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

                                   FORM 10-QSB

(Mark One)

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

                       For the period ended June 30, 2000

                                       OR

[ ] TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
    EXCHANGE ACT OF 1934
                     For the transition period from ____ to ____

                           Commission File No. 0-22744

                           VIKING CAPITAL GROUP, INC.
                   -------------------------------------------
        (Exact name of small business issuer as specified in its charter)


                Utah                                      87-0442090
                ----                                      ----------
   (State or other jurisdiction of             (IRS Employer Identification No.)
   incorporation or organization)

        Two Lincoln Centre, Suite 300, 5420 LBJ FWY, Dallas, Texas 75240
        ----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (972) 386-9996
                                 --------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X  No
                                                                      ---   ---
As of June 30,  2000,  approximately  33,638,865  shares of Common  Stock of the
issuer were outstanding.  As of June 30, 2000,  100,000 shares of Class B Common
Stock of the issuer were outstanding.


                                      -1-

<PAGE>

                           VIKING CAPITAL GROUP, INC.

                                      INDEX

                                                                          Page
                                                                          Number
                                                                          ------
PART I - FINANCIAL INFORMATION

  Item 1. Financial Statements

    Consolidated Balance Sheets - June 30, 2000 and December 31, 1999         3

    Consolidated Statements of Operations - For the three months ended
    June 30, 2000 and 1999, and for the period from inception
    (November 12, 1986) to June 30, 2000                                      5

    Consolidated  Statements  of Operations - For the six months ended
    June 30, 2000 and 1999, and for the period from inception
    (November 12, 1986) to June 30, 2000                                      6

    Consolidated  Statements  of Cash Flows - For the six months ended
    June 30, 2000 and 1999, and for the period from inception
    (November 12, 1986) to June 30, 2000                                      7

    Notes to Consolidated Condensed Financial Statements                      9


  Item 2. Management's Discussion and Analysis or Plan of Operations.        11


PART II - OTHER INFORMATION

  Item 5. Other Information                                                  13
  Item 6. Exhibits                                                           13


SIGNATURES                                                                   15
EXHIBITS                                                                     16






                                      -2-

<PAGE>

<TABLE>

<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                           CONSOLIDATED BALANCE SHEETS



                                     ASSETS
                                     ------
                                                             (Unaudited)

                                                              June 30,   December 31,
                                                                2000         1999
                                                             ----------   ----------
<S>                                                          <C>          <C>
CURRENT ASSETS

  Cash                                                       $   15,372   $    8,434
  Accounts receivable                                             7,674       14,024
  Notes and other accounts receivable and accrued interest       72,704       76,617
                                                             ----------   ----------
     Total current assets                                        95,750       99,075
                                                             ----------   ----------

OFFICE FURNITURE, EQUIPMENT, SOFTWARE AND
CAPITALIZED SOFTWARE DEVELOPMENT COSTS                          794,279      823,260

OTHER ASSETS                                                     85,027       90,359
                                                             ----------   ----------

TOTAL ASSETS                                                 $  975,056   $1,012,694
                                                             ==========   ==========



</TABLE>




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

                                      -3-

<PAGE>

<TABLE>

<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                           CONSOLIDATED BALANCE SHEETS



                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------
                                                                               (Unaudited)

                                                                                June 30,        December 31,
                                                                                   2000             1999
                                                                              ------------      -----------
<S>                                                                           <C>               <C>
CURRENT LIABILITIES
  Accounts payable and accrued expenses                                       $    380,216      $   463,997
  Accrued officer's payroll                                                      1,104,221          921,422
  Lease obligation, current portion                                                 13,533           20,923
  Note payable and accrued interest                                                231,121          219,201
                                                                              ------------      -----------
     Total current liabilities                                                   1,729,091        1,625,543
                                                                              ------------      -----------

LONG-TERM DEBT
  Obligations under capital leases, less current portion                             5,886           14,389
                                                                              ------------      -----------
     Total liabilities                                                           1,734,977        1,639,932
                                                                              ------------      -----------

STOCKHOLDERS' DEFICIT
  Preferred stock $1.00 par value; 50,000,000 shares authorized;
     Series A Preferred Stock $1.00 par value; 2,500,000 shares
        authorized, no shares issued and outstanding                                     -                -
     Series AA Preferred Stock $1.00 par value; 6,000,000 shares
        Authorized, no shares issued and outstanding                                     -                -
  Common stock $0.001 par value; 150,000,000 shares authorized;
     34,164,490 and 32,029,192 issued as of June 30, 2000
     and December 31, 1999, respectively                                            34,164           32,029
  Common stock Class B $0.001 par value; 100,000 shares
     authorized and outstanding                                                        100              100
  Paid-in capital                                                                9,792,133        9,197,191
  Deficits accumulated in the development stage                                 (9,773,078)      (9,062,318)
                                                                              ------------      -----------
                                                                                    53,319          167,002
                                                                              ------------      -----------

  Less treasury stock - 525,625 shares at cost                                     (41,206)         (41,206)
                                                                              ------------      -----------
  Less stock issued for notes receivable                                          (772,034)        (753,034)
                                                                              ------------      -----------

     Total stockholders' deficit                                                  (759,921)        (627,238)
                                                                              -------------     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                   $    975,056      $ 1,012,694
                                                                              ============      ===========

</TABLE>



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

                                      -4-

<PAGE>

<TABLE>

<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                  Three months ended June 30, 2000 and 1999 and
           Period from November 12, 1986 (inception) to June 30, 2000


                                                   Three months ended               Period from
                                                        June 30,                  November 12, 1986
                                                  2000            1999            to June 30, 2000
                                             ------------    ------------         ----------------
<S>                                          <C>             <C>                  <C>
Revenue                                      $      2,674    $       --             $    475,060
Cost of Revenue                                     2,451            --                   91,324
                                             ------------    ------------           ------------
Gross Profit                                          223            --                  383,736
                                             ------------    ------------           ------------

Cost and expenses
   Depreciation and amortization                   13,622          11,686                159,899
   General and administrative expenses            256,956         487,205              9,761,281
                                             ------------    ------------           ------------
       Total cost and expenses                    270,578         498,891              9,921,180
                                             ------------    ------------           ------------

   Loss from operations                          (270,355)       (498,891)            (9,537,444)

Other income(expenses)
   Interest income                                  9,123          12,917                103,742
   Interest and penalty expense                    (6,523)         (5,764)              (267,405)
   Other                                             --             6,000                (40,750)
                                             ------------    ------------           ------------
       Total other income(expense)                  2,600          13,153               (204,413)
                                             ------------    ------------           ------------

Loss before income taxes                         (267,755)       (485,738)            (9,741,857)

Income tax provision                                 --              --                      (32)
                                             ------------    ------------           ------------

Net loss                                     $   (267,755)   $   (485,738)          $ (9,741,889)
                                             ============    ============           ============

Loss per common share attributable to
   common stockholders
     Basic and Fully Diluted                       $(.008)         $(.016)


Weighted average common shares outstanding     33,532,064      29,434,226

</TABLE>




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

                                      -5-

<PAGE>

<TABLE>

<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                   Six months ended June 30, 2000 and 1999 and
           Period from November 12, 1986 (inception) to June 30, 2000


                                                    Six months ended              Period from
                                                        June 30,                November 12, 1986
                                                  2000            1999          to June 30, 2000
                                             ------------    ------------       ----------------
<S>                                          <C>             <C>                <C>
Revenue                                      $     15,666    $       --           $    475,060
Cost of Revenue                                    13,366            --                 91,324
                                             ------------    ------------         ------------
Gross Profit                                        2,300            --                383,736
                                             ------------    ------------         ------------

Cost and expenses
   Depreciation and amortization                   28,982          21,792              159,899
   General and administrative expenses            685,369         964,359            9,761,281
                                             ------------    ------------         ------------
       Total cost and expenses                    714,351         986,152            9,921,180
                                             ------------    ------------         ------------

   Loss from operations                          (712,051)       (986,152)          (9,537,444)

Other income(expenses)
   Interest income                                 18,815          23,227              103,742
   Interest and penalty expense                   (14,035)        (14,774)            (267,405)
   Other                                           (3,490)          1,914              (40,750)
                                             ------------    ------------         ------------
       Total other income(expense)                  1,290          10,367             (204,413)
                                             ------------    ------------         ------------

Loss before income taxes                         (710,761)       (975,785)          (9,741,857)

Income tax provision                                 --              --                    (32)
                                             ------------    ------------         ------------

Net loss                                     $   (710,761)   $   (975,785)        $ (9,741,889)
                                             ============    ============         ============

Loss per common share attributable to
   common stockholders
     Basic and Fully Diluted                       $(.022)         $(.033)


Weighted average common shares outstanding     33,101,871      29,434,226


</TABLE>



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

                                      -6-

<PAGE>

<TABLE>

<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                   Six months ended June 30, 2000 and 1999 and
           Period from November 12, 1986 (inception) to June 30, 2000


                                                                  Six months ended                 Period from
                                                                      June 30,                  November 12, 1986
                                                               2000             1999            to June 30, 2000
                                                          ------------     ------------         ----------------
<S>                                                       <C>              <C>                  <C>
Cash flows from operating activities
   Net loss                                               $   (710,761)    $   (975,785)        $   (9,741,889)
   Non-cash charges included in operations
     Allowance for doubtful accounts                                                                    65,062
     Depreciation and amortization                              28,982           21,792                159,899
     Common stock issued for services and interest             167,629          231,169              2,454,342
     Note payable issued for services                                -                -                  6,860
     Common stock issued for services and
       accrued expenses                                              -                -                187,672
     Provision for doubtful notes receivable                         -                -                 52,754
     Common stock issued for interest payable                        -                -                141,296
     Loss on assets                                                  -                -                 15,000
     Advances to stockholder expensed to consulting                  -                -                 57,706
   Changes in assets and liabilities
     Accounts receivable                                         6,350              193                 (7,469)
     Accrued interest receivable                               (16,087)          16,537                (65,264)
     Deposits                                                        -                -                (31,767)
     Other assets                                                5,332           15,147                (52,675)
     Accounts payable and accrued expenses                     (63,650)        (241,867)               433,812
     Accrued payroll and payroll taxes                         169,587          136,611              1,089,219
                                                          ------------     ------------          -------------
       Net cash used for operating activities                 (412,618)        (795,933)            (5,235,442)

Cash flows from investing activities
   Capital expenditures                                              -          (66,433)              (837,940)
   Loans made                                                        -          (77,500)              (315,748)
   Loan repayments                                                   -            8,200                 94,500
   Other                                                             -                -                (15,050)
                                                          ------------     ------------          -------------
       Net cash used for investing activities                        -         (135,733)            (1,074,238)

Cash flows from financing activities
   Stock sale expenses                                               -                -                (11,716)
   Proceeds from sale of common stock                          405,249          897,862              4,574,888
   Proceeds from notes payable                                 120,199            5,000              2,574,270
   Principal repayments of notes payable                       (89,999)          (6,822)              (727,018)
   Principal payments on capital lease obligations             (15,893)          (5,934)               (88,219)
   Proceeds from preferred stock sale                                -                -                 20,000
   Repurchase of preferred stock                                     -                -                (11,319)
   Preferred dividends paid                                          -                -                 (5,834)
                                                          ------------     ------------          -------------
       Net cash provided by financing activities               419,556          890,106              6,325,052

Increase (decrease) in cash                                      6,938          (41,560)                15,372

</TABLE>

                                  - continued -

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

                                      -7-

<PAGE>

<TABLE>

<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                                   (Unaudited)
                     Six months ended June 30, 2000 and 1999
         and Period from November 12, 1986 (inception) to June 30, 2000

                                                                  Six months ended                 Period from
                                                                      June 30,                  November 12, 1986
                                                               2000             1999            to June 30, 2000
                                                         -------------    -------------         ----------------
<S>                                                      <C>              <C>                   <C>

Cash at beginning of period                                      8,434           47,506                      -
                                                         -------------    -------------          -------------
Cash at end of period                                    $      15,372    $       5,946          $      15,372
                                                         =============    =============          =============

Cash flow information:
   Interest paid                                           $     9,361      $    14,774            $   112,669
   Income taxes paid                                       $         -      $         -            $        32

Non-cash investing activities:
   Repayment of note receivable - non cash method          $         -      $         -            $    21,000
   Common stock issued for:
     Acquisition of Triple A                               $         -      $         -            $         -
     Acquisition of NIAI                                   $         -      $         -            $    10,000
     Acquisition of VISI                                   $         -      $         -            $       434
     Oil lease                                             $         -      $         -            $    40,000

Non-cash financing activities:
   Preferred stock issued for:
     Note payable-related party                            $         -      $         -            $    60,000
     Accrued interest-related party                        $         -      $         -            $     4,500
     Accrued expenses-related party                        $         -      $         -            $    25,500

Common stock issued for:
   Repayment of notes payable                              $     5,199      $   151,318            $ 1,424,434
   Payment of interest                                     $        49      $    11,574            $   141,346
   Payment of accounts payable and exp reimbursement       $         -      $         -            $    15,000
   Conversion of preferred stock                           $         -      $         -            $   100,000
   Payment of preferred stock dividend                     $         -      $         -            $    25,556
   Notes Receivable                                        $         -      $   123,972            $   753,034
   Equipment                                               $         -      $         -            $    25,000

Note payable issued for services                           $         -      $         -            $     6,860
Assignment of oil lease in payment of note payable         $         -      $         -            $    40,000

Common stock acquired for conversion of
   note receivable                                         $         -      $         -            $     6,406

Common stock canceled for conversion of
   note receivable                                         $         -      $         -            $     5,600

Additions to equipment under capital leases                $         -      $         -            $   107,631

</TABLE>


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

                                      -8-

<PAGE>

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1.  BASIS OF PRESENTATION

The consolidated  interim  financial  statements  include the accounts of Viking
Capital  Group,  Inc.  and  its  wholly  owned  subsidiaries  (collectively  the
"Company").

The consolidated interim financial statements included herein have been prepared
by the Company,  without  audit,  pursuant to the rules and  regulations  of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally accepted  accounting  principals  ("GAAP") have been condensed or
omitted  pursuant to such rules and  regulations,  although the Company believes
that  the  disclosures  are  adequate  to make  the  information  presented  not
misleading.  It  is  suggested  that  these  financial  statements  be  read  in
conjunction  with  the  consolidated  financial  statements  and  related  notes
included in the Company's  Form 10-KSB as of and for the year ended December 31,
1999.

In the opinion of  management,  the  unaudited  interim  consolidated  financial
statements of the Company contains all adjustments,  consisting only of those of
a normal recurring nature,  necessary to present fairly the Company's  financial
position  and the  results  of its  operations  and cash  flows for the  periods
presented.  The  preparation  of financial  statements in  accordance  with GAAP
requires  management  to make  estimates  and  assumptions.  Such  estimates and
assumptions  affect the reported amounts of assets and  liabilities,  as well as
the  disclosures  of  contingent  assets  and  liabilities  at the  date  of the
financial  statements,  and the reported  amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

2.  SOFTWARE DEVELOPMENT COSTS

The Company has capitalized  certain  software  development  costs in accordance
with SFAS No. 86 (see below).

During 1999, the Company began to amortize software costs of $96,962  associated
with the  development  of an  e-commerce  web-site  and web based  demonstration
software  associated  with IP Banker and Benefits IP, using an estimated  useful
life of three years. The remaining  software  development costs of $666,767 will
be  amortized  over three  years when  placed in  service.  However,  management
periodically  evaluates  the  recoverability,   valuation  and  amortization  of
capitalized software cost and may begin amortizing such costs prior to placement
into service.

Financial  Accounting  Standard  No. 86,  "Accounting  for the Cost of  Computer
Software  to  be  Sold,  Leased,  or  Otherwise  Marketed",   provides  for  the
capitalization  of certain costs  related to  development  of computer  software
products.   Capitalized   computer   software   costs   include   direct  labor,
labor-related  overhead costs and interest.  The software will be amortized over
its  expected  useful life of 3 years after it is placed in service.  Management
periodically  evaluates  the  recoverability,   valuation  and  amortization  of
capitalized  software  cost.  As part of this review,  management  considers the
undiscounted  projected  future net  earnings.  If the  undiscounted  future net
earnings are less than the stated value,  software costs will be written down to
fair value.

3.  RELATED PARTY TRANSACTIONS

During the current quarter, the Company entered into $20,000 of promissory notes
payables  with  related  parties.  At June  30,  2000,  there  were  $20,000  in
promissory notes payable with related parties.

                                      -9-

<PAGE>

4.  OPTIONS ISSUED

During the current quarter,  the Company granted 36,667 common  restricted share
options  exercisable  at $0.45 per share.  All of these options are  exercisable
within one year and expire within one year and were issued in  conjunction  with
common  restricted stock sales. The company also issued 26,241 common restricted
share options  exercisable at $0.30 per share. These options are exercisable and
expire within one year and were issued in  conjunction  with the conversion of a
promissory note.

5.  OTHER

The financial  statements  have been prepared on the assumption that the Company
will continue as a going concern. The Company's continued existence depends upon
the success of management's  efforts to raise  additional  capital  necessary to
meet the Company's obligations as they come due and to obtain sufficient capital
to execute its business plan.

There can be no degree of assurance given that the Company will be successful in
completing additional financing transactions. Should the Company be unsuccessful
in its efforts to obtain adequate  financing,  it's current financial  condition
may be affected adversely, and such affects may be material.

6.  EVENTS SUBSEQUENT TO JUNE 30, 2000

Subsequent to June 30, 2000,  approximately  sixteen  hundred common  restricted
shares  were issued in  connection  with a  promissory  note.  The Company  also
reserved  shares for  performance  based  options for one million  five  hundred
thousand common restricted shares. These options are to be exercisable only upon
the occurrence of certain financial events should they occur within one year. If
and when the options become  exercisable,  they will expire within two years and
are exercisable at the rate of one dollar per share.






                                      -10-

<PAGE>


Item 2. Management's Discussion and Analysis or Plan of Operations.

This  Quarterly  Report  on  Form  10-QSB  contains  certain   "forward-looking"
statements as such term is defined in the Private  Securities  Litigation Reform
Act of 1995 and information  relating to the Company and its  subsidiaries  that
are based on the beliefs of the Company's management as well as assumptions made
by and information currently available to the Company's management. When used in
this  report,  the  words  "anticipate,"  "believe,"  "estimate,"  "expect"  and
"intend" and words or phrases of similar  import,  as they relate to the Company
or  its   subsidiaries   or  Company   management,   are  intended  to  identify
forward-looking   statements.   Such  statements   reflect  the  current  risks,
uncertainties  and  assumptions  related to certain factors  including,  without
limitations,   changes  or  anticipated  changes  in  regulatory   environments,
competitive   factors,   general  economic   conditions,   customer   relations,
relationships  with  vendors,   the  interest  rate  environment,   governmental
regulation  and  supervision,   seasonality,   distribution  networks,   product
introductions  and  acceptance,   technological  change,   changes  in  industry
practices,  onetime  events  and other  factors  described  herein  and in other
filings made by the company with the Securities and Exchange  Commission.  Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize,  or should  any  underlying  assumptions  prove  incorrect,  actual
results  may  vary  materially  from  those  described  herein  as  anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.

Material Changes in Results of Operations

The  current  and prior  quarter's  activities  have been  focused  on  reducing
operating  costs and continuing  efforts to explore growth through  acquisition.
Management is using more than one source for potential  candidates  and believes
that an acquisition will result from such activities.

Prior to and  including  the current  quarter,  the Company has been  engaged in
preparing the necessary business alliances and relationships to fulfill its full
plan of  operations  including  both growth  through  acquisitions  of insurance
companies  and growth  through  building of  technology  based  revenue  streams
through non-acquisition  methods. The company's plan for non-acquisition revenue
growth  has  focused  on its  business  model of being  an  application  service
provider (ASP),  formerly referred to as a "service bureau environment",  in fee
and  transaction  fee  generating  areas.  These areas consist of internet based
banking(IP Banker) , securities trading (IP Trader), human resource/benefit plan
information  (Benefits IP), life insurance information relevant to policyholders
and agents (Universal IP) and direct marketing organizations (IP Marketer).

In support of these  goals,  the Company  has  developed  software  capabilities
encompassing various aspects of each of these functions and is currently focused
on pursuing bank clients.  Sales efforts for bank clients have been hampered due
to lack of funds for sales support and financial  stability  factors required to
compete effectively. The Company has also developed strategic partners to handle
secure communications and bandwidth needs, implementation requirements,  ongoing
maintenance,  upgrade and training needs. The Company's marketing niche is small
to medium sized banks,  credit  unions,  S&L's etc.  focusing on their desire to
retain  their  current  customer  base and  enhance  fee  income  in the face of
sweeping  regulatory changes and increased services based competition  primarily
from larger institutions. Each service provided by or proposed to be provided by
the Company to a bank is added to the basic on-line banking service and marketed
through/with our bank client. Our business model generates additional fee income
for our clients by sharing fee income generated through the bank depositors' use
of  different  services.  The  business  model  has been  well  received  in the
marketplace and the Company intends to continue to pursue these customers.

The lack of  availability  of cash has been a  detriment  to the  Company in two
areas.  The  first  area  is  that   insurance   company  targets  have   almost
exclusively   desired   a   cash   purchase   and    the   Company    has    not

                                      -11-

<PAGE>

been able to move fast enough before a competitor buys a potential  target.  The
second area is that without a larger cash balance,  bank customers are not eager
to sign  contracts for reasons of  stability.  While a lack of cash has hindered
the  Company's  progress,  management  does not believe that it will  ultimately
prevent the Company from moving forward.

Management   is  actively   considering   options  for  the  Company   including
acquisitions of revenue producing technology companies,  with stock, that fit or
complement our business  model.  Other companies may be considered if management
believes that its assets or contracts,  for example, would enhance the Company's
ability to generate revenues and raise additional capital.  Management believes,
based upon  discussions  with  potential  targets,  that a stock  acquisition of
another  company  that is  currently  producing  revenue is  viable.  Technology
companies are far more desirous of public  company status and are therefore more
accepting of a non-cash  transaction  than insurance  companies.  This method of
growth is acceptable  to Viking  management.  The Company is actively  reviewing
acquisition  candidates as the most  expedient way to move the Company  forward.
The Company has also considered the spin-off of one or more of its  subsidiaries
to unlock shareholder value.

The  Company is pursuing  and  intends to  continue to pursue its full  business
plan. On the insurance acquisition front, the Company continues to be solicited,
and  continues  to  entertain  such  solicitations,  by various  state and local
government  entities to place future acquired  insurance company  administrative
operations  in their  state or local  area.  The  Company  is  seeking  economic
incentive packages in the $20 to $30 million range in incentives and grants from
such entities.  It is anticipated that this administrative  business will employ
between 1,200 and 1,450 people.  The Company has also been  solicited by various
money managers to manage our future insurance  company  portfolios.  The Company
has currently  required that  soliciting  money managers must also be willing to
take an equity position in the Company.  Such  discussions  are ongoing.  If the
Company is successful in implementing  its plan of operations,  the Company will
be required to lease,  acquire, or construct  significant  additional facilities
and  equipment  and hire  substantial  additional  employees  to carry  out such
operations.

Material Changes in Financial Condition, Liquidity and Capital Resources

In  connection  with its efforts to attract  capital and  implement  its plan of
business,  the Company  incurred losses for the quarters ended June 30, 2000 and
1999,  of $267,755  and  $485,738  respectively.  The  reduction  in cost is due
primarily  to  reduced  costs  associated  with  employees,   consultants,   and
contractors.  The  Company  generated  $2,674 in revenue  related to the sale of
Video  Conferencing PCs and a specialty  Multimedia board for PCs in the quarter
ended June 30,  2000 versus  $0.00 for the same  period in 1999.  The Company is
continuing its efforts at overall cost reduction.

At June 30,  2000,  the Company had cash on hand of $15,372,  current  assets of
$95,750  including  cash and  $7,674 in  accounts  receivable,  total  assets of
$975,056 and liabilities totaling $630,756 excluding accrued officer's salary of
$1,104,221.  The  Company  anticipates  that the funds on hand will not  sustain
current  operations  beyond  the  first six  months  and are not  sufficient  to
implement any of the Company's full plan of operations. Accordingly, in order to
sustain  operations past such period and to implement the Company's full plan of
operations,  the Company must secure additional funds. There can be no degree of
assurance that the Company will be successful in securing  additional  funds. If
the Company is  successful  in  implementing  its full plan of  operations,  the
Company will be required to lease, acquire or construct  significant  additional
facilities and equipment and hire substantial  additional employees to carry out
such operations.





                                      -12-

<PAGE>

                           PART II - OTHER INFORMATION

Item 2. Changes in Securities

Prior to and during the quarter  ended June 30,  2000,  the Company  sold common
restricted  shares (Class A Common) in a private  placement under exemption from
registration under the Securities Act pursuant to Section 4(2) and Regulation D,
Rule 506. Sales have been made to accredited investors only. On November 2, 1999
the first sale of this private  placement of up to $500,000 was consummated.  As
of  5/08/00,  $500,000 of this  private  placement  have been sold  representing
1,666,667 common restricted shares at $0.30 per share and options to purchase an
additional  833,333 common restricted shares at $0.45 per share or 1.5 times the
original price paid for the common restricted shares. In summary for the current
quarter, 173,333 common restricted shares were purchased for cash, 72,334 common
restricted  shares  were  issued for  services  rendered  at $0.30 per share and
26,241  common  restricted  shares were  purchased  pursuant to  conversion of a
promissory  note.  These shares were issued under  exemption  from  registration
pursuant to Section 4(2) and/or Regulation D, Rule 506.

Item 5. Other Information

         The Company's common stock trades on the OTC Electronic Bulletin Board.
Its symbol is "VGCP".

         Company  information can be found on the World Wide Web. The address is
www.vcgi.com.

Item 6.  Exhibits and Reports

                  Exhibit 21.1      List of subsidiaries of the Registrant
                  Exhibit 27.1      Financial Data Schedule









                                      -13-


<PAGE>


                                  EXHIBIT INDEX
                                  -------------

EXHIBIT
NUMBER           DESCRIPTION
-------          -----------

21.1             List of Subsidiaries of the Registrant
27.1             Financial Data Schedule










                                      -14-

<PAGE>


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                 VIKING CAPITAL GROUP, INC.

Dated: August 8,  2000                           By:  /s/ William J. Fossen
                                                 -------------------------------
                                                 William J. Fossen, President


Dated: August 8, 2000                            By:  /s/ Matthew W. Fossen
                                                 -------------------------------
                                                 Matthew W. Fossen
                                                 Chief Financial Officer







                                      -15-