SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2000
                                       OR
[ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number 001-15241

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

                Nevada                                      33-0786959
     (State or other jurisdiction                          (IRS employer
   of incorporation or organization)                     Identification No.)

                              104-106 The Chambers
                        Chelsea Harbour, London SW10 0XF
                                     England
                    (Address of principal executive offices)

                               011-44-20-7871-0000
               Registrant's telephone number, including area code

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

     Title of Each Class:          Name of Each Exchange on Which Registered
     --------------------          -----------------------------------------
             None                                     None

          Securities registered pursuant to Section 12(g) of the Act:
                                  Common Stock
                                (Title of Class)

     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           No   X
    ------       ------

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-B 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. [ ]

     State issuer's revenues for its most recent fiscal year: $20,792

     State the aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60 days:  $2,608,660 as of June 6, 2001 (at the
closing price on that date).

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of June 6, 2001:  14,137,937 shares of common stock, par value
$.001 per share.


<PAGE>
                                     PART I

Item 1.  Description of Business

Forward-looking Statements

     This Annual Report includes  forward-looking  statements within the meaning
of Section 21E of the  Securities  Exchange  Act of 1934 (the  "Exchange  Act").
These  statements  are based on  management's  beliefs and  assumptions,  and on
information  currently  available  to  management.   Forward-looking  statements
include  statements  in which words such as  "expect,"  "anticipate,"  "intend,"
"plan," "believe," estimate," "consider," or similar expressions are used.

     Forward-looking  statements are not guarantees of future performance.  They
involve risks,  uncertainties and assumptions.  The Company's future results and
stockholder   values  may  differ  materially  from  those  expressed  in  these
forward-looking  statements.  Many of the  factors  that  will  determine  these
results and values are beyond the Company's  ability to control or predict.  For
these  statements,  the  Company  claims the  protection  of the safe harbor for
forward-looking statements contained in Section 21E of the Exchange Act.

History

     YellowBubble.com,   Inc.,  a  Nevada  corporation  (the  "Company"),  is  a
development stage company. The Company was incorporated in Nevada on February 5,
1998,  under the name "Mall of Fame, Inc." and changed its name on September 15,
1998 to "Famous  Internet Mall,  Inc." The Company was formed for the purpose of
creating  and  designing  an  interactive  web site that would  allow the public
access to an  Internet  shopping  mall to market  and sell the  products  and/or
services of celebrities.

     On February 6, 1998, the Company sold 3,000,000 shares of its common stock,
par  value  $.001  (the  "Common  Stock"),  to  a  then  officer  and  director,
Christopher  Lucidi, for an aggregate of $3,000, and commenced an offering of up
to 2,000,000  shares of Common Stock at a price of $0.05 per share,  pursuant to
Rule 504  promulgated  under  the  Securities  Act of  1933.  The  offering  was
completed  in March 1998,  at which time the Company  sold  2,000,000  shares of
Common  Stock for an aggregate  of $100,000  (realizing  net proceeds of $98,000
after deducting expenses of the offering).

     Following the offering and throughout  1999, the Company  concentrated  its
efforts on the  creation of its web site which became  operational  during 1999.
However, the Company did not transact any business through this web site.

     In  November  1999,  the  Company's  Board of  Directors  declared  a stock
dividend of 1.5 shares of Common Stock for each issued and outstanding  share of
Common Stock. Unless otherwise indicated, all share and per share data set forth
below gives effect to such stock dividend.

     On December 10, 1999,  Christopher  Lucidi sold 7,400,000  shares of Common
Stock (representing  approximately 60% of the total then issued and outstanding)
to John Meyer for an  aggregate of $2,960.  In  connection  with such sale,  Mr.
Lucidi and the then other  officer and director of the Company  resigned and Mr.
Meyer was elected the sole director and officer of the Company. As a result, Mr.
Meyer became the controlling shareholder of the Company.

     After  reviewing  the Company's  business plan and the capital  required to
implement such plan, Mr. Meyer concluded that the Company should consider all of
its  strategic  alternatives,  including  the  possible  acquisition  of  a  new
business.  Negotiations  were  commenced  to  acquire  all  of  the  issued  and
outstanding  capital  stock of  YellowBubble.com  Holdings  Limited,  a  company
incorporated  under the laws of England  ("Holdings").  In  anticipation of such
acquisition,  in late  December  of 1999  the  sole  director,  Mr.  Meyer,  and
shareholders  of the  Company  approved  a  change  in  the  Company's  name  to
YellowBubble.com  Inc., which change of name, because of a technical defect, did
not become effective until February 28, 2000.

     On February 16, 2000, the Company  entered into a Share Exchange  Agreement
(the "Exchange  Agreement")  with the five  shareholders  of Holdings:  Narinder
Dhillon; Gordon Barry McFadzean; David Frank Henderson Scroggie; Prashant Naresh
Patel, and The Continental  Trust Company Limited  (collectively,  the "Holdings


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<PAGE>

Shareholders").  Under  the  terms  of  the  Exchange  Agreement,  the  Holdings
Shareholders  agreed to transfer to the Company on the closing date all of their
shares in Holdings  in exchange  for the  issuance  to them of an  aggregate  of
8,163,000  shares  of  Common  Stock,  which  after  giving  effect  to  certain
transactions   contemplated   thereunder   would   represent  in  the  aggregate
approximately  61.5% of the issued and outstanding shares of Common Stock on the
closing date,  subject to the prior fulfillment of certain terms and conditions.
Included among such terms and conditions were the repurchase by the Company from
existing  shareholders of an aggregate of 7,400,000  shares of Common Stock at a
price per share not to exceed $.0004 (the "Share  Repurchase") and the execution
of a  subscription  agreement  with an  investor  providing  for a  three  phase
purchase of an aggregate of 342,000  shares of Common Stock at $14.625 per share
provided certain milestones were achieved (the "Financing").

     The Company and the  Holdings  Shareholders  completed  the share  exchange
under  the  Exchange  Agreement  (the  "Share  Exchange")  on March 2, 2000 (the
"Closing Date"). As contemplated  under the Agreement,  on or before the Closing
Date, the Company completed the Share Repurchase for an aggregate  consideration
of $740 ($.0001 per share) and the 7,400,000 shares repurchased were canceled.

     In addition,  pursuant to the Exchange Agreement,  Narinder Dhillon,  David
Frank Henderson Scroggie and Prashant Naresh Patel were elected directors of the
Company, and John Meyer resigned as a director of the Company.  Narinder Dhillon
was appointed the  Company's  Chief  Executive  Officer.  David Frank  Henderson
Scroggie was appointed the Company's  Executive Vice President,  Chief Financial
Officer  and  Secretary.  Prashant  Naresh  Patel was  appointed  the  Company's
Marketing Director.

     As also contemplated under the Exchange Agreement, on or before the Closing
Date,  the Company  entered  into a  subscription  agreement  with an  unrelated
private  investor (the  "Purchaser"),  pursuant to which the Purchaser agreed to
effect the Financing as follows:

          On the Closing  Date,  the  Company  issued to the  Purchaser  102,600
     shares of Common Stock for an aggregate  consideration  of $1,500,525  (the
     "Closing Financing").  The proceeds of this phase of the Financing had been
     deposited  into  escrow  for the  benefit  of a  creditor  of  Holdings  in
     repayment  of a  $473,000  bridge  loan  pending  completion  of the  Share
     Exchange.  These  funds were  released  from escrow to such  creditor.  The
     balance was  released to the Company and has been used for working  capital
     purposes.

          On the Closing  Date,  Purchaser  deposited  into escrow an additional
     $1,500,525  in payment of the  purchase of 102,600  shares of Common  Stock
     (the  "Second  Phase").  These  funds were to be  released  to the  Company
     provided that YellowBubble.com Limited, a wholly-owned operating subsidiary
     of  Holdings  ("Yellowbubble"),  reached  certain  milestones  (the  "First
     Milestones")  set forth in the  Agreement  on or before June 30, 2000 ( the
     "Milestone  Date").  These milestones related primarily to the registration
     of new  members,  implementation  of  Yellowbubble's  marketing  plan,  the
     recruitment  of  additional  personnel and the  engagement of  professional
     consultants. The Second Phase was completed prior to the Milestone Date.

          If the First  Milestones were reached on or before the Milestone Date,
     simultaneous  with the  closing  of the  Second  Phase  the  Purchaser  was
     obligated  to deposit in escrow a further  $2,000,700  for the  purchase of
     136,800 shares of Common Stock by the Milestone Date (the "Third Phase") if
     Yellowbubble  reached certain additional  milestones  relating primarily to
     the  registration  of  additional  new  members,   the   implementation  of
     Yellowbubble's  business plan and the  commissioning of a consumer research
     program.  Since the Company was  approximately one week late in meeting the
     milestone required for the completion of the Third Phase, Purchaser did not
     complete  the  purchase  of shares  under the Third  Phase.  In August  the
     Company and an assignee of Purchaser reached agreement as to a new schedule
     for the  issuance  of  shares  to such  entity  and the  payment  therefor.
     Pursuant to this  agreement,  the Company  issued  500,000 shares of Common
     Stock for  $2,000,000 in five tranches  which  issuances  were completed on
     December 15, 2000.

Description of Business

     The Company is a network  marketing  company with a broad  customer base, a
scaleable business model and a sophisticated  core-technology.  This enables the
Company to provide a range of market offerings, including:



                                       3
<PAGE>

     o    a business  opportunity  for  network  marketing  specialists  to sell
          discounted  products  and  services  into  both  commercial  (B2B) and
          consumer (B2C) markets, and

     o    a software  application for on-line advertisers to reach specific user
          groups.

Products

     The Company's  B2C model is designed to produce a number of income  streams
based upon  recruiting,  motivating  and  managing a  large-scale  community  of
members across Europe both on-line  (Consumers) and off-line (Network  Marketing
Distributors),  trading a range of  consumer-based  products and  services.  The
applications   also  provide  an  opportunity   for   complementary   commercial
organizations  who have not  developed  their own  technology  as a  channel  to
market.  These  organizations may be able to achieve improved market penetration
by using the  Company's  established  services.   With the  ability  to build an
off-line presence with independent distributors as well as an on-line community,
the Company believes that it has moved towards its goal of positioning itself as
a dynamic portal.

     The Company is currently offering the following products:

     1.   The  Bargain  Lounge - A group  buying  portal  managed  by one of the
          Company's  strategic  partners that enables the  Company's  members to
          purchase  highly  discounted  products  directly  from  the  strategic
          partner.  Most of the products  offered through the Bargain Lounge are
          brand name consumer products and include computers, home entertainment
          devices,  jewelry,  furniture  and  health and  beauty  products.  The
          Company  generates  revenues  through  the  Bargain  Lounge  by  sales
          commissions paid by the strategic partner offering the products.

     2.   BubbleCentres  - A customized  website  personalized  for  independent
          distributors of the products  offered through the Bargain Lounge aimed
          at assisting them in carrying out sales,  marketing and administration
          activities for their individual  distributors.  The Company  generates
          revenues  through the  BubbleCentres  by charging  the  businesses  an
          annual   sign-up  fee  that  will  provide   these   entities  with  a
          registration   and   their   own   BubbleCentres.    The   independent
          distributors,  or BubblePros,  who sign up for the BubbleCentres share
          in the  commissions  generated  by the  Company to the extent that any
          purchases are made through their websites.

     In addition,  the Company intends to introduce a  second-generation  search
engine and dedicated  business  directory  listing  before the end of June 2001.
This search engine has been developed in association with a software development
company and gives both surfers and businesses a faster and more direct access to
each other compared to conventional search facilities. The Company believes that
the market demand for this service is high. This service will be offered at less
than half the price of similar services offered by its nearest competitor.

     The Company's B2B model is based upon  achieving a regular,  growing annual
income flow through the sales of core application  software and licensing of its
advanced technology. Under this model, the Company offers the following:

     1.   SmartBubble - A fully customizable PDO (permanent desktop object) that
          is an executable  file and easily hosted on a web site and that can be
          integrated into a company's current service.  It may be distributed to
          users  through  banners,  text links,  placement on CD-ROMs or bundled
          with other software.  The SmartBubble offers a powerful search engine,
          email,  free  software  and  downloads,  chat room,  competitions,  an
          Internet Guide and a bargain lounge, offering an array of products and
          services.  It tracks  users' online  activity and enables  websites to
          deliver  ads,  network  alerts  and  personalized   content  to  them,
          regardless  of  where  the  users  may be on the  web.  It is  able to
          incorporate  a  site's  branding,   products,   services  and  content
          partnerships.  It helps to maximize  revenue  from users when they are
          away from a site as well as building a rich profile of their  behavior
          and interests.  The Company  believes that market  segments that would
          benefit  from the  SmartBubble  software  are ISPs  (Internet  service
          providers), Content Providers and E-commerce enablers. The benefits to
          them  are  increased  revenue   generation   through  targeted  banner
          advertising,   E-commerce   revenue  sharing, permission-based   email
          campaigns and software/content distribution,  i.e., charging users for
          the SmartBubble.

                                       4
<PAGE>

     2.   SmartBubble Logic - The advanced  profiling  technology that fuels the
          Company's software that can be readily implemented as a complete or an
          integrated  component of any existing business  software  application.
          The same market segments utilizing  SmartBubble have the option to use
          the SmartBubble Logic in conjunction with the PDO.

European and International Expansion

     The Company is  currently  seeking  second  round  financing of up to US$15
million.  In calendar  year 2001,  the  Company  plans to set up  operations  in
Germany,  Austria and Switzerland  assuming that the Company's  resources permit
such expansion.  To this end, in August 2000, the Company  acquired Aladin AG, a
German publicly held entity without operations.  At a later stage,  expansion is
contemplated  into other  important  markets in the  European  community  as new
funding and income generation allow.

Competition

     The Company believes that its SmartBubble technology allows it to build its
business on an original  concept  aimed at  combining  the tested  strengths  of
network  marketing with the dynamic  growth of the Internet.  The Company is not
aware of any significant competition in its chosen market place.

Employees

     As of December 31, 2000, the Company had a total of 10 employees, 9 of whom
are full-time. Of these persons, six are in operations,  marketing and technical
support, while all others are in accounting,  administration and management.  No
employees are subject to any collective bargaining agreements.

     Our future success depends on our continuing  ability to attract and retain
highly  qualified  technical,  sales and managerial  personnel.  Competition for
these personnel is intense.  Due to the limited number of people  available,  we
cannot assure you that we can retain or attract key personnel in the future.

Item 2.  Properties

         The Company's  executive offices and its principal office are in leased
premises at 104-106 The Chambers,  Chelsea  Harbour,  London SW10 0XF. The lease
expires in July 2010. The monthly lease payments are (pound)5,240 (approximately
$7,940), including services and VAT (value added tax).

     The Company  also  maintains a small office to provide  accommodations  and
meeting  facilities  necessary for ongoing business dealings in London.  Monthly
payments under the  month-to-month  lease amount to  approximately  (pound)1,200
(approximately $1,820).

Item 3.  Legal Proceedings

         None that are required to be disclosed.

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

         None.



                                       5
<PAGE>

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

         Market Information

         Prior to  November  1999,  there was no public  trading  market for the
Company's  Common Stock.  From November 22, 1999 to January 3, 2000,  the Common
Stock was included for quotation on the OTC Bulletin Board  ("OTCBB")  under the
symbol  "FIMI",  under the symbol "YBBL" from January 4, 2000 to April 25, 2001,
and under the  symbol  "YBBLE"  from  April 26,  2001  until May 30,  2001.  The
Company's  failure to comply  with NASD Rule  6530,  relating  to the  Company's
reporting  obligations with the Securities and Exchange Commission,  resulted in
the Company's Common Stock being temporarily  delisted from the OTCBB on May 31,
2001. The Company  intends to satisfy the NASD  requirements  to have its Common
Stock relisted as soon as practicable.

         For the periods indicated,  the high and low closing bid prices for the
Company's Common Stock were as follows:

                                                            High        Low
                                                            ----        ---

           November 22, 1999 to December 31, 1999           $ 8.31     $ 2.98
           Quarter Ended March 31, 2000                     $22.00     $ 7.25
           Quarter Ended June 30, 2000                      $12.12     $ 4.75
           Quarter Ended September 30, 2000                 $ 5.00     $ 1.93
           Quarter Ended December 31, 2000                  $ 1.87     $ 0.28


         On June 6, 2001,  the closing  bid price per share of Common  Stock was
$0.32.

         There are no outstanding options or warrants to purchase, or securities
convertible into, shares of Common Stock.

         The Company is not and has not proposed to publicly offer any shares of
Common Stock.

         Holders of Record

         As of June 6, 2001,  there  were 47 holders of record of the  Company's
Common Stock, and the number of beneficial holders was approximately 50.

         Dividends

         The Company has never paid a cash dividend on its Common Stock nor does
the Company  anticipate  paying cash  dividends  on its Common Stock in the near
future. It is the present policy of the Company not to pay cash dividends on the
Common Stock but to retain earnings, if any, to fund growth and expansion.

         Recent Sales of Unregistered Securities

         No securities  that were not registered  under the Act have been issued
or sold by the Company during the fiscal years ended December 31, 1999 and 2000,
except as described below.

         On March 2, 2000,  the Company  consummated  a share  exchange with the
five Holdings  Shareholders.  Under the terms of an agreement dated February 16,
2000,  the  shareholders  of  Holdings  transferred  to the Company all of their
shares of Holdings in consideration for the issuance to them of 8,163,000 shares
of Common Stock. The shares were offered and sold to sophisticated  investors in
reliance upon the exemption  provided by Section 4(2) of the  Securities  Act of
1933,  as amended.  The  securities  have been  appropriately  legended  and the
Company received from the Holdings shareholders a representation regarding their
intent to acquire the  securities  for the purpose of investment  only,  and not
with a view toward the subsequent distribution thereof.

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<PAGE>

         Also on March 2, 2000,  the  Company  issued to Blue  Capital AG ("Blue
Capital") 102,600 shares of Common Stock at $14.625 per share raising a total of
$1,500,525.  On that same date, Blue Capital  deposited into escrow an amount of
$1,500,525  which was  released  to the  Company in May 2000 in payment  for the
issuance of 102,600 shares of Common Stock. All of these shares were offered and
sold to Blue Capital in reliance upon the exemption  provided by Section 4(2) of
the Securities Act of 1933, as amended.  The securities have been  appropriately
legended and the Company received from Blue Capital a  representation  regarding
its intent to acquire the securities for the purpose of investment only, and not
with a view toward the subsequent distribution thereof.

         On July 26, 2000, the Company  consummated  the  acquisition of Zareeba
Limited.  In  connection  with that  transaction,  it became  obligated to issue
169,737  shares of Common  Stock to the former  shareholders  of  Zareeba.  Such
shares  were  issued  on  August  23,  2000.   This  issuance  was  exempt  from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.
The securities have been  appropriately  legended and the Company  received from
the Zareeba shareholders a representation  regarding their intent to acquire the
securities  for the purpose of investment  only,  and not with a view toward the
subsequent distribution thereof.

         The Company issued the following  additional  shares to Dual Wave, Inc.
("Dual Wave") as assignee of Blue Capital in connection with the Third Phase:

                                     Number of            Purchase
           Date                      Shares               Price
           ----                      ---------            --------

           August 23, 2000           162,500              $650,000
           September 15, 2000        125,000              $500,000
           October 15, 2000           87,500              $350,000
           November 15, 2000          62,500              $250,000
           December 15, 2000          62,500              $250,000

         The  issuances to Dual Wave were exempt from  registration  pursuant to
Regulation S promulgated under the Securities Act of 1933, as amended.



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<PAGE>

Item 6.  Management's Discussion and Analysis

         Overview

         The Company is in the  development  stage and was organized in February
1998.  To date,  the Company has not  generated  any  significant  revenues from
operations.

         On March 2, 2000, the Company  completed a share exchange with the five
shareholders  of  YellowBubble.com  Holdings  Limited  ("Holdings"),  a  company
incorporated  under the laws of England.  Under the terms of the Share  Exchange
Agreement,  the Holdings  shareholders  transferred  to the Company all of their
shares in  consideration  for the issuance to them of 8,163,000 shares of Common
Stock,  representing in the aggregate approximately 61.5% of the then issued and
outstanding  shares of  Common  Stock.  In  connection  with  this  transaction,
effective February 2000, the Company changed its name to YellowBubble.com, Inc.

         Holdings is engaged in developing new forms of on-line shopping for the
consumer by creating a membership organization. Currently, the principal markets
for its services are located in the United Kingdom and Germany.

         During the next 12  months,  the  Company  intends to devote all of its
resources to developing and expanding Holdings' business.

         Results of Operations

         As a result of the reverse acquisition  discussed above, for accounting
purposes,  the Company is deemed to have  commenced  operations  on September 2,
1999. Therefore, no comparison can be made between the twelve-month period ended
December  31, 2000 (the "Twelve  Month  Period")  and the  corresponding  period
during the  previous  fiscal  year.  Revenues  for the Twelve  Month Period were
approximately  $20,792 (including $20,292 in interest income).  Expenses for the
Twelve Month Period were approximately  $4,277,231,  resulting in a net loss for
the Twelve Month  Period of  approximately  $4,256,439.  Expenses for the Twelve
Month Period  consisted  primarily of $2,136,095  in general and  administrative
expenses  which  includes  salaries,  and  approximately  $472,282  in  business
development  costs  consisting   primarily  of  consulting  fees  and  marketing
expenses.  In  addition,  during the Twelve  Month  Period,  the  Company  spent
approximately  $1,325,968 and $23,412,  respectively,  in legal and professional
fees in connection  with  corporate  acquisitions  (including the share exchange
completed  in March  2000) and fees  associated  with  being a  publicly  traded
company.

         For the  period  from  September  2, 1999  through  December  31,  2000
("Period Since Inception")  revenues were  approximately  $20,810 resulting in a
cumulative loss for the Period Since Inception of approximately $4,498,440.

         Liquidity and Capital Resources

         As of December 31, 2000, the Company's  principal  sources of liquidity
consisted  of cash of  $209,700,  prepaid  expenses of $237,748  and a sales tax
refund due to the Company of $88,117.

         In  connection  with the share  exchange  completed in March 2000,  the
Company entered into an agreement  providing for a three phase private placement
of its Common Stock to an unaffiliated  purchaser (the  "Purchaser").  Under the
terms of the private  placement,  the  Purchaser was to have  purchased  342,000
shares of  Common  Stock at  $14.625  per  share  for a total  consideration  of
approximately  $5,000,000.  The  Company  completed  the  first two  phases  and
received approximately  $3,000,000.  In August 2000, the Company and an assignee
of Purchaser  entered into an agreement as to a new schedule for the issuance of
shares to such entity and payment  therefor.  Pursuant  to this  agreement,  the
Company agreed to issue 500,000 shares of Common Stock to Purchaser at $4.00 per
share.  All  500,000  shares  of  Common  Stock  have  been  issued in stages in
consideration for payments totaling $2,000,000.

         The Company has incurred  significant  losses from  operations  and has
generated  insufficient  operating revenue to fund its expenses. In addition, at
December 31, 2000, the Company had a working capital deficiency of approximately
$78,000.  These  factors  (among  others)  raise  substantial  doubt  about  the
Company's ability to continue as a going concern. The Company is discussing with
a number of  parties  the  possibility  to obtain  financing  for the  Company's
business,  including loans to be advanced by the Company's  officers,  directors


                                       8
<PAGE>

and principal  shareholders in the amount of  approximately  $450,000 as well as
equity financing through  independent third parties.  Any such loans would be in
addition to loans in the  principal  amount of approximately  $410,000 that have
been advanced by the Company's  officers,  directors and principal  shareholders
since  December 31, 2000.  The Company  believes  that the loans and  additional
equity, together with the anticipated income generated from its operations, will
be sufficient to execute its intended business plan particularly since overheads
(including  director  and  senior  management  remuneration  levels)  have  been
substantially reduced. The Company is determined to do all it can to promote its
growth  and  development  by  utilizing  its  marketing  strengths  and  raising
additional  financing.  Nevertheless,  there  can  be  no  assurance  that  such
financing  will be obtained  and,  even if provided,  that the Company will have
sufficient  funds to execute its  intended  business  plan or generate  positive
operating results.  If the Company is unable to find such additional  financing,
it may have to curtail its operations.

         The  amount of  additional  funds that may be  required  and the timing
thereof will depend on many factors that the Company is unable to predict,  such
as the amount of revenues generated from operations and the market acceptance of
its products and services.  The Company  anticipates  that any equity  financing
would be expected to result in dilution to the holders of the  Company's  Common
Stock.  Any debt  financing  obtained by the  Company  may  include  restrictive
covenants limiting the Company's ability to obtain additional  capital,  whether
through  additional debt or equity financing,  as well as restrictive  covenants
limiting the Company with respect to various  operational and financial matters.
In any event,  there can be no  assurance  that  additional  financing,  whether
through  sales of  equity or debt,  will be  available  on terms and  conditions
acceptable  to the Company,  if available  at all. If such  financing  cannot be
obtained,  the Company  would be  required  to reduce or postpone  expenditures,
particularly  with respect to advertising and  promotional  campaigns and may be
forced  to  curtail  certain  operations.  Any such  postponement  would  have a
material adverse effect on the Company's  business and results of operations and
its ability to continue as a going concern.

Item 7.  Financial Statements

         The following financial  statements of the Company are included in Item
7:


INDEPENDENT AUDITOR'S REPORT ................................................F-1

CONSOLIDATED BALANCE SHEET...................................................F-2

CONSOLIDATED STATEMENTS OF OPERATIONS........................................F-3

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY...............................F-4

CONSOLIDATED STATEMENTS OF CASH FLOWS........................................F-5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ...........................F-6 - F-13



                                        9
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


Board of Directors and Shareholders of
Yellowbubble.com, Inc.
London, England


We have audited the accompanying consolidated balance sheet of Yellowbubble.com,
Inc. and subsidiaries  (the "Company") (a development stage  enterprise),  as of
December  31,  2000  and the  related  consolidated  statements  of  operations,
shareholders'  equity and cash flows for the year ended  December 31, 2000,  the
period from September 2, 1999  (inception),  to December 31, 1999 and the period
from  September  2, 1999  (inception),  to December 31,  2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of the Company as of
December 31, 2000 and results of its  operations and its cash flows for the year
ended  December  31, 2000,  the period from  September  2, 1999  (inception), to
December 31, 1999 and the period from September 2, 1999 (inception), to December
31, 2000, in conformity with  accounting  principles  generally  accepted in the
United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
consolidated  financial  statements,  the  Company  has  generated  insufficient
operating  revenue  to  fund  its  operations  and  has  a net  working  capital
deficiency that raise substantial doubt about its ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 3. The  financial  statements  do not  include any  adjustments  that might
result from the outcome of this uncertainty.


/s/ Hays & Company

June 8, 2001
New York, New York



                                      F-1
<PAGE>

                             YELLOWBUBBLE.COM, INC.
                                AND SUBSIDIARIES
                        (A DEVELOPMENT STAGE ENTERPRISE)

                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2000
<TABLE>
<CAPTION>

<S>                                                                             <C>

ASSETS
Current assets
     Cash and cash equivalents                                                  $            209,700
     Accounts receivable                                                                       2,002
     Value added tax recoverable                                                              88,117
     Due from Shareholders                                                                    14,506
     Deposits                                                                                 59,724
     Prepaid expenses                                                                        237,748
     Other current assets                                                                      6,717
                                                                                --------------------
            Total current assets                                                             618,514

Property and equipment, net                                                                  446,403

Deferred website development costs, net                                                      953,189

Customer list, net                                                                            68,349

Goodwill, net                                                                                 79,140
                                                                                --------------------

                                                                                $          2,165,595
                                                                                ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
     Accounts payable and accrued expenses                                      $            556,758
     Deferred subscription income                                                             44,850
     Other current liabilities                                                                88,651
     Current maturities of capitalized lease obligations                                       6,208
                                                                                --------------------
            Total current liabilities                                                        696,467

Capitalized lease obligations, net of current maturities                                      63,425
                                                                                --------------------
Commitments and contingencies  (Notes 3, 5, 6, 7 and 8)

Shareholders' equity
     Common stock, $.001 par value; 50,000,000 shares authorized;
        14,137,937 shares issued and outstanding                                              14,138
     Additional paid-in capital                                                            5,848,860
     Deficit accumulated during the development stage                                     (4,531,306)
     Accumulated other comprehensive income                                                   74,011
                                                                                --------------------
            Total shareholders' equity                                                     1,405,703
                                                                                --------------------
                                                                                $          2,165,595
                                                                                ====================
</TABLE>


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


                                       F-2
<PAGE>
                             YELLOWBUBBLE.COM, INC.
                                AND SUBSIDIARIES
                        (A DEVELOPMENT STAGE ENTERPRISE)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                       Period from             Period from
                                                                                    September 2, 1999       September 2, 1999
                                                                Year ended           (inception), to         (inception), to
                                                             December 31, 2000      December 31, 1999       December 31, 2000
                                                             -----------------      -----------------       -----------------

Revenue
<S>                                                          <C>                    <C>                     <C>
     Revenue                                                 $            500       $              -        $             500
     Interest income                                                   20,292                     18                   20,310
                                                             -----------------      -----------------       -----------------
                                                                       20,792                     18                   20,810

Costs and expenses
     General and administrative                                     2,136,095                242,019                2,378,114
     Legal and professional fees                                    1,325,968                      -                1,325,968
     Business development                                             472,282                      -                  472,282
     Depreciation and amortization                                    319,474                      -                  319,474
     Transfer taxes                                                    23,412                      -                   23,412
                                                             -----------------      -----------------       -----------------
                                                                    4,277,231                242,019                4,519,250
                                                             -----------------      -----------------       -----------------

Net loss                                                     $     (4,256,439)      $       (242,001)       $      (4,498,440)
                                                             =================      =================       =================

Basic net loss per share                                     $          (0.33)      $          (0.03)
                                                             =================      =================

Weighted average common shares outstanding                         12,742,307              8,163,000
                                                             =================      =================
</TABLE>



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


                                       F-3
<PAGE>


                             YELLOWBUBBLE.COM, INC.
                                AND SUBSIDIARIES
                        (A DEVELOPMENT STAGE ENTERPRISE)

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>



                                                                              Deficit
                                                                            accumulated    Accumulated       Total
                                                              Additional    during the         other     shareholders'
                                           Common stock        paid-in      development   comprehensive     equity     Comprehensive
                                        Shares     Amount      capital        stage            loss        (deficit)       loss
                                      ----------  -------     ----------    -----------      -------      ----------   -------------
<S>                                   <C>         <C>         <C>           <C>              <C>          <C>          <C>

Balance, September 2, 1999
  (inception)                                  1  $     2     $        -    $         -      $     -      $        2

Net loss, period ended
  December 31, 1999                            -        -              -       (242,001)           -        (242,001)
                                      ----------  -------     ----------    -----------      -------      ----------
Balance, December 31, 1999                     1        2              -       (242,001)           -        (241,999)

Reverse acquisition (Note 1)
  Exchange of Yellowbubble.com
    Holdings Limited                          (1)      (2)             -              -            -              (2)
  Issuance of shares to
    Yellowbubble.com
    Holdings Limited                   8,163,000    8,163              -         (8,161)           -               2
  Outstanding common stock of
    Yellowbubble.com, Inc., net
    of shares repurchased              5,100,000    5,100              -        (24,705)           -         (19,605)

Issuance of common
  stock for cash                         705,200      705      5,000,345              -            -       5,001,050

Acquisition of Zareeba Limited           169,737      170        848,515              -            -         848,685

Foreign currency translation
  adjustment                                   -        -              -              -       74,011          74,011    $    74,011

Net loss, year ended
  December 31, 2000                            -        -              -     (4,256,439)           -      (4,256,439)    (4,256,439)
                                      ----------  -------     ----------    -----------      -------      ----------    -----------
    Total comprehensive loss                                                                                            $(4,182,428)
                                                                                                                        ===========
Balance, December 31, 2000            14,137,937  $14,138     $5,848,860    $(4,531,306)     $74,011      $1,405,703
                                      ==========  =======     ==========    ===========      =======      ==========


</TABLE>

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


                                       F-4
<PAGE>


                             YELLOWBUBBLE.COM, INC.
                                AND SUBSIDIARIES
                        (A DEVELOPMENT STAGE ENTERPRISE)

                      CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>

                                                                                  Period from          Period from
                                                                               September 2, 1999    September 2, 1999
                                                               Year ended       (inception) to        (inception) to
                                                            December 31,2000   December 31, 1999    December 31, 2000
                                                            ----------------   -----------------    -----------------

INCREASE (DECEASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities

<S>                                                           <C>                <C>                  <C>
Net loss                                                      $ (4,256,439)      $  (242,001)         $(4,498,440)
                                                               -----------       -----------          -----------
Adjustments to reconcile net loss to net
cash used in operating activities
   Depreciation and amortization                                   319,474                 -              319,474
   Loss on sale of property and equipment                           10,565                 -               10,565

Changes in operating assets and liabilities
    Accounts receivable                                             25,880                 -               25,880
    Value added tax recoverable                                    (88,117)                -              (88,117)
    Due from Shareholders                                          (14,506)                -              (14,506)
    Deposits                                                       (59,724)                -              (59,724)
    Prepaid expenses                                              (224,554)           (1,901)            (226,455)
    Other current assets                                            (8,469)                -               (8,469)
    Accounts payable and accrued expenses                          102,298           243,918              346,216
    Deferred subscription income                                    44,850                 -               44,850
    Other current liabilities                                      135,618                 -              135,618
                                                               -----------       -----------          -----------
      Net cash used in operating activities                     (4,013,124)               16           (4,013,108)
                                                               -----------       -----------          -----------

Cash flows from investing activities
    Purchase of property and equipment                            (465,266)                -             (465,266)
    Deferred website development costs paid                       (409,329)                -             (409,329)
    Cash acquired in Zareeba acquisition                            40,127                 -               40,127
                                                               -----------       -----------          -----------
          Net cash used in investing activities                   (834,468)                -             (834,468)

Cash flows from financing activities
    Proceeds from issuance of common stock                       5,001,050                 2            5,001,052
    Repayment of capitalized lease obligations                      (4,415)                -               (4,415)
                                                               -----------       -----------          -----------
          Net cash provided by financing activities              4,996,635                 2            4,996,637
Effect of exchange rate changes on cash                             60,639                 -               60,639
                                                               -----------       -----------          -----------
Net increase in cash and cash equivalents                          209,682                18              209,700
Cash and cash equivalents, beginning of period                          18                 -                    -
                                                               -----------       -----------          -----------
Cash and cash equivalents, end of period                      $    209,700       $        18          $   209,700
                                                              ============       ===========          ===========
Supplemental disclosure of cash flow information
       Interest paid                                          $     20,309                 -          $    20,309
                                                              ============       ===========          ===========
       Income taxes paid                                      $          -       $         -          $         -
                                                              ============       ===========          ===========

</TABLE>


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



                                       F-5
<PAGE>

                             YELLOWBUBBLE.COM, INC.
                                AND SUBSIDIARIES
                        (A DEVELOPMENT STAGE ENTERPRISE)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD FROM
               SEPTEMBER 2, 1999 (INCEPTION) TO DECEMBER 31, 1999


1    The Company

     Organization

     Yellowbubble.com,  Inc. (the "Company") was incorporated  under the laws of
     Nevada on February 5, 1998,  under the name Mall of Fame, Inc. On September
     15, 1998, the Company changed its name to Famous Internet Mall, Inc. and on
     December 31, 1999, to Yellowbubble.com, Inc.

     Reverse acquisition and initial financing

     On  March 2,  2000,  in  accordance  with  the  terms  of a Share  Exchange
     Agreement   dated  February  16,  2000  (the   "Agreement"),   the  Company
     consummated a share  exchange  with the  shareholders  of  Yellowbubble.com
     Holdings Limited  ("Holdings"),  a company  incorporated  under the laws of
     England, whereby the shareholders of Holdings exchanged all of their shares
     in  Holdings  for  8,163,000  newly  issued  voting  common  shares  of the
     Company's common stock, par value $0.001.  In addition,  in accordance with
     the Agreement, the Company purchased, from existing shareholders, 7,400,000
     shares of the Company's  12,500,000 shares of outstanding  common stock and
     returned  those  shares to treasury.  The issuance to Holdings  represented
     approximately  61.5% of the post-merger issued and outstanding common stock
     of the Company. For accounting purposes,  this transaction has been treated
     as an acquisition of the Company by Holdings and as a re-capitalization  of
     Holdings.  The  acquisition  of the Company by Holdings  has been  recorded
     based on the fair value of the Company's net  liabilities of  approximately
     $20,000. The Company, prior to acquisition,  was an inactive shell company.
     The historical  financial  statements  prior to March 2, 2000, are those of
     Holdings  and  its  wholly  owned  subsidiary,   Yellowbubble.com   Limited
     ("Yellowbubble"),  a company incorporated under the laws of England,  which
     was  incorporated  on  September  2,  1999.  Since this  transaction  is in
     substance a re-capitalization  of Holdings and not a business  combination,
     pro forma  information is not  presented.  All costs  associated  with this
     transaction have been expensed.

     Under the Agreement,  the Company was required to raise additional  capital
     and on March 2, 2000 (the  "Closing  Date"),  the  Company  entered  into a
     subscription  agreement (the  "Subscription  Agreement")  with an unrelated
     private investor ("Purchaser"). The Purchaser agreed to purchase a total of
     342,000  shares  of the  Company's  common  stock at  $14.625  per share as
     follows:

          On the Closing  Date,  the  Company  issued to the  Purchaser  102,600
          shares of common stock  raising a total of  $1,500,525  (the  "Closing
          Financing").  The proceeds of this private  placement  were  deposited
          into escrow for the benefit of a creditor of Yellowbubble in repayment
          of a $473,000  bridge loan pending  completion of the Share  Exchange.
          These funds have since been released from escrow to such creditor. The
          balance was  released to the Company and was used for working  capital
          purposes.

          On the Closing Date, the Purchaser deposited into escrow an additional
          $1,500,525  in payment  of the  purchase  of 102,600  shares of common
          stock.  These funds were to be released to the Company  provided  that
          Yellowbubble  reached certain milestones set forth in the Subscription
          Agreement  on or before  September  30, 2000 (the  "Milestone  Date").
          These milestones related primarily to the registration of new members,
          implementation  of  Yellowbubble's  marketing plan, the recruitment of
          additional  personnel and the engagement of professional  consultants.
          In  accordance  with the  Subscription  Agreement,  these  funds  were
          released to the Company on May 24, 2000.



                                       F-6
<PAGE>

     Additionally,  Purchaser  originally agreed to pay a further $2,000,700 for
     the  issuance of 136,800  shares of common stock by the  Milestone  Date if
     Yellowbubble  reached certain additional  milestones  relating primarily to
     the  registration  of  additional  new  members,   the   implementation  of
     Yellowbubble's  business plan and the  commissioning of a consumer research
     program.  Since the Company was  approximately one week late in meeting the
     milestone  required for the completion of the third phase (which  milestone
     related to the  registration  of  additional  members),  Purchaser  did not
     complete the purchase of shares under the third phase.  In August 2000, the
     Company and  Purchaser  reached an  agreement  as to a new schedule for the
     issuance  of  shares  to an  assignee  of the  Purchaser  and  the  payment
     therefor.  Pursuant to this agreement,  the Company issued to such assignee
     500,000 shares of Common Stock at $4.00 per share.  Payments were made (and
     the appropriate number of shares were issued) as follows:

                  August 23, 2000               $650,000
                  September 15, 2000            $500,000
                  October 15, 2000              $350,000
                  November 15, 2000             $250,000
                  December 15, 2000             $250,000

     Zareeba Limited acquisition

     On July  26,  2000,  the  Company  consummated  a share  exchange  with the
     shareholders   (the   "Shareholders")   of  Zareeba   Limited,   a  company
     incorporated under the laws of England ("Zareeba").  Under the terms of the
     Agreement  dated  July  26,  2000  (the   "Agreement"),   the  Shareholders
     transferred to the Company all of their shares of Zareeba in  consideration
     for the  issuance of 169,737  shares of Common  Stock of the  Company  (the
     "Shares"),  valued at $848,685,  or $5.00 per Share,  and the assumption of
     liabilities in the amount of (pound)99,991, or approximately $151,316. This
     transaction  has been accounted for as a purchase  business  combination in
     accordance  with  Accounting  Principles  Board  Opinion  No. 16,  Business
     Combinations.

     The purchase price allocation was as follows:

              Fair value of net liabilities assumed         $     (14,665)
              Customer base                                         86,335
              In-place technology                                  690,680
              Goodwill                                              86,335
                                                            ---------------
                                                            $      848,685
                                                            ===============

     The tangible assets of Zareeba acquired principally included cash, accounts
     receivable,  property and equipment and other assets.  The  liabilities  of
     Zareeba assumed  principally include accounts payable and accrued expenses.
     The value of the customer base was estimated based upon the current cost to
     acquire   approximately   130,000  customers  and  is  being  amortized  to
     operations  over an estimated life of two years.  The value of the in-place
     technology was determined by estimating the projected net cash flows


                                       F-7
<PAGE>

     related to the product,  determined  based upon the Company's  estimates of
     the future  revenue to be earned from the  products.  These cash flows were
     then discounted back to their net present value. The in-place technology is
     being  amortized to operations  over an estimated life of three years.  The
     excess of purchase price over tangible and identifiable  intangible  assets
     acquired  and  liabilities  assumed was  recorded as goodwill  and is being
     amortized to operations over an estimated life of five years.

     Pursuant to a  Registration  Rights  Agreement  between the Company and the
     Shareholders,  the Company  also granted to the  Shareholders  the right to
     include  their  Shares  in  any  registration   statement  (other  than  in
     connection with a merger or other  reorganization  or pursuant to Form S-8)
     it may file within two years from the closing  date of the Share  Exchange.
     Zareeba is an Internet  startup  company  that  provides  on-line  discount
     shopping to its members through its bargain shopping channel.  In addition,
     it allows  members to advertise  goods and services for free on its auction
     channel.   Zareeba   attempts  to  attract  members  by  paying  users  for
     downloading  and  displaying  advertisement  bars on their browsers and for
     referring new members. At the date of acquisition, Zareeba had in excess of
     130,000 members.

     The  following  unaudited  pro forma  information  shows the results of the
     Company's  operations  presented as if the Zareeba  acquisition was made at
     September 2, 1999  (inception).  The unaudited pro forma information is not
     necessarily  indicative  of the  results  of  operations  that  would  have
     occurred had the transactions  been made at that date nor is it necessarily
     indicative of future results of operations.

<TABLE>
<CAPTION>

                                                                          Period from
                                                                       September 2, 1999
                                                Year ended              (inception), to
                                             December 31, 2000         December 31, 1999
                                             -----------------         -----------------

<S>                                            <C>                       <C>
        Revenue                                $     36,257              $     10,674
                                               ============              ============

        Net Loss                               $ (4,699,310)             $   (537,151)
                                               ============              ============

        Basic net loss per share               $      (0.37)             $      (0.06)
                                               ============              ============
</TABLE>

     Business

     The Company is a network  marketing company that has a broad customer base,
     a  scaleable  business  model and a  sophisticated  core  technology.  This
     enables the Company to provide a range of market  offerings  including i) a
     business  opportunity for network marketing  specialists to sell discounted
     products and services to both  commercial and consumer  markets,  and ii) a
     software application for on-line advertisers to reach specific user groups.
     The  Company  has not yet  generated  any revenue  from  operations  and is
     considered to be in the development stage.


                                       F-8
<PAGE>


2    Significant accounting policies

     Principles of consolidation

     The consolidated  financial  statements include the accounts of the Company
     and its  wholly  owned  subsidiaries,  Holdings,  Yellowbubble,  Aladin  AG
     (inactive company) and Zareeba. All significant  intercompany  transactions
     and balances have been eliminated in consolidation.

     Cash and cash equivalents

     The  Company   considers  all  highly  liquid   investments  with  original
     maturities when purchased of three months or less to be cash equivalents.

     Property and equipment

     Property  and   equipment  are  stated  at  cost  and   depreciated   on  a
     straight-line  basis over the estimated useful lives of the related assets,
     which  range from three to four years.  Expenditures  for  maintenance  and
     repairs are  charged to  operations  at the time the  expense is  incurred.
     Expenditures determined to represent additions are capitalized.

     Website development costs

     Costs  incurred in the  development  of the core software for the Company's
     website  infrastructure  are  capitalized  in accordance  with Statement of
     Position 98-1  "Accounting for the Costs of Software  Developed or Obtained
     for Internal  Use" and are amortized  over the expected  useful life of the
     developed  software of three years.  Costs  incurred in the  development of
     content for the Company's website and maintenance are expensed as incurred.
     During the year ended December 31, 2000, the Company  capitalized  $428,142
     in costs associated with the development of its website infrastructure.  In
     addition,  the Company acquired $719,538 of capitalized website development
     costs in  connection  with the  purchase  of Zareeba  (Note 1). The Company
     amortized  $195,916 and $0 to operations during the year ended December 31,
     2000 and the period from  September  2, 1999  (inception)  to December  31,
     1999, respectively.

     Impairment of long-lived assets

     The Company reviews  long-lived  assets,  including  intangible assets, for
     impairment  whenever events or changes in  circumstances  indicate that the
     carrying  amounts may not be  recovered.  If the  carrying  amounts are not
     expected to be recovered by undiscounted  future cash flows, the assets are
     impaired and an impairment loss would be recorded. The amount of impairment
     is  based  on  the  estimated  fair  value  of  the  assets  determined  by
     discounting  anticipated  future net cash flows.  The net present  value of
     future cash flows is based on the Company's estimates  discounted at a rate
     commensurate with the risks involved.

     Foreign currency translation

     The functional currency for all of the Company's  subsidiaries is the local
     currency  for each  subsidiary.  Assets and  liabilities  of the  Company's
     foreign  subsidiaries are translated into U.S. dollars at year-end exchange
     rates and income  statement items are translated at average  exchange rates
     during the period.  Gains and losses  resulting  from the  translation  are
     recorded  as  a  separate   component  of  Shareholders'   equity  entitled


                                       F-9
<PAGE>

     "Accumulated other comprehensive income".  Transaction gains and losses are
     recognized in income as incurred.

     Included in cash and cash  equivalents  at December 31, 2000, is $32,922 of
     cash and cash  equivalents  denominated  in foreign  currencies  (UK pounds
     sterling and European Monetary Union euro).

     Income taxes

     The Company  accounts  for income  taxes using the  liability  method which
     requires the  determination of deferred tax assets and liabilities based on
     the  differences  between  the  financial  and  tax  bases  of  assets  and
     liabilities  using  enacted  tax  rates  in  effect  for the  year in which
     differences are expected to reverse. The net deferred tax asset is adjusted
     by a valuation allowance, if, based on the weight of available evidence, it
     is more likely than not that some  portion or all of the net  deferred  tax
     asset will not be realized.

     Deferred income taxes are recorded to reflect both the foreign and domestic
     tax  consequences on future years for differences  between the tax basis of
     assets  and  liabilities  and their  financial  reporting  amounts  at each
     year-end.   Deferred  taxes  are  primarily  the  result  of   depreciation
     differences and net operating losses.  The Company has fully reserved their
     net deferred tax assets due to the uncertainty of their utilization.

     Revenue recognition

     The  Company  provides  an  on-line  shopping  community  through  one-year
     subscription  agreements with its customers.  Subscription income is earned
     ratably over the term of the agreement. The unearned portion of such income
     is  reflected  as  deferred   subscription   income  in  the   accompanying
     consolidated balance sheet.

     Basic and diluted earnings per common share

     The Company displays earnings per share in a dual presentation of basic and
     diluted  earnings per share.  Basic earnings per share includes no dilution
     and is  computed  by  dividing  net  income  or loss  available  to  common
     shareholders  by the weighted  average number of common shares  outstanding
     for the period.  Diluted earnings per share include the potential  dilution
     that could occur if  securities  or other  contracts  to issue common stock
     were exercised or converted into common stock.

     The  effect  of the  recapitalization  discussed  in Note 1 has been  given
     retroactive  application in the earnings per share calculation.  The common
     shares issued and outstanding  with respect to the pre-merger  shareholders
     has been included since the effective  date of the merger.  The Company had
     no potentially  dilutive securities  outstanding as of December 31, 2000 or
     1999. Accordingly, basic and diluted earnings per share are identical.



                                       F-10
<PAGE>
     Estimates

     In  preparing  consolidated   financial  statements,   in  conformity  with
     accounting  principles generally accepted in the United States,  management
     makes estimates and assumptions  that affect the reported amounts of assets
     and liabilities and disclosure of contingent  assets and liabilities at the
     date of the  consolidated  financial  statements,  as well as the  reported
     amounts of revenue and expenses during the reporting period. Actual results
     could differ from those estimates.

3    Basis of presentation and management's plans

     The  accompanying  consolidated  financial  statements  have been  prepared
     assuming the Company will continue as a going concern. The Company has made
     a substantial  investment in proprietary  technology  development,  website
     development  and a business  infrastructure.  As a result,  the Company has
     incurred  losses from  inception  and has been  inhibited  from  generating
     sufficient operating revenue to fund its expenses and at December 31, 2000,
     had a working capital deficiency of $77,953.  These factors,  among others,
     raise  substantial doubt about the Company's ability to continue as a going
     concern.  The  ability of the  Company to  continue  as a going  concern is
     contingent upon it obtaining  additional debt and/or equity financing.  The
     accompanying   consolidated   financial   statements  do  not  include  any
     adjustments that might result from the outcome of this uncertainty.

     The Company plans to commence  operations in the second quarter of 2001 and
     expects  operating cash flows to fund a portion of its operating  expenses.
     The  Company  has also  embarked  on a fund  raising  activity  to  procure
     additional funds through debt and equity financings (Note 8). These amounts
     together with the planned  income  generation are expected to be sufficient
     to sustain the Company's planned growth and development, particularly since
     overheads have been  substantially  curtailed,  including the directors and
     senior  management  remuneration.  Any debt financing  would likely include
     restrictive  covenants  limiting the Company's ability to obtain additional
     capital,  whether through  additional debt or equity financing,  as well as
     restrictive   covenants  limiting  the  Company  with  respect  to  various
     operational  and  financial  matters.   There  can  be  no  assurance  that
     additional  financing,  whether  through  debt or sales of  equity  will be
     available on terms and conditions  acceptable to the Company, if at all. If
     financing  cannot be obtained,  the Company  would be required to reduce or
     postpone  expenditures  and may be forced to delay  its  planned  growth or
     curtail certain operations.  In addition, the inability to obtain financing
     would cause the Company to exhaust all of its  remaining  capital  reserves
     and would have a material  adverse  effect on the  Company's  business  and
     results of operations and its ability to continue as a going concern.


                                       F-11
<PAGE>


4    Property and equipment, net

     Property and equipment consists of the following at December 31, 2000:

                                                   Estimated
                                                  useful life
                                                  -----------
        Computer equipment                         3 years        $     311,167
        Motor vehicles                             4 years              103,845
        Furniture and fixtures                     3 years               74,705
        Office equipment                           3 years               50,314
                                                                  -------------
                                                                        540,031
        Less accumulated depreciation                                    93,628
                                                                  -------------
                                                                  $     446,403
                                                                  =============

     Motor  vehicles with an original cost of $103,845 have been recorded  under
     capitalized  leases as of December  31, 2000.  Depreciation  expense on the
     motor vehicles recorded under  capitalized  leases was $24,656 for the year
     ended December 31, 2000.

5    Capitalized lease obligations

     During the year ended  December  31, 2000,  the Company  financed its motor
     vehicle  purchases in the form of  capitalized  leases.  Each lease is four
     years in duration,  bearing  interest at rates  ranging  between  11.6% and
     12.2% per annum.

     Interest expense under the capitalized lease obligations was $6,262 for the
     year ended December 31, 2000.

     The scheduled minimum required lease payments are as follows:

          Year ending December 31,
                   2001                                         $      14,167
                   2002                                                14,167
                   2003                                                59,378
                                                                -------------
                                                                       87,712
          Less amount representing interest                            18,079
                                                                -------------
          Present value of minimum lease payments               $      69,633
                                                                =============

6    Commitments and contingencies

     Leases

     The  Company  has  entered  into   operating   lease   agreements  for  its
     headquarters and additional  office space in London,  England.  The Company
     intends to move its  headquarters  to the  additional  office  space once a
     suitable  tenant is  identified  for its  current  headquarters.  The lease
     agreements provide for annual rents that are subject to increase on certain
     anniversaries  based on  negotiated  terms or the  increase in the index of
     retail prices. In addition, the Company rents a flat in London, England and

                                       F-12
<PAGE>

     an office in Yorkshire, England on a month-to-month basis. Rent expense was
     $217,897  and $0 for the year ended  December  31, 2000 and the period from
     September 2, 1999 (inception) to December 31, 1999.

     Approximate future minimum required lease payments are as follows:

          Year ending December 31,
               2001                                       $           89,437
               2002                                                   89,437
               2003                                                   89,437
               2004                                                   89,437
               2005                                                   84,771
          Thereafter                                                 300,785
                                                          ------------------
                                                          $          743,304
                                                          ==================

     Employment agreements

     The Company has entered into  employment  agreements  with its key officers
     and  directors.  The  agreements  are for one or two  years  and  expire in
     September or October 2001.  Compensation  paid under these  agreements  was
     $378,683  for the year ended  December  31, 2000 and $51,094 for the period
     from September 2, 1999 (inception) to December 31, 1999.

7    Related party transactions

     During the year ended December 31, 2000, the Company paid  consultancy fees
     of  i)  $13,792  to  one  of  the  Company's  directors,   ii)  $37,890  to
     Professional Advisory Services,  for which a director of the Company is the
     sole proprietor and iii) $45,644 to Corporate Advisory Partnership Limited,
     for which a former director of the Company is a director.

     In addition,  the Company rents, on a month-to-month basis, office space in
     Yorkshire from a director of the Company.  Rent related to the office space
     was $39,744 and $0 for the year ended December 31, 2000 and the period from
     September 2, 1999 (inception) to December 31, 1999.

8    Subsequent events

     Subsequent to December 31, 2000, certain directors of the Company have made
     loans to the Company aggregating  approximately $410,000. The proceeds from
     these loans were used for working capital purposes.


                                      F-13
<PAGE>

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

         None.

                                    PART III

Item 9.  Directors and Executive Officers of the Registrant

         The  following  table sets  forth the name,  age and  position  of each
director and executive officer of the Company as of the date hereof.

<TABLE>
<CAPTION>

         NAME                       Age                             PRESENT POSITION
         ----                       ---                             ----------------

<S>                                 <C>
David F. H. Scroggie                65          Vice  President  and a Director of the Company;  Chairman
                                                of    Yellowbubble.com    Limited;    and   Director   of
                                                Yellowbubble.com Holdings Limited.

Narinder "Shami" Dhillon            38          Director of the Company and of Yellowbubble.com  Holdings
                                                Limited,     Business     Development     Director     of
                                                Yellowbubble.com Limited.

Prashant N. Patel                   37          Director of the Company and of Yellowbubble.com  Holdings
                                                Limited;  Chief  Executive  Officer  of  Yellowbubble.com
                                                Limited.

Kornelia Coric                      34          Director of the Company and of Yellowbubble.com  Holdings
                                                Limited;  Chief  Operating  Officer  of  Yellowbubble.com
                                                Limited.

Siew S. Lee                         38          Secretary  of  the  Company,   and  of   Yellowbubble.com
                                                Holdings Limited and Yellowbubble.com Limited.
</TABLE>

         David  Scroggie has been Vice  President  and a Director of the Company
and of Yellowbubble.com  Holdings Limited since September 1999. Mr. Scroggie has
been Chairman of  Yellowbubble.com  Limited since August 2000 and from September
1999 to August 2000, he was Deputy Chief Executive  Officer and Secretary.  From
1996 to September  1999,  Mr.  Scroggie  was a director of  Cambridge  Corporate
Management  Limited,  a business  consultancy  organization  and a principal  of
Professional Advisor Services, a specialist financial services consultancy.

         Narinder  "Shami"  Dhillon  has been a Director  of the  Company and of
Yellowbubble.com  Holdings  Limited since  September  1999. Mr. Dhillon has been
Business  Development  Director  of the Company  since  January  2001,  and from
September   1999  to  January  2001,   was  the  Chief   Executive   Officer  of
Yellowbubble.com Limited. From September 1998 to September 1999, Mr. Dhillon was
a director and founder of Consumax  Limited and from July 1996 to September 1998
a director and founder of Quantum Marketing International Limited.

         Prashant  Naresh  Patel  has  been a  Director  of the  Company  and of
Yellowbubble.com Holdings Limited since September 1999. Mr. Patel has been Chief
Executive  Officer of the Company since January 2001, and from September 1999 to
January 2001, was Marketing Director of Yellowbubble.com Limited. From July 1997
to October  2000,  Mr.  Patel was  Managing  Director  of The Lab  (Photographic
Services) Limited.  From July 1996 to September 1998, he was employed as head of
the  Marketing  Department at Quantum  Marketing  International Limited and from
September 1998 to September 1999 at Consumax Limited.

         Kornelia Coric has been a Director of the Company and  Yellowbubble.com
Holdings Limited and Chief Operations Director of Yellowbubble.com Limited since
August 2000.  From April 1997 to June 2000,  Ms. Coric was Managing  Director of
Zepter  International UK Limited. Ms. Coric was also a director of the following
companies from May 1998 to June 2000:  Zepter Collection  France,  Zepter Nordic
Denmark, Zepter Finland, Zepter Norway, Zepter Japan, Zepter Australia,  Scettro
Italy.   From  March  1996  to  April  1997,  she  was  a  legal  consultant  to
Gillman-Smith & Co. Solicitors.

         Siew S. Lee has been  Secretary of the Company  since October 2000 and,
since August 2000, of  Yellowbubble.com  Holdings  Limited and  Yellowbubble.com
Limited. Mrs. Lee is a barrister and has been called to the bar since 1992.


                                       10
<PAGE>

Since August 2000,  she has been employed by  Yellowbubble.com  Limited as Legal
Manager.  From August 1998 to May 2000,  Mrs. Lee was Director of Legal Affairs,
and from April 1997 to August 1998,  Legal Manager,  of Zepter  International UK
Limited.  From  March  1996 to  April  1997,  she  was  In-house  barrister  for
Gillman-Smith & Co. Solicitors.

         There are no family  relationships  among the officers  and  directors.
There is no  arrangement  or  understanding  between  the Company (or any of its
directors or officers) and any other  persons  pursuant to which such person was
or is to be selected  as a director  or  officer,  or under which any officer or
director  is acting or will act on  behalf of or at the  direction  of any other
person.

Compliance with Section 16(a) of the Exchange Act

         Section  16(a) of the Exchange Act  requires  the  Company's  executive
officers and directors,  and persons who own more than ten percent of the Common
Stock of the Company to file reports of ownership and changes in ownership  with
the Securities and Exchange Commission.  Executive officers,  directors and more
than ten percent stockholders are required by regulations  promulgated under the
Exchange  Act to furnish the Company  with copies of all Section  16(a)  reports
filed.  Based upon a review of the  filings  made,  it appears  that all persons
subject to Section 16 complied with their reporting  obligations with respect to
the Company's securities.

Item 10. Executive Compensation

         All of the executive officers of the Company also serve as employees of
Yellowbubble.com  Holdings Limited or its affiliates.  The executive officers of
the Company  receive no  compensation  directly  from the  Company.  Some of the
officers also serve as officers of other companies  affiliated with the Company.
Allocations  have been made as to each  individual's  time devoted to his or her
duties as an executive of the Company.

         The following table shows the cash compensation  paid or earned,  based
on the aforementioned  allocations, to the Chairman, Chief Executive Officer and
other top three  executive  officers for services  rendered in all capacities to
the Company from September 1999 to December 2000:

                                                  Annual Compensation(1)
                                                  ----------------------
Name / Title                              Year         Salary           Bonus
------------                              ----         ------           -----
David F. H. Scroggie                      2000        $ 97,462         $ 13,640
Vice President                            1999           - 0 -            - 0 -

Narinder Dhillon                          2000        $128,264         $ 19,703
Business Development Director(2)          1999           - 0 -            - 0 -
(Yellowbubble.com Limited)

Prashant N. Patel                         2000        $ 58,057         $ 13,640
CEO(3) (Yellowbubble.com Limited)         1999           - 0 -            - 0 -

Joseph Lucidi (4)                         2000           - 0 -            - 0 -
                                          1999           - 0 -            - 0 -

John Meyer (5)                            2000           - 0 -            - 0 -
                                          1999           - 0 -            - 0 -
-------------------

(1)  All salaries and bonuses are paid in British pounds. The dollar amounts set
     forth in the table are based on the average exchange rate for the year 2000
     as reported by the Federal Reserve.

(2)  Mr. Dhillon served as Chief Executive Officer from September 1, 1999  until
     January 2, 2001.

(3)  Since January 2, 2001.

(4)  Mr. Lucidi resigned as President on December 10, 1999.

(5)  Mr. Meyer was President from December 10, 1999 until March 2, 2000.

         The  Company  has  entered   into   employment   (service)   agreements
(individually,  an "Agreement" and collectively,  the "Agreements") with its key
officers and Directors. The Agreements with Messrs. Scroggie,  Dhillon and Patel
expire in September  2001,  September 2001 and April 2002,  respectively.  After
such periods,  each of the Agreements may be terminated upon six months' notice.
The Agreement with Ms. Coric expires  October 15, 2001.  After such period,  the
Agreement may be terminated  upon three months'  notice.  Each of the Agreements
generally  contains the terms of the individual's  employment,  including his or
her salary, to wit, D. Scroggie-$90,930,  N. Dhillon-$127,302,  P. Patel-$90,930
and K. Coric $113,662,  and the officer's  benefits.  Effective  August 1, 2001,
Messrs.  Scroggie and Patel  agreed to reduce  their annual  salaries to $63,650
each, and Mr.  Dhillon agreed to reduce his annual salary to $88,650.  Effective
January 2, 2001,  upon his  resignation  as CEO and his  appointment as Business
Development Director, Mr. Dhillon's annual salary was set at $63,650.  Effective
January 2, 2001,  upon his appointment as CEO, Mr. Patel's annual salary was set
at $89,100.  In light of the Company's  financial  situation,  Messrs.  Dhillon,
Patel and  Scroggie  have not been  paid any  salary  since  February  1,  2001.
Pursuant  to the terms of the  Agreements,  the  Company  may,  in its  absolute
discretion  for  a  limited   period  after  notice,   terminate  any  Agreement
immediately  upon the payment to the officer of a sum  equivalent  to his or her
basic salary and the taxable value of all other benefits due under the Agreement
with respect to a period equivalent to the applicable notice period.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The  following  table  sets  forth  information   regarding  beneficial
ownership  of the  Company's  Common  Stock as of the date of this report by all
shareholders  who, to the Company's  knowledge,  own 5% or more of the Company's


                                       11
<PAGE>

Common Stock.  Beneficial  ownership has been  determined for purposes herein in
accordance  with Rule 13d-3 of the Securities  Exchange Act of 1934, as amended,
under which a person is deemed to be the beneficial  owner of securities if such
person  has or  shares  voting  power or  investment  power in  respect  of such
securities or has the right to acquire beneficial ownership within 60 days.

                                                     Number of          Percent
Name and Address of Beneficial Owner                Shares Owned         Owned
------------------------------------                ------------         -----

Narinder Dhillon                                     3,941,500(1)        27.9%

David Frank Henderson Scroggie                          472,225           3.3%

Prashant Naresh Patel                                   472,225           3.3%

Kornelia Coric                                                0            -

The Continental Trust Company Limited                1,099,922(2)         7.8%

All Executive Officers and Directors as a
Group (four persons)                                 4,885,950(1)        34.6%

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

(1)  Does not  include  shares of Common  Stock  held by The  Continental  Trust
     Company  Limited (the "Trust") as to which Mr. Dhillon may have a financial
     interest (at the discretion of the Trust's trustees) in the event of a sale
     of such shares which sale is at the sole  discretion of the trustees of the
     Trust. Mr. Dhillon has no voting or dispositive power over said shares.

(2)  Held for the benefit of a number of  individuals  at the  discretion of the
     trustees of the Trust. Except as set forth in footnote 1 above, none of the
     beneficiaries of the Trust are affiliates of the Company.

Item 12. Certain Relationships and Related Transactions

         None that are required to be disclosed herein.


                                       12
<PAGE>

                                     PART IV

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

         (a)  Exhibits

Exhibit Number    Description of Exhibit
--------------    ----------------------

2.                Share  Exchange  Agreement  dated  February  16, 2000  between
                  Registrant,  Yellowbubble.com  Holdings Limited,  Gordon Barry
                  McFadzean,  Narinder  Dhillon,  Prashant  Naresh Patel,  David
                  Frank  Henderson  Scroggie,   The  Continental  Trust  Company
                  Limited and Yellowbubble.com Limited*

3.1               Certificate of Incorporation, as amended**

3.1a              Certificate of Amendment to Certificate of Incorporation***

3.2               The Company's By-laws**

10.1              Agreement  dated July 26, 2000,  between  Registrant,  Zareeba
                  Limited and the shareholders of Zareeba****

10.2              Registration  Rights  Agreement  dated  as of  July  26,  2000
                  between Registrant and the shareholders of Zareeba****

10.3a             Employment  (Service) Agreement dated February 1, 2000 between
                  Yellowbubble.com Limited and David Frank Henderson Scroggie


10.3b             Employment  (Service) Agreement dated February 1, 2000 between
                  Yellowbubble.com Limited and Narinder Dhillon


10.3c             Employment  (Service)  Agreement  dated April 1, 2000  between
                  Yellowbubble.com Limited and Prashant Naresh Patel


10.3d             Employment  (Service)  Agreement dated August 16, 2000 between
                  Yellowbubble.com Limited and Kornelia Coric


10.3e             Employment  (Service)  Agreement dated August 18, 2000 between
                  Yellowbubble.com Limited and Siew See Lee

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

*     Incorporated by reference to the Company's  Current Report on Form 8-K
      filed on April 12, 2000.

**    Incorporated by reference to the Company's  Registration  Statement on
      Form 10-SB.

***   Incorporated  by  reference  to the  Company's  Annual  Report on Form
      10-KSB for the year ended December 31, 1999.

****  Incorporated  by reference  to the  Company's  Current  Report on Form
      8-K/A filed on October 11, 2000.

         (b)  Reports on Form 8-K

         On October 11, 2000, the Company filed an amendment to a Current Report
on Form  8-K  containing  the  financial  statements  required  to be  filed  in
connection with the acquisition of Zareeba Limited.


                                       13
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                        YELLOWBUBBLE.COM, INC.


                                        By: /s/  David F. H. Scroggie
                                            -------------------------------
                                                 David F. H. Scroggie
                                                 Vice President

Dated:  June 12, 2001

<TABLE>
<CAPTION>

Name                                                 Title                      Date
----                                                 -----                      ----

<S>                                                  <C>                        <C>
 /s/ Kornelia Coric                                  Director                   June 12, 2001
------------------------------------
     Kornelia Coric

 /s/ Narinder Dhillon                                Director                   June 12, 2001
------------------------------------
     Narinder Dhillon

 /s/ Prashant N. Patel                               Director                   June 12, 2001
------------------------------------
     Prashant N. Patel

 /s/ David F. H. Scroggie                            Director                   June 12, 2001
------------------------------------
     David F. H. Scroggie                            Chief Financial and
                                                     Accounting Officer
</TABLE>



                                       14