm commitments
have  been  obtained.  Management  is  also  pursuing  acquisitions  of  other
businesses  with  existing  positive  cash  flows.  In  addition,  management is
working  on  attaining  cost  and  efficiency  synergies  by  consolidating  the
operations  of  the  businesses  acquired.

     These  financial  statements  do  not  reflect  adjustments  that  would be
necessary  if  the  Company were unable to continue as a "going concern".  While
management  believes  that  the  actions  already taken or planned, as described
above,  will  mitigate the adverse conditions and events which raise doubt about
the validity of the "going concern" assumption used in preparing these financial
statements,  there  can  be  no assurance that these actions will be successful.

     If  the  Company  were  unable  to  continue  as  a  "going  concern", then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported revenues and expenses, and the
balance  sheet  classifications  used.


<PAGE>
2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     CONSOLIDATION


     The  consolidated  financial  statements  include  the  accounts  of CyPost
Corporation  and its subsidiaries.  The principal subsidiaries, all of which are
wholly  owned,  include  ePost  Innovations Inc., NetRover Inc., NetRover Office
Inc.,  Hermes  Net  Solutions  Inc.  and  Intouch.Internet  Inc.


     FOREIGN  CURRENCY  TRANSLATION

     The  functional  currency  of  the Company is U.S.  dollars.  Balance sheet
accounts  of  international  self-sustaining subsidiaries, principally Canadian,
are  translated  at  the  current  exchange  rate  as of the balance sheet date.
Income  statement  items  are  translated  at  average exchange rates during the
period.  The  resulting  translation  adjustment  is  recorded  as  a  separate
component  of  shareholders'  equity.

     USE  OF  ESTIMATES

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

     FINANCIAL  INSTRUMENTS

     The  Company  has, where practicable, estimated the fair value of financial
instruments  based  on  quoted  market  prices  or  valuation techniques such as
present  value  of estimated future cash flows.  These fair value amounts may be
significantly  affected by the assumptions used, including the discount rate and
estimates  of  cash  flow.  Accordingly,  the  estimates  are  not  necessarily
indicative  of  the amounts that could be realized in a current market exchange.
Where these estimates approximate carrying value, no separate disclosure of fair
value  is  shown.

     PROPERTY  AND  EQUIPMENT

     Property  and  equipment  are stated at cost less accumulated depreciation.
Depreciation is computed over the estimated useful lives using the straight-line
method over a period of five years.  Maintenance and repairs are charged against
operations  and  betterments  are  capitalized.

     EARNINGS  (LOSS)  PER  SHARE


     Earnings  (loss)  per  share has been computed in accordance with SFAS 128.
Basic  earnings  (loss)  per  share  is  computed  by dividing net income (loss)
attributable  to  common  shareholders  by the weighted average number of common
shares  outstanding  during the respective periods.  Diluted earnings (loss) per
share  is  computed  similarly,  but  also  gives  effect  to  the  impact  that
convertible  securities,  such  as  warrants,  if  dilutive,  would  have on net
earnings  (loss)  and  average  common  shares  outstanding  if converted at the
beginning  of the year.  The effects of potential common shares such as warrants
would  be  antidilutive  in  each  of  the  periods presented in these financial
statements.


     At  December  31,  1999, there are no warrants outstanding (1998-2,085,000)


<PAGE>
2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     REVENUE  RECOGNITION  AND  DEFERRED  REVENUE

     The  Company's primary source of revenue is earned from internet connection
services.  For  contracts  which  exceed  one  month, revenue is recognized on a
straight-line  basis  over  the  term  of the contract as services are provided.
Revenues  applicable  to  future  periods  are  classified  as deferred revenue.

     DIRECT  COSTS

     Direct  costs consist of telecommunications charges in respect of providing
internet  connection  services  to  customers.  These  costs  are  expensed  as
incurred.

     SELLING  AND  MARKETING  COSTS


     Selling  and  marketing costs are expensed as incurred and totaled $342,888
and  $0  for  the  years  ended December 31, 1999 and 1998, respectively.  These
costs  are  reported  under  selling, general and administrative expenses on the
statement  of  operations.


     SOFTWARE  DEVELOPMENT  COSTS

     Under  SFAS  No.  86,  "Accounting for the Costs of Computer Software to Be
Sold,  Leased,  or  Otherwise  Marketed", capitalization of software development
costs begins upon the establishment of technological feasibility of the product,
which  the  Company  has  defined as the completion of beta testing of a working
product.  The  establishment  of  technological  feasibility  and  the  ongoing
assessment of the recoverability of these costs require considerable judgment by
management  with respect to certain external factors, including, but not limited
to,  anticipated  future  gross  product  revenue,  estimated  economic life and
changes in software and hardware technology.  No software development costs have
been  capitalized  by  the  Company  to  date.

     GOODWILL  AND  OTHER  INTANGIBLE  ASSETS

     Intangible  assets consist primarily of customer lists and goodwill related
to  acquisitions  accounted  for  under  the  purchase  method  of  accounting.
Amortization  of  these  purchased  intangibles is provided on the straight-line
basis  over  the  respective  useful  lives  of  the  intangible assets which is
estimated  to  be  three  years.

     The  Company  identifies and records impairment losses on intangible assets
when  events and circumstances indicate that such assets might be impaired.  The
Company  considers  factors  such  as  significant  changes in the regulatory or
business  climate  and  projected  future  cash  flows.  Impairment  losses  are
measured  as  the  amount  by which the carrying amount of the asset exceeds the
fair  value  of  the  asset.

     INCOME  TAXES

     The  Company  computes  income  taxes using the asset and liability method,
under  which  deferred  income  taxes are provided for the temporary differences
between  the financial reporting basis and the tax basis of the Company's assets
and  liabilities.  Deferred  tax  assets  and  liabilities  are  measured  using
currently  enacted tax rates that are expected to apply to taxable income in the
years  in  which  those  temporary  differences  are expected to be recovered or
settled.  A valuation allowance is established when necessary to reduce deferred
tax  assets  to  the  amounts  expected  to  be  realized.


<PAGE>
2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     RECLASSIFICATIONS

     Certain reclassifications have been made to conform prior years' figures to
the  current  year  presentation.

     ACCOUNTING  FOR  DERIVATIVE  INSTRUMENTS  AND  HEDGING  ACTIVITIES

     SFAS  No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities",  requires  the  recognition  of all derivatives as either assets or
liabilities  and  the  measurement of those instruments at fair value.  SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
the  Effective  Date of SFAS No.  133", issued in August 1999, postpones for one
year  the  mandatory  effective date for adoption of SFAS No.  133 to January 1,
2001.

     The  Company  does  not  currently  engage in derivative trading or hedging
activities;  hence,  SFAS  No.  133  and  SFAS No.  137 will not have a material
impact  on  its  financial  position  or  results  of  operations.

     STOCK-BASED  COMPENSATION

     SFAS  No.  123,  "Accounting for Stock-Based Compensation", encourages, but
does not require, companies to record compensation cost for stock-based employee
compensation  under  a  fair  value  based  method.  Alternatively,  stock-based
employee  compensation  can  be accounted for under APB No.  25, "Accounting for
Stock  Issued  to  Employees",  under  which  no  compensation  is  recorded.

     The  Company  has  not  granted any stock-based compensation for any of the
periods  presented  in  these  financial  statements.

     PENSIONS  AND  OTHER  POSTRETIREMENT  BENEFITS

     SFAS  No.  132,  "Employers'  Disclosures  about  Pensions  and  Other
Postretirement  Benefits,  an amendment of FASB Statements No.  87, 88 and 106",
revises  employers'  disclosures  about pension and other postretirement benefit
plans.  It  does  not  change the measurement or recognition of those plans.  It
standardizes  the  disclosure  requirements for pension and other postretirement
benefits  to  the extent practicable, requires additional information on changes
in  benefit  obligations  and  fair  values  of plan assets that will facilitate
financial  analysis,  and  eliminates  certain  disclosures  that  are no longer
considered  useful.

     The  Company  does  not offer any pension or other postretirement benefits.

     RECENT  ACCOUNTING  PRONOUNCEMENTS


     In  March  1998,  the  American  Institute  of Certified Public Accountants
issued  Statement  of  Position  98-1  (SOP  98-1), "Accounting for the Costs of
Computer  Software  Developed  or  Obtained  for  Internal  Use".  SOP  98-1  is
effective  for financial statements for years beginning after December 15, 1998.
SOP  98-1  provides  guidance over accounting for computer software developed or
obtained  for  internal  use  including  the requirement to capitalize specified
costs  and  amortization of such costs.  The implementation of SOP 98-1 does not
have  a  material  impact  on  the  Company's  financial  position or results of
operations,  as  the  Company  has  not incurred any costs for computer software
developed  or  obtained  for  internal  use.



<PAGE>
2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     In  April  1998,  the  American  Institute  of Certified Public Accountants
issued  Statement  of  Position  98-5  (SOP  98-5),  "Reporting  on the Costs of
Start-Up  Activities".  SOP  98-5, which is effective for fiscal years beginning
after  December  15,  1998,  provides  guidance  on  the  financial reporting of
start-up costs and organization costs.  It requires costs of start-up activities
and  organization  costs  to be expensed as incurred.  The implementation of SOP
98-5  does  not  have  a  material impact on the Company's financial position or
results  of  operations.

     In  December  1999,  the  Securities and Exchange Commission released Staff
Accounting  Bulletin  (SAB)  No.  101,  "Revenue  Recognition  in  Financial
Statements", to provide guidance on the recognition, presentation and disclosure
of  revenues  in  financial  statements.  The  Company  believes  its  revenue
recognition  practices  are  in conformity with the guidelines prescribed in SAB
No.  101.

3.  ACQUISITIONS

     During  1999,  the  Company  completed  a  number  of  business  and  asset
acquisitions.  These  acquisitions  are accounted for using the purchase method,
and  accordingly, these consolidated financial statements include the results of
operations  from  the  date  of  acquisition  of  each  respective  business.

     NETROVER  INC.  AND  NETROVER  OFFICE  INC.

     On October 4, 1999, the Company acquired all of the shares of NetRover Inc.
and  NetRover  Office  Inc.  for  Cdn.  $4  million  (U.S.  $2.7  million).  The
consideration  for  the  purchase  included  cash  of Cdn.  $3 million (U.S.  $2
million)  and  219,000  shares  of  common  stock  for  Cdn.  $1  million  (U.S.
$680,000).  NetRover  Inc.  and  NetRover  Office  Inc.  are  based  in Toronto,
Canada.

     The  purchase included goodwill and other intangibles of Cdn.  $4.2 million
(U.S.  $2.9  million)  which will be amortized on a straight-line basis over its
estimated  useful  life  of  three  years.

     HERMES  NET  SOLUTIONS  INC.

     On  June  30,  1999,  the  Company acquired all of the shares of Hermes Net
Solutions  Inc.  for  cash  consideration  of  Cdn.  $777,000  (U.S.  $528,000).
Hermes  Net  Solutions  Inc.  is  based  in  Vancouver,  Canada.

     The  purchase  included  goodwill  and  other intangibles of Cdn.  $644,000
(U.S.  $437,000)  which  will  be  amortized  on  a straight-line basis over its
estimated  useful  life  of  three  years.

     INTOUCH.INTERNET  INC.

     On  June  30,  1999,  the  Company  acquired  all  of  the  shares  of
Intouch.Internet  Inc.  for  Cdn.  $428,000 (U.S.  $293,000).  The consideration
for  the  purchase  included  cash  of Cdn.  $386,000 (U.S.  $265,000) and 9,855
shares  of  common  stock  for  a  value  of  $42,000  (U.S.  $28,000).

     Intouch.Internet  Inc.  is  based  in  Vancouver,  Canada.

     The  purchase  included  goodwill  and  other intangibles of Cdn.  $470,000
(U.S.  $322,000)  which  will  be  amortized  on  a straight-line basis over its
estimated  useful  life  of  three  years.


<PAGE>
3.   ACQUISITIONS  (CONTINUED)

     INTERNET  ARENA

     On  November  9, 1999, the Company purchased certain assets and liabilities
of  the  business  of  Internet  Arena  for $600,000.  The consideration for the
purchase included cash of $242,000, amount payable of $58,000 and 100,698 shares
of common stock for a value of $300,000.  As of December 31, 1999, 20,140 shares
of  common  stock were issued and the remaining 80,558 were issued subsequent to
year  end.  Internet  Arena  is  based  in  Oregon,  United  States.

     The purchase included goodwill and other intangibles of $536,000 which will
be  amortized  on  a straight-line basis over its estimated useful life of three
years.

     CONNECT  NORTHWEST

     On  October  27, 1999, the Company purchased certain assets and liabilities
of  the  business  of Connect Northwest for $1.4 million.  The consideration for
the  purchase  included  cash of $670,000, amount payable of $70,000 and 147,985
shares  of  common stock for a value of $660,000.  Connect Northwest is based in
Washington  State,  United  States.  The  purchase  included  goodwill and other
intangibles  of  $1.3  million  which will be amortized on a straight-line basis
over  its  estimated  useful  life  of  three  years.

     During 1998 and 1997, the Company completed two business acquisitions which
are  described  below.


     ePost  INNOVATIONS,  INC.

     On  September  17,  1997,  the  Company acquired ePost Innovations, Inc., a
wholly-owned  subsidiary  of  Mushroom  Innovations,  Inc.  ("Mushroom").  The
Company  and  Mushroom  have  officers  and  directors  in  common.

     The  Company issued 3,000,000 post-split shares of common stock to Mushroom
in  consideration  for  all  of  the  issued  and  outstanding  shares  of ePost
Innovations, Inc.  The shares of common stock were valued at $.001 per share for
an  aggregate  consideration  of  $2,000.  The  Company acquired all the rights,
title and interest to all the assets owned by ePost Innovations, Inc., and those
assets  consisted of proprietary knowledge of various computer software products
under  development  by  ePost  Innovations,  Inc.


     The  transaction  has been accounted for as a related party transfer and is
accounted for using historic costs (as if the entities had always been together)
with  the  recording  of the net assets acquired at their historical book value.
Operating  results  prior  to  the  date  of  acquisition  were not significant.

     COMMUNICATION  EXCHANGE  MANAGEMENT,  INC.

     On  October  29,  1998,  the  Company  acquired  Communication  Exchange
Management,  Inc.  ("CEM"),  a  subsidiary  of  Mushroom.  The  Company  issued
6,270,000 post - split shares of common stock valued at $4,180 for consideration
of  all  of  the  issued  and  outstanding  stock  of  CEM.

     The  transaction  has been accounted for as a related party transfer and is
accounted for using historic costs (as if the entities had always been together)
with  the  recording  of the net assets acquired at their historical book value.
Operating  results  prior  to  the  date  of  acquisition  were not significant.


<PAGE>
4.   PROPERTY  AND  EQUIPMENT

      Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                                             1999             1998
                                                                                        -------------     -------------

<S>                                                                                     <C>               <C>
      OFFICE AND COMPUTER EQUIPMENT                                                     $  1,008,405      $     28,563
         LESS- ACCUMULATED DEPRECIATION                                                     (408,823)           (6,233)
                                                                                        -------------     -------------

                                                                                        $    599,582      $     22,330
                                                                                        =============     =============
5.    GOODWILL AND OTHER INTANGIBLES

      Goodwill and other intangibles consist of the following:

                                                                                             1999             1998
                                                                                        -------------     -------------

      CUSTOMER LISTS                                                                    $  3,663,000      $          -
      GOODWILL                                                                             1,832,543                 -
                                                                                        -------------     -------------

                                                                                           5,495,543                 -
         LESS- ACCUMULATED AMORTIZATION                                                     (458,758)                -
                                                                                        -------------     -------------

                                                                                        $  5,036,785      $          -
                                                                                        =============     =============
</TABLE>

6.    LOANS

      During 1999, the Company  borrowed  $4,875,000  pursuant to two promissory
note  agreements.  The  loans are unsecured,  bear interest at 8% per annum, and
the  principal and accrued  interest are due on demand.  The lender may elect to
convert  the  loans  into  shares  of  common  stock  of the Company as follows:

                              SHARES
PRINCIPAL           PRE-SPLIT        POST-SPLIT

$  1,000,000        1,000,000         1,500,000

   3,000,000        2,000,000         3,000,000

     875,000          437,500           656,250


      At the commitment  dates of the promissory  notes,  the conversion  prices
were  less  than  the  fair  values  of  the common  stock,  hence a  beneficial
conversion  feature  is attached to these convertible  notes. The amount of this
beneficial  conversion  feature  is $2,212,500 and has been recorded as interest
expense  and  additional  paid-in-capital  for  the  year  ended  December  31,
1999.


<PAGE>
6.    LOANS  (CONTINUED)

      During  1999,  $4,000,000  of loans were settled by the issuance of common
stock  valued  at  $4,000,000.  At  December  31,  1999,  the  loans  balance is
$875,000.  Subsequent  to  year  end,  the  Company  borrowed  an  additional
$625,000  against  the  promissory  note.  This  will  result  in  an  interest
charge  for  the  beneficial  conversion  feature  of  $243,750  in  the  first
quarter  of  2000.

      The fair values of the loans at December 31, 1999 are not  practicable  to
estimate  because  of  the  conversion  features  associated  with  the  loans;
accordingly,  it  is  not  possible  to  estimate  the  present  value  of  the
future  cash  flows  with  any  reasonable  degree  of  precision.

      Subsequent  to  year  end,  the  lender  has  offered  to  lend a  further
$10,000,000  to  the  Company  under  similar  terms  except  that the loans are
convertible to 4,000,000  shares of common stock at a conversion  price of $2.50
per  share.  The lender has the option to withdraw  its offer to lend any amount
of  the  $10,000,000  at  any  time.


7.    SHARE CAPITAL

      AUTHORIZED STOCK

      The Company is authorized to issue:

      (a)   30,000,000  shares  of common  stock at a par  value of  $0.001  per
            share.

      (b)   5,000,000  shares  of  preferred  stock at a par  value of $.001 per
            share.  The Board of  Directors  of the Company  has the  authority,
            without further action by the holders of the  outstanding  shares of
            common stock,  to issue shares of preferred  stock from time to time
            in one or more  classes  or  series,  to fix the  number  of  shares
            constituting  any class or series and the stated value, if different
            from the par  value,  and to fix the  terms of any  such  series  or
            class,  including  dividend  rights,  dividend rates,  conversion or
            exchange  rights,  voting  rights,  rights  and terms of  redemption
            (including  sinking fund  provisions),  the redemption price and the
            liquidation  preference of such class or series.  The  designations,
            rights and preferences of any shares of preferred stock would be set
            forth in a Certificate of Designation  which would be filed with the
            Secretary of State of the State of Delaware.

      SHARE SPLIT

     On  September 24, 1999, the Company effected a three-for-two subdivision of
its  shares of common stock.  All share, per share, unit, and warrant amounts in
the  accompanying  financial statements have been adjusted retroactively to give
effect  to  this  subdivision.

     COMMON  STOCK  SUBSCRIBED


     As at December 31, 1999, the Company is obligated to issue 80,558 shares of
common  stock valued at $2.98 per share as consideration for the purchase of the
assets of Internet Arena and this obligation has been reported as a liability of
$240,000 on the balance sheet.  These shares were issued subsequent to year end.



<PAGE>
7.    SHARE CAPITAL (CONTINUED)

      SALE OF UNITS AND WARRANTS

     In  1997,  the  Company  offered  for  sale  to  persons  who  qualified as
"accredited  investors"  as  defined  under  Regulation  D  promulgated  by  the
Securities and Exchange Commission 3,000,000 units at $0.05 per unit.  Each unit
consists  of one share of the Company's common stock and one warrant to purchase
one  share  of  common  stock  at  $0.27  per  share.

     In  1997,  the  Company  sold  600,000 units for aggregate consideration of
$20,000.  In  1998, the Company sold an additional 2,400,000 units for aggregate
consideration  of  $80,000  less  offering  expenses  of  $20,000.

     During  1998, the Company issued 915,000 shares of common stock through the
exercise  of  915,000  warrants  for aggregate consideration of $244,000.  As of
December  31,  1998,  2,085,000  warrants were outstanding.  These warrants were
exercised  for  2,085,000 shares of common stock during 1999 and at December 31,
1999,  there  are  no  warrants  outstanding.

     PRIVATE  PLACEMENT


     Pursuant  to  a private placement pursuant to Rule 504 of Regulation D, the
Company  offered  on  March 26, 1998, 57,000 shares of common stock at $0.33 per
share.  As  of  On  May  5, 1998, the Company sold an aggregate 57,000 shares of
common  stock  for  an  aggregate consideration of $19,000.  On May 5, 1998, the
Company  sold 22,500 shares of common stock pursuant to Rule 504 of Regulation D
to Kaplan Gottbetter and Levenson, LLP in consideration for $7,500 in legal fees
valued  at  $0.33  per  share.


8.   INCOME  TAXES

     In  accordance  with  SFAS 109, "Accounting for Income Taxes", income taxes
are  accounted  for under the liability method.  Under this method, deferred tax
assets and liabilities are determined based on differences between the financial
statement  reporting  and  the  tax bases of the assets and liabilities, and are
measured  at  the  enacted tax rates that will be in effect when the differences
are  expected to reverse.  Such differences principally arise from the timing of
income  and  expense  recognition  for  accounting  and  tax  purposes.

     The  application  of  SFAS  109  does  not  have any material effect on the
assets,  liabilities,  or  operations  for  the  periods  presented  in  these
consolidated  financial  statements.  Deferred  tax  assets  arising  from  the
Company's net operating loss carryforwards have been fully offset by a valuation
allowance.


<PAGE>
8.   INCOME  TAXES  (CONTINUED)


     At  December 31, 1999, the Company has net operating loss carryforwards for
income  tax  purposes  of approximately $2,800,000 which are available to offset
future  taxable income.  The Company's utilization of these carryforwards may be
restricted  due  to  changes  in ownership of subsidiaries during the year.  The
components  of  the  deferred  tax asset as of December 31, 1999 and 1998 are as
follows:

<TABLE>
<CAPTION>
                                                                  1999             1998
                                                             --------------    --------------

<S>                                                          <C>               <C>
      NET OPERATING LOSS CARRYFORWARDS                       $    1,260,000    $      82,000
         LESS- VALUATION ALLOWANCE                                1,260,000           82,000
                                                             --------------    --------------

                                                             $           -     $           -
                                                             ==============    ==============
</TABLE>

9.     COMMITMENTS AND CONTIGENCIES

       Litigation

       Subsequent to year end, the former president of the Company filed various
       Legal  claims  against  the  Company  and the Company's transfer agent in
       respect of the ownership of 600,000 shares of common stock of the Company
       awarded to him.

       The Company believes  that  the  claims  are without merit and intends to
       contest them vigorously.  No amounts have been accrued in  the  financial
       statements  in  respect to these claims, and the outcome of the claims is
       not determinable.



Lease  Commitments

     The  Company  leases  office space and equipment, and its lease payments in
the next  five  years  and  thereafter  are  as  follows:

      2000                                                   $    1,236,000
      2001                                                        1,091,000
      2002                                                          293,000
      2003                                                          122,000
      2004                                                          109,000
      THEREAFTER                                                     55,000
                                                              -------------
                                                             $    2,906,000
                                                             ==============


<PAGE>
10.   PRO FORMA DISCLOSURES ON BUSINESS COMBINATIONS (UNAUDITED)

     As  described  in  Note 3, the Company completed various business and asset
acquisitions  during 1999.  The following presents unaudited pro forma financial
information  as  though each of the transactions occurred on January 1, 1999 and
1998.  This  pro  forma  financial  information  include
     adjustments giving effec  to goodwill  amortizations  associated  with  the
     acquisitions  and  interest  expense  on  debt  incurred  to  finance  the
     acquisitions.


      PRO FORMA  CONDENSED  STATEMENT OF OPERATIONS  FOR THE YEAR ENDED DECEMBER
      31, 1999

<TABLE>
<CAPTION>
                                                         CYPOST           HERMES            INTOUCH         NETROVER
<S>                                                  <C>               <C>              <C>               <C>

      Revenue                                        $      13,000     $     428,000    $     322,000     $   1,812,000
      Net income (loss)                                 (4,050,000)           24,000           35,000           138,000

                                                                         INTERNET           CONNECT
                                                                           ARENA           NORTHWEST          TOTAL

      Revenue                                                          $     537,000    $     653,000      $  3,765,000
      Net income (loss)                                                      (53,000)         (90,000)       (3,996,000)

      Loss per share                                                                                              (0.25)

      PRO FORMA CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998

                                                         CYPOST           HERMES            INTOUCH         NETROVER

      Revenue                                        $         -       $     205,000    $     406,000      $  1,852,000

      Net income (loss)                                   (276,000)           90,000          (22,000)           11,000

                                                                         INTERNET           CONNECT

                                                                           ARENA           NORTHWEST          TOTAL

      Revenue                                                          $     342,000    $     535,000      $  3,340,000

      Net income (loss)                                                     (221,000)         (29,000)         (447,000)

      Loss per share                                                                                              (0.06)
</TABLE>

11.   NON-CASH INVESTING AND FINANCING ACTIVITIES

      Loans of $4 million  were  converted  into  shares of common  stock of the
Company.


<PAGE>
12.   SUBSEQUENT EVENT

      ACQUISITION OF PLAYA CORPORATION

     On  February  23,  2000,  the  Company  completed  the acquisition of Playa
Corporation  (a  Japan  company),  developer  of  Yabumi  instant  messaging and
e-greeting  card  services.  The  acquisition  totals  $3  million, comprised of
$300,000  in  cash  and  $2.7  million  in the Company's shares of common stock.


<PAGE>