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

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

                                    FORM 10-Q
(Mark One)

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

         For the quarterly period ended March 31, 2001

                                       OR

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

         For the transition period from _______________ to __________________

                         Commission file number 0-26809


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

         DELAWARE                                          91-1962104
(State or Other Jurisdiction            (I.R.S. Employer Identification No.)
of Incorporation or Organization)

                              1940 West 11th Avenue
                  Vancouver, British Columbia, V6J 2C6, Canada
                    (Address of principal executive offices)

                                 (604) 687-7661
              (Registrant's telephone number, including area code)

         Indicate  by check  mark  whether  the  registrant:  (1) has  filed all
documents  and  reports  required  to be  filed  by  section  13 or 15(d) of the
Securities  Exchange  Act of 1934  during the  preceding  12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes |X| No __

     The number of outstanding shares of common stock,  $0.001 par value, of the
     registrant at April 25, 2001 was 7,172,647.



<PAGE>






                                ASPI EUROPE, INC.
                          (A Development Stage Company)
                             INDEX TO THE FORM 10-Q
                  For the quarterly period ended March 31, 2001
<TABLE>
                                                                                                         Page

<S>              <C>                                                                                     <C>

PART I  --  FINANCIAL INFORMATION.........................................................................1

         ITEM 1.   FINANCIAL STATEMENTS...................................................................1

                  CONSOLIDATED CONDENSED BALANCE SHEETS...................................................1
                  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS.........................................3
                  CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT...............................3
                  CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS.........................................5
                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS....................................6

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS...............................................................9

         ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.............................12

PART II  --  OTHER INFORMATION...........................................................................13

         ITEM 1.  LEGAL PROCEEDINGS......................................................................13

         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS..............................................13

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES........................................................13

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................................13

         ITEM 5.  OTHER INFORMATION......................................................................13

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.......................................................13

         SIGNATURES......................................................................................15

</TABLE>



<PAGE>






                         PART I -- FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS


                                ASPI EUROPE, INC.
                          (A Development Stage Company)

                      CONSOLIDATED CONDENSED BALANCE SHEETS


<TABLE>
<S>                                                                     <C>                <C>
                                                                     March 31,         December 31,
                                                                  2001 (unaudited)         2000
------------------------------------------------------------------------------------------------------------
ASSETS
Current Assets
   Cash and cash equivalents                                        $  2,326            $  1,217
   Prepaid expenses and deposits                                         -                 2,130
------------------------------------------------------------------------------------------------------------
Total Current Assets                                                   2,326               3,347
------------------------------------------------------------------------------------------------------------
Total Assets                                                        $  2,326            $  3,347
------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
   Accounts payable                                                 $127,144            $129,574
   Due to related party                                               37,578              32,010
   Convertible note payable                                          135,959             132,876
   Loan payable                                                       50,932                   -
------------------------------------------------------------------------------------------------------------
Total Current Liabilities                                            351,613             294,460
------------------------------------------------------------------------------------------------------------
Stockholders' Deficit
   Common stock, $.001 par value; 50,000,000 shares authorized,
   7,172,647 issued and outstanding                                    7,173               7,173
   Additional paid-in capital                                      2,319,524           2,319,524
   Deficit accumulated during the development stage               (2,675,984)         (2,617,810)
------------------------------------------------------------------------------------------------------------
Total Stockholders' Deficit                                         (349,287)           (291,113)
------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit                         $  2,326            $  3,347
------------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated condensed financial statements.


                                       1
<PAGE>





                                ASPI EUROPE, INC.
                          (A Development Stage Company)
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
       FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2001 AND MARCH 31, 2000
                                   (Unaudited)
<TABLE>

                                               Cumulative Amounts
                                                for the period
                                                from Inception
                                                (August 17, 1984)
                                                Through March 31,         Three Months Ended March 31,
                                                     2001                 2001                    2000
--------------------------------------------------------------------------------------------------------------------
<S>     <C>    <C>                                <C>                    <C>                     <C>
 OPERATING EXPENSES
   General and administrative                   $   539,011             $ 54,159             $  195,364
   Financial consulting fee                       1,156,000                    -              1,156,000
   Depreciation and amortization                      6,146                    -                      -
   Interest expense, net                            100,997                4,015                    500
--------------------------------------------------------------------------------------------------------------------
   Total operating expenses                       1,802,154               58,174              1,351,864
--------------------------------------------------------------------------------------------------------------------
   Loss from continuing operations               (1,802,154)             (58,174)            (1,351,864)
--------------------------------------------------------------------------------------------------------------------

  DISCONTINUED OPERATIONS
   Loss from discontinued operations             (1,073,946)                   -                (29,826)
   Gain on disposal of assets                       200,116                    -                268,981
--------------------------------------------------------------------------------------------------------------------
   Net gain (loss) from discontinued               (873,830)                   -                239,155
   operations
--------------------------------------------------------------------------------------------------------------------
   Net loss
                                               $ (2,675,984)           $ (58,174)           $(1,112,709)
--------------------------------------------------------------------------------------------------------------------
  Net gain (loss) per share -
   Continuing operations                                               $   (0.01)           $     (0.16)
   Discontinued operations                                                 (0.00)                  0.03
--------------------------------------------------------------------------------------------------------------------
   Net loss per share - basic and diluted                              $   (0.01)           $     (0.13)
--------------------------------------------------------------------------------------------------------------------
   Weighted average number of shares of
    common stock outstanding - basic
    and diluted                                                        7,172,647              8,396,449
--------------------------------------------------------------------------------------------------------------------

     See accompanying notes to consolidated condensed financial statements.
</TABLE>

                                       2
<PAGE>





                                ASPI EUROPE, INC.
                          (A Development Stage Company)

            CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
<TABLE>
<S>                                        <C>            <C>            <C>             <C>                <C>
                                             Common Stock             Additional         Deficit
                                                                                       Accumulated
                                                                                       During the
                                                                   Paid-in Capital  Development Stage       Total
                                         Shares         Amount
------------------------------------------------------------------------------------------------------------------------
ASPi Europe, Inc. Activities             100,000      $   100       $    900          $       -          $  1,000
(Formerly Shopping Sherlock, Inc.):
 Issuance of common stock for cash

Net loss                                       -            -              -             (1,000)           (1,000)
------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1985               100,000          100            900             (1,000)                -

Activity January 1986 through
December 31, 1997                              -            -              -                  -                 -
------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997               100,000          100            900             (1,000)                -

 Issuance of common stock for
   reinstatement fees - July 20,
   1998                                  900,000          900          1,179                  -             2,079

 Net loss                                      -            -              -             (2,079)           (2,079)
------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998             1,000,000        1,000          2,079             (3,079)                -

Sale of common stock for cash
   ($.05/share) - February 17, 1999    5,000,000        5,000        245,000                  -           250,000

Sale of common stock for cash
   ($1.00/share) - April 16, 1999      1,000,000        1,000        999,000                  -         1,000,000

Issuance of common stock for
   acquisition of Shopping Sherlock
   - Delaware - May 26, 1999           2,000,000        2,000         (2,000)                 -                 -

Cash distributed to significant
   shareholder - May 26, 1999                  -            -       (150,000)                 -          (150,000)

Beneficial conversion discount of
   convertible debt - December 14,
   1999                                        -            -         37,500                  -            37,500

Net loss                                       -            -              -         (1,220,228)       (1,220,228)
------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999             9,000,000        9,000      1,131,579         (1,223,307)          (82,728)

Conversion of convertible note
   payable ($2.40/share) - January
   21, 2000                               63,116           63        151,415                  -           151,478

Stock options granted for officer
   compensation - February 7, 2000             -            -         68,334                  -            68,334

Redemption of common stock for
   software license - March 14,
   2000 ($0.175/share)                (2,000,000)      (2,000)     (348,000)                  -          (350,000)

Stock warrants issued for financial
   consulting fee - March 17, 2000             -            -      1,156,000                  -         1,156,000

Beneficial conversion discount of
   convertible debt - May 17, 2000             -            -         31,250                  -            31,250

Beneficial conversion discount of
   convertible debt - July 12, 2000            -            -         25,000                  -            25,000

Conversion of convertible note
   payable ($0.95/share) - December
   7, 2000                               109,531          110        103,946                  -           104,056
------------------------------------------------------------------------------------------------------------------------

</TABLE>


                                       3
<PAGE>




                                ASPI EUROPE, INC.
                          (A Development Stage Company)

              CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

<TABLE>
<S>                                             <C>                       <C>              <C>                 <C>
                                           Common Stock                                Deficit
                                                                                     Accumulated
                                         Shares     Amount         Additional         During the
                                                                Paid-in Capital     Development Stage       Total
----------------------------------------------------------------------------------------------------------------------
(Continued)
Net loss                                    -           -                  -             (1,394,503)        (1,394,503)
----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000          7,172,647       7,173          2,319,524             (2,617,810)          (291,113)

Net loss (Unaudited)                        -           -                  -                (58,174)           (58,174)
----------------------------------------------------------------------------------------------------------------------

Balance, March 31, 2001 (Unaudited) 7,172,647     $ 7,173       $  2,319,524           $ (2,675,984)        $ (349,287)
----------------------------------------------------------------------------------------------------------------------
     See accompanying notes to consolidated condensed financial statements.

</TABLE>


                                       4
<PAGE>





                                ASPI EUROPE, INC.
                          (A Development Stage Company)
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
       FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2001 AND MARCH 31, 2000
                                  (Unaudited )

                   INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
                                                           Cumulative
                                                        Amounts for the
                                                          period from
                                                           Inception
                                                          (August 17,               Three Months Ended
                                                             1984),                     March 31,
                                                                             ---------------------------------
<S>                                                             <C>               <C>               <C>
                                                            Through               2001              2000
                                                         March 31, 2001
-------------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities
 Net loss                                               $(2,675,984)          $ (58,174)        $(1,112,709)
 Adjustments to reconcile net loss to net cash used
  in operating activities
 Discount amortization on convertible note payable           93,750                   -                   -
 Loss on assets held for liquidation                        157,274                   -              41,263
 Gain on PLIC stock redemption agreement                   (350,000)                  -            (350,000)
 Stock based compensation expense                            68,334                   -              68,334
 Stock warrants issued for agency agreement               1,156,000                   -           1,156,000
 Depreciation                                                 6,146                   -                   -
 Change in assets and liabilities:
  Restricted cash                                                 -                   -              17,813
  Prepaid expenses and deposits                                   -               2,130              20,040
  Accounts payable                                          127,144              (2,430)             91,556
  Due to related party                                       37,578               5,568               3,430
  Accrued interest on convertible note payable               16,493               3,083                 862
  Accrued interest on loan payable                              932                 932                   -
--------------------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities                    (1,362,333)            (48,891)            (63,411)
--------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
 Proceeds from sale of net assets to be disposed of          24,500                   -               2,000
 Purchase of furniture and equipment                       (116,189)                  -                   -
 Increase in note receivable                                (71,731)                  -                   -
--------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Investing Activities        (163,420)                  -               2,000
--------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Proceeds from issuing common stock                        1,253,079                   -                   -
Proceeds from convertible notes payable                     375,000                   -                   -
Proceeds from loan payable                                   50,000              50,000                   -
Distribution to stockholder                                (150,000)                  -                   -
--------------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities                 1,528,079              50,000                   -
--------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents          2,326               1,109             (61,411)
Cash and Cash Equivalents, beginning of period                    -               1,217              93,127
--------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, end of period                $     2,326          $    2,326         $    31,716
--------------------------------------------------------------------------------------------------------------
Non-cash Financing Activity
Conversion of note payable to common stock              $   255,534          $        -         $   151,478
--------------------------------------------------------------------------------------------------------------

     See accompanying notes to consolidated condensed financial statements.
</TABLE>


                                       5
<PAGE>



                                ASPI EUROPE, INC.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1.  BUSINESS DESCRIPTION

ASPi Europe,  Inc.  (the  "Company")  is a  development  stage  company that was
incorporated in the State of Florida on August 17, 1984,  under the name of AIDA
Industries,  Inc. From its inception until July 20, 1998,  there was no activity
within the  Company.  On July 20,  1998,  the Company  amended  its  Articles of
Incorporation  to provide  for a thousand  to one  (1000:1)  stock split and was
quoted on the OTC Bulletin  Board.  The Company  began  operations in January of
1999, and on March 24, 1999, the Company changed its name from AIDA  Industries,
Inc. to Shopping Sherlock, Inc.

On May 26, 1999, the Company entered into an acquisition agreement with Shopping
Sherlock, Inc. ("SSI"), a corporation organized and incorporated in the State of
Delaware on January 20, 1999, for the purpose of developing and implementing its
website hosting and e-business services as well as developing its own e-commerce
website to sell  consumer  products  over the  Internet  through  discounts  and
purchase rebates to its customers. The Company acquired 100% of the common stock
of SSI in  exchange  for the  issuance  of a total of  2,000,000  shares  of the
Company's common stock to the stockholders of SSI, which primarily  consisted of
Premier  Lifestyles  International   Corporation  ("PLIC")  and  Stewart  Family
Partners (the "Partnership").

On  January 2,  2000,  the  Company's  board of  directors  decided to cease its
website hosting and e-business services as well as its e-commerce operations due
to a lack of working capital and disappointing financial results. On January 27,
2000, the Company  entered into the Stock  Redemption  and Settlement  Agreement
(the "Redemption  Agreement")  with PLIC, the  Partnership,  and Richard Stewart
under  which  the  Company  agreed  to  transfer  a  worldwide,   non-exclusive,
perpetual,  fully-paid-up  license to use,  distribute or make derivative  works
from  the  Company's   software   designed  to  operate  and  host  websites  in
consideration for the redemption of the 2,000,000 shares of the Company's common
stock that PLIC and the Partnership owned or had a right to purchase.

On March 14,  2000,  the  shareholders  of the Company at a special  shareholder
meeting approved of the terms of the Redemption  Agreement and, as a result, the
2,000,000  shares of common stock that PLIC and the  Partnership  owned or had a
right to purchase  were redeemed by the Company and were deemed  authorized  but
unissued shares of the Company pursuant to Florida law.

Due to the  Company's  lack of success in  launching  its  website  hosting  and
e-business services as well as its e-commerce  business,  the Company decided to
change its  business  focus and explore the  possibility  of  acquiring a viable
operating  company  in a  different  industry.  On March 8,  2000,  the  Company
announced  that it entered  into a letter of intent to acquire all of the issued
and outstanding  equity securities of it-softdialog AG ("ITAG"),  an established
information  technology  consulting company with its headquarters in Germany. In
anticipation  of the closing of the proposed  acquisition  of ITAG,  the Company
received  shareholder  approval on May 2, 2000, to change its name from Shopping
Sherlock, Inc. to ASPi Europe, Inc., and on May 5, 2000, the Company changed its
name to ASPi  Europe,  Inc.  On May 18,  2000,  the Company  announced  that the
proposed  acquisition  would  likely not proceed  according  to the terms of the
letter of intent,  and soon  thereafter  both parties  agreed to  terminate  any
further negotiations.

On July 5, 2000, the Company announced that it had entered into separate letters
of intent to acquire all of the issued and outstanding equity securities of Blue
Dragon  Technologies  GmbH, a web-based  software  solutions  consulting company
located in Germany, and WebTech Ltd., an information technology business located
in Bulgaria (the "Target Companies"),  which are owned by the same shareholders.
On September 1, 2000,  the Company  announced that it would not proceed with the
acquisition of the Target Companies.

On September 26, 2000, the shareholders of the Company at the annual shareholder
meeting approved of the redomicile of the Company's place of incorporation  from
Florida to  Delaware by merging  the  Company  with and

                                       6
<PAGE>


into its newly created,  wholly-owned  subsidiary ASPi Europe,  Inc., a Delaware
corporation.  On  December  19,  2000,  Articles  of Merger  were filed with the
Florida  Secretary of State and a Certificate  of Merger was filed with Delaware
Secretary of State,  which formally resulted in the redomicile of the Company to
the State of Delaware.

On January 12,  2001,  the Company  announced  that it entered  into a letter of
intent to acquire all of the issued and outstanding equity securities of Digital
Snaps Inc., a Vancouver,  British  Columbia-based  application  service provider
("DSI"),  which offers  applications  that  facilitate  the flow of  information
between  manufacturers  and  retailers.  The  tentative  terms for the  proposed
acquisition  involve the Company  issuing up to 21,350,000  shares of its common
stock in consideration  for all of the issued and outstanding  shares of capital
stock of DSI. Under the terms of the letter of intent, the Company must raise at
least $1.0 million in equity capital prior to closing the proposed  transaction.
Under the terms of the proposed transaction,  it is anticipated that some of the
executives of DSI will assume senior executive  positions and will be invited to
join the board of  directors  of the Company.  There can be no  assurances  that
management will be able to complete the proposed acquisition of DSI or raise the
necessary equity capital.

NOTE 2.  BASIS OF PRESENTATION

The accompanying  consolidated condensed financial statements of the Company are
unaudited  and  include,  in the  opinion of  management,  all normal  recurring
adjustments  necessary  to present  fairly the  consolidated  condensed  balance
sheets  as of  March  31,  2001,  and  the  related  statements  of  operations,
stockholders'  deficit  and  cash  flows  for  the  periods  presented.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance  with  generally  accepted  accounting  principles in the
United  States of America have been  condensed or omitted  pursuant to the rules
and regulations of the Securities and Exchange  Commission  (the  "Commission").
These consolidated  condensed financial statements should be read in conjunction
with the Company's fiscal 2000 audited consolidated financial statements and the
related  notes  thereto  included  in the  Company's  Form 10-K  filed  with the
Commission on March 1, 2001.

The Company has been in the development stage since its inception. It has had no
significant  operating revenue to date, has accumulated losses of $2,675,984 and
will require additional working capital to sustain its minimal operations. These
circumstances raise substantial doubt as to the Company's ability to continue as
a going concern.

On January 12, 2001, the Company  entered into a letter of intent to acquire all
the  issued  and  outstanding  equity  securities  of DSI (See  Note 1).  If the
proposed  acquisition  of DSI is  completed,  the Company  expects  that it will
evaluate  and acquire  strategic  partners to build its  customer  base.  If the
proposed transaction is completed, the Company anticipates it will require up to
an additional $4.0 million of additional equity capital to fund the acquisitions
and future  operations.  There can be no assurances that management will be able
to  complete  the  proposed  acquisition  of DSI or raise the  necessary  equity
capital.

NOTE 3.  NET LOSS PER SHARE

Basic loss per share is computed by dividing  net loss by the  weighted  average
number of common stock outstanding.  Per share information for all prior periods
have been adjusted to reflect the 1,000:1 stock split declared on July 20, 1998.
As of March 31, 2001, the Company had  outstanding  options to purchase  160,000
shares of common stock and  outstanding  warrants to purchase  50,000  shares of
common  stock which were not  included in the  calculation  of loss per share as
their effect was anti-dilutive.

NOTE 4.  STOCK WARRANTS

On March 17, 2000, the Company entered into an agency  agreement with DJ Limited
("DJL") and issued 50,000 warrants to DJL to purchase the Company's common stock
at a purchase price of $14.50 per share. These warrants will expire on March 15,
2005. The agency  agreement,  which expired on June 16, 2000,  called for DJL to
raise capital for the Company,  on a best efforts  basis,  to close the proposed
acquisition of ITAG and provide  additional  working capital.  The warrants were
issued as  compensation  for  undertaking  the  capital  raising  efforts of the
Company. The warrants were accounted for under EITF 96-18 "Accounting for Equity
Instruments  That Are  Issued  to Other  Than  Employees  for  Acquiring,  or in
Conjunction  with  Selling,  Goods or Service" such that the relative fair value
ascribed to the warrants will be measured under the  Black-Scholes  method.  The
Company recorded $1,156,000 as a financial consulting fee and additional paid-in
capital for the first quarter ended March 31, 2000.

                                       7
<PAGE>


NOTE 5.  CONVERTIBLE NOTES PAYABLE

On May 17, 2000,  the Company  received  proceeds of $125,000 by entering into a
10% subordinated  convertible note with Manhattan Investments  Incorporated (the
"Manhattan  Note"),  which,  along with accrued interest,  was due on August 31,
2000.  The note is  convertible  at the  option of the holder at 80% of the last
reported  sale  price  of the  Company's  common  stock as  reported  on the OTC
Bulletin  Board on the date of  conversion.  The quoted price for the  Company's
stock on May 17, 2000 was $6.50,  resulting  in a deemed  beneficial  conversion
feature and discount of $31,250,  which was recorded as an interest  expense and
an increase to additional paid-in capital.  On October 12, 2000, the Company and
Manhattan Investments Incorporated agreed in writing to extend the maturity date
of the  Manhattan  Note to July 31,  2001.  On April 10,  2001,  the Company and
Manhattan Investments  Incorporated,  amended the Manhattan Note in writing such
that the interest payment previously due on January 31, 2001 is now due on April
30, 2001.

NOTE 6.  LOAN PAYABLE

On January 22, 2001, the Company received proceeds of $50,000 by entering into a
10% promissory note with an individual,  which, along with accrued interest,  is
due on May 18, 2001.

NOTE 7.  RECLASSIFICATION

The  Company  has  reclassified  amounts  presented  in prior  period  financial
statements  to  properly   disclose  the  operating  results  of  the  Company's
discontinued operations.


                                       8
<PAGE>




ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Certain statements and information contained in this Quarterly Report constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking  statements involve known and unknown
risks,  uncertainties  and other  factors  that may cause  the  actual  results,
performance or achievements of the Company,  or developments in the Company,  to
differ  materially  from the  anticipated  results,  performance or achievements
expressed  or  implied  by  such  forward-looking  statements.  Such  risks  and
uncertainties  include,  but are not limited to: the  difficulty  in  predicting
future  performance,   history  of  losses,   need  for  additional   financing,
uncertainty  about its ability to continue as a going  concern,  risk related to
future  acquisitions  and strategic  alliances,  dependence on key personnel and
directors' and officers' involvement in other projects.  Such factors related to
the Company's  proposed  acquisition of Digital Snaps Inc. ("DSI") include,  but
are  not  limited  to:  DSI's  limited  operating  history,  dependence  on  key
personnel,  reliance  on key  third-party  relationships,  risks  involving  the
management  of  growth,  product  development  risks and risks of  technological
change,  competition,  and the Company's  ability to protect DSI's  intellectual
property rights.  Other risks and  uncertainties  are described in the Company's
10-K  filed with the  Commission  on March 1, 2001.  "We,"  "our,"  "us" and the
"Company" refer to ASPi Europe,  Inc., our subsidiary,  and the Company's former
corporate names AIDA Industries, Inc. and Shopping Sherlock, Inc.

Overview

The Company was  incorporated in Florida on August 17, 1984, under the name AIDA
Industries,  Inc. The Company began  operations in January of 1999, and on March
24, 1999 changed its name from AIDA Industries, Inc. to Shopping Sherlock, Inc.

On May 26, 1999,  the Company  acquired all the issued and  outstanding  capital
stock of  Shopping  Sherlock,  Inc.,  a Delaware  corporation  ("SSI"),  for the
purpose of  developing  and  implementing  its website  hosting  and  e-commerce
services  as well as  developing  its own  e-commerce  website to sell  consumer
products  over the  Internet  through  discounts  and  purchase  rebates  to its
customers.  The Company acquired 100% of the common stock of SSI in exchange for
the issuance of a total of 2,000,000 shares of the Company's common stock to the
stockholders   of  SSI,  which   primarily   consisted  of  Premier   Lifestyles
International   Corporation   ("PLIC")   and  Stewart   Family   Partners   (the
"Partnership").  At the time of the acquisition,  the controlling shareholder of
SSI was Richard Stewart and, as a result of the acquisition,  Mr. Stewart became
a director and 20% shareholder of the Company. Mr. Stewart is also the President
and Chief Executive Officer of PLIC.

Due to a lack of working  capital  and  disappointing  financial  results in the
fiscal year 1999,  the Company's  board of directors  decided on January 2, 2000
that it would cease its website  hosting and e-business  services as well as its
e-commerce  operations.  The  Company's  operations  did not  generate  material
traffic or revenues in the fiscal year ended  December 31, 1999, and its efforts
to raise  additional  significant  sources of capital  were  unsuccessful.  As a
result,  the  Company  decided to  conserve  its  remaining  cash  reserves  and
terminated  office  leases,   reduced  staff,   terminated  all  management  and
consulting  contracts,  and significantly  reduced resources directed at keeping
its e-commerce site operational.

On  January  27,  2000,  the  Company  entered  into the  Stock  Redemption  and
Settlement Agreement (the "Redemption Agreement") with PLIC, the Partnership and
Richard  Stewart  under  which the  Company  agreed  to  transfer  a  worldwide,
non-exclusive,  perpetual,  fully-paid-up  license  to use,  distribute  or make
derivative  works from the  Company's  software  designed  to  operate  and host
websites in consideration  for the redemption of approximately  2,000,000 shares
of common  stock by the  Company  that PLIC and the  Partnership  owned or had a
right to purchase.

At a special shareholder meeting held on March 14, 2000, the shareholders of the
Company approved of the terms of the Redemption  Agreement and, as a result, the
2,000,000  shares of common stock were deemed  authorized but unissued shares of
the Company  pursuant to Florida law. The software license had a deemed value of
approximately  $350,000 based on the actual expenditures incurred by the Company
to develop the software in 1999.

                                       9
<PAGE>


Due to the  Company's  lack of success in  launching  its  website  hosting  and
e-business services and its e-commerce operations, the Company decided to change
its business focus and explore the  possibility of acquiring a viable  operating
company in a different industry. On March 8, 2000, the Company announced that it
entered  into a letter of intent to acquire  all of the  issued and  outstanding
equity  securities  of ITAG.  In  anticipation  of the  closing of the  proposed
acquisition of ITAG, the Company received  shareholder  approval on May 2, 2000,
to change its name from Shopping Sherlock,  Inc. to ASPi Europe,  Inc. On May 5,
2000,  the Company  changed its name to ASPi Europe,  Inc. On May 18, 2000,  the
Company  announced  that the  proposed  acquisition  would  likely  not  proceed
according to the terms of the letter of intent, and soon thereafter both parties
agreed to terminate any further negotiations.

On July 5, 2000, the Company announced that it had entered into separate letters
of intent to acquire all of the issued and outstanding  equity securities of the
Target Companies.  On September 1, 2000, the Company announced that it would not
proceed with the acquisition of the Target Companies.

At  the  Annual  Meeting  of  Shareholders  held  on  September  26,  2000,  the
shareholders  approved the  redomicile of the Company's  place of  incorporation
from Florida to Delaware by merging the Company with and into its  newly-created
wholly-owned  subsidiary ASPi Europe, Inc., a Delaware corporation.  On December
19, 2000,  Articles of Merger were filed with the Florida Secretary of State and
a Certificate  of Merger was filed with the Delaware  Secretary of State,  which
formally resulted in the redomicile of the Company to the State of Delaware.

On January 12,  2001,  the Company  announced  that it entered  into a letter of
intent to acquire all of the issued and  outstanding  equity  securities of DSI.
The tentative terms for the proposed  acquisition involve the Company issuing up
to 21,350,000  shares of common stock in consideration for all of the issued and
outstanding shares of capital stock of DSI. The Company must raise at least $1.0
million in equity capital prior to closing the proposed  transaction.  Under the
terms of the proposed transaction, it is anticipated that some of the executives
of DSI will assume  senior  executive  positions and will be invited to join the
board of directors of the Company.

The Company anticipates that it will require an additional $4.0 million in order
to fund the proposed  acquisition of DSI as well as fund its operations over the
next twelve (12) months.  If the proposed  acquisition  of DSI is not completed,
the Company  anticipates  it would  require an  additional  $240,000 to fund its
operations and search for alternative business targets over the next twelve (12)
months,  which the Company would seek to raise through  either a private debt or
equity offering. The Company currently has sufficient working capital to support
its current minimum operations through May 2001.

The Company is currently exploring various financing alternatives, including the
possibility of an additional private equity offering. There can be no assurance,
however, that such financing will be available to the Company or, if it is, that
it will be  available  on terms  acceptable  to the  Company.  If the Company is
unable to obtain the financing  necessary to support its operations,  its may be
unable to continue as a going concern.

The Company  currently  has no business  operations  and has not  generated  any
material revenues to date. If the proposed  acquisition of DSI is not completed,
the  Company   intends  to  continue  to  identify  and   evaluate   alternative
transactions  with other  viable  operating  companies  and raise the  necessary
funds.  Furthermore,  even  if  the  transaction  of  DSI  is  completed  or  an
alternative  transaction is identified and completed,  there can be no assurance
that the Company will generate any material revenues in the future.

Results of Operations

The  results of  operations  include  the  results of the Company and its wholly
owned  subsidiary,  SSI.  In  January  2000,  SSI  became  inactive  due  to the
curtailing of substantially all operations of the Company and,  thereafter,  all
administration operations of the Company were performed in the parent company.

For the Three  Months  Ended March 31, 2001  Compared to the Three  Months Ended
March 31,2000

General and  Administrative  Expenses  From  Continued  Operations.  General and
administrative expenses consist of rent, secretarial services, telephone expense
and other general corporate expenses.  General and administrative

                                       10
<PAGE>


expenses  were $54,159 for the three months ended March 31, 2001,  compared with
$195,364 for the three months ended March 31, 2000. This decrease  reflected the
substantial decrease in activity related to the review and evaluation of various
business  opportunities.  Professional  fees were  $40,810 for the three  months
ended March 31, 2001, compared with $56,674 for the three months ended March 31,
2000. The  professional  fees relate to the costs  associated with the Company's
periodic  reporting  obligations  and  proposed  acquisitions.   General  office
expenses,  including rent,  telephone and courier expenses,  were $1,600 for the
three months ended March 31,  2001,  compared  with $16,005 for the three months
ended March 31,  2000.  Management  fees were $9,000 for the three  months ended
March 31, 2001 and the three months  ended March 31, 2000.  There were no travel
and accommodation  expenses for the three months ended March 31, 2001,  compared
with  $38,172  for the three  months  ended  March 31, 2000 when the Company was
evaluating a business  opportunity in Europe. There were no non-cash stock-based
compensation  costs for the three  months ended March 31,  2001,  compared  with
$68,334 for the three  months ended March 31,  2000.  The  non-cash  stock-based
compensation  cost is due to the grant of 20,000  options to  management  of the
Company during the first quarter of 2000.  The charge  represents the difference
between the reported fair market value of the Company's common stock as reported
on the OTCBB on the date of grant and the  exercise  price of the  option.  This
compensation cost is presented as an addition to additional paid-in capital.

Financial consulting fees. There were no financial consulting fees for the three
months ended March 31, 2001, compared with $1,156,000 for the three months ended
March  31,  2000.  The fee was  due to the  issuance  of  50,000  warrants  to a
financial  consultant  during the first  quarter of 2000  pursuant  to an agency
agreement  whereby the  financial  consultant  was to raise  capital,  on a best
efforts basis, for the Company. The fee represents the valuation of the warrants
based on the Black-Scholes method as at issuance. This amount is presented as an
addition to additional paid-in capital.

Depreciation and amortization.  The Company recorded no depreciation expense for
the three months ended March 31, 2001 and the three months ended March 31, 2000.

Interest,  net. Net interest  costs were $4,015 for the three months ended March
31, 2001  compared  with $500 in net  interest  costs for the three months ended
March 31, 2000.

Income  Taxes.  The Company has not  generated  any taxable  income to date and,
therefore,  has not paid any federal income taxes since inception.  Deferred tax
assets created primarily from net operating loss  carryforwards  have been fully
reserved as  management is unable to conclude  that future  realization  is more
likely than not.

Net Gain From  Discontinued  Operations.  The Company ceased all of its business
operations on January 2, 2000 and, as a result,  combined all operating revenues
and expenses related to the previous business under discontinued operations. The
Company recorded no gain from discontinued operations for the three months ended
March 31, 2001,  compared with a net gain of $239,155 for the three months ended
March 31, 2000. The net gain from  discontinued  operations for the three months
ended  March 31,  2000,  included  a gain on the sale of a  software  license of
$350,000, cost of revenue from discontinued operations of $15,812, technical and
system development expenses of $10,979, sales and marketing expenses amounted to
$5,305,  general and  administrative  expenses of $42,884,  and the write-off of
$35,865 for the remaining balance of a loan to a third-party.

Liquidity and Capital Resources

As at March 31, 2001, the Company's  consolidated cash position was $2,326,  and
the  consolidated  working  capital  deficit  was  $349,287,   compared  with  a
consolidated cash position of $1,217 and a consolidated  working capital deficit
of $291,113 as at December 31, 2000.

Since   inception,   the  Company  has  financed  its  operations  from  capital
contributions  from  shareholders  and the issuance of subordinated  convertible
notes or promissory  notes.  On January 21, 2000, the Company and the noteholder
of the $150,000  convertible  promissory note originally  issued on December 14,
1999 agreed to convert  this note into  63,116  shares of the  Company's  common
stock.  On May 17, 2000,  the Company issued a $125,000  convertible  promissory
note with a maturity  date of August 31, 2000 ("May 2000 Note").  On October 12,
2000,  the Company and the  noteholder  agreed in writing to extend the maturity
date of the May 2000 Note to July 31, 2001. On July 12, 2000, the Company issued
a $100,000  convertible  promissory  note with a maturity  date of July 31, 2001

                                       11
<PAGE>


("July 2000 Note").  On December 7, 2000, the Company and the noteholder  agreed
to convert the July 2000 Note, together with the accrued interest,  into 109,531
shares of the Company's  common stock. On January 22, 2001, the Company issued a
promissory  note in the amount of $50,000 with a maturity  date of May 18, 2001.
The Company  currently  has  sufficient  working  capital to support its current
minimum operations through May 2001.

The Company  anticipates  that it will require an additional $4 million in order
to close the proposed  acquisition of DSI and fund the operations of the Company
over the next twelve (12)  months.  If the  proposed  acquisition  of DSI is not
completed,  the Company  anticipates it would require an additional  $240,000 to
fund its operations over the next twelve (12) months. There can be no assurance,
however, that such financing will be available to the Company or, if it is, that
it will be  available  on terms  acceptable  to the  Company.  If the Company is
unable to obtain the financing  necessary to support its  operations,  it may be
unable to continue as a going concern.  The Company currently has no commitments
for any credit facilities such as revolving credit agreements or lines of credit
that could provide additional working capital.

Net cash used in  operating  activities  was $48,891 for the three  months ended
March 31,  2001,  compared to $63,411 for the three months ended March 31, 2000,
including a net loss of $58,174 and  $1,112,709,  respectively.  The decrease in
net  cash  used  in  operating  activities  is  due to  the  discontinuation  of
operations.  The Company's  current  operating  expenditures  are  approximately
$20,000 per month.

The Company had no capital asset  transactions  for the three months ended March
31, 2001,  compared with a sale of capital assets of $2,000 for the three months
ended March 31, 2000.

On  December  1, 2000,  the Company  terminated  its lease for the office  space
located in  Seattle,  Washington.  The  Company is  currently  using space in an
office owned by one of the Company's  directors in Vancouver,  British  Columbia
for administrative purposes at no cost to the Company.

Non-Qualified Stock Options

As at March 31, 2001, the Company had outstanding non-qualified stock options to
purchase  160,000  shares  of the  Company's  common  stock  issued  to  various
employees,  consultants and directors  pursuant to its stock option plan.  These
stock options  entitle  holders to purchase  common stock at a price of $5 or $6
depending on which year the stock options vest.  The Company has 840,000  shares
available for future issuance pursuant to its 1999 Stock Option Plan.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company believes that it does not have any material  exposure to interest or
commodity risks. The Company does not own any derivative  instruments,  does not
engage in any hedging  transactions and does not have any outstanding  long-term
debt.


                                       12
<PAGE>



PART II  --  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits

               2.1(1) Agreement  and Plan of Merger dated as of December 7, 2000
                      by and between the registrant and ASPi Europe, a Delaware
                      corporation
               2.2(2) Letter of Intent dated January 11, 2000 by and between the
                      registrant, Digital Snaps Inc., Alternative Funding Inc.,
                      Gordon Kleaman, Ayaz Virani,  Harold  Forzley, and Premier
                      Financial
               3.1(2) Certificate of Incorporation
               3.2(2) Bylaws
               4.1(3) Form of Common Stock Share Certificate
              10.1(3) 1999 Stock Option Plan
              10.2(3) Form of Stock Option Agreement
              10.3(4) Agency  Agreement dated March 15, 2000 by and between the
                      registrant and DJ Limited
              10.4(5) Credit  Facility  Agreement  dated  May 17,  2000 by and
                      between the registrant and Manhattan Investments
                      Incorporated
              10.5(6) First Allonge to the  Promissory  Note dated May 17, 2000
                      made  by  registrant  in  favor  of  Manhattan Investments
                      Incorporated dated October 12, 2000
              10.6(6) Promissory  Note dated  January  22, 2001 by and  between
                      the registrant  and  Ricardo Requena
              10.7    Second  Allonge to the  Promissory Note dated May 17, 2000
                      made by registrant in favor of Manhattan Investments
                      Incorporated dated April 10, 2001
              99.1    Risk Factors

               (1)  Incorporated  by reference to the Company's  Form 10-K filed
                    on March 1, 2001.
               (2)  Incorporated by reference to the Company's Form 8-K filed on
                    January 2, 2001.
               (3)  Incorporated  by  reference  to the  Company's  Registration
                    Statement on Form 10 (No. 000-26809).
               (4)  Incorporated  by reference to the Company's  Form 10-K filed
                    on March 30,  2000.
               (5)  Incorporated  by  reference to the Company's Form 10-Q filed
                    on  August  14,   2000.
               (6)  Incorporated  by reference to the Company's  Form 10-Q filed
                    on November 8, 2000.



                                       13
<PAGE>

              (b)  Reports on Form 8-K

                   No reports on Form 8-K were filed during the period.


                                       14
<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has  duly  caused  this  report  on its  behalf  by the  undersigned
thereunto duly authorized.


                                        ASPI EUROPE, INC.

April 26, 2001                          /s/ Damon Poole
                                        --------------------------------
                                        Damon Poole, Chief Executive Officer


April 26, 2001                         /s/  Patrick McGrath
                                        ----------------------------------
                                        Patrick McGrath, Chief Financial Officer




                                       15
<PAGE>



                                EXHIBIT INDEX


Exhibit   Description
Number

2.1(1)    Agreement  and Plan of  Merger dated as of  December  7,  2000 by and
          between the registrant and ASPi Europe, a Delaware corporation
2.2(2)    Letter  of  Intent  dated  January  11,  2000  by and  between  the
          registrant,  Digital  Snaps Inc.,  Alternative  Funding  Inc.,  Gordon
          Kleaman, Ayaz Virani, Harold Forzley, and Premier Financial
3.1(2)    Certificate of Incorporation
3.2(2)    Bylaws
4.1(3)    Form of Common Stock Share Certificate
10.1(3)   1999 Stock Option Plan
10.2(3)   Form of Stock Option Agreement
10.3(4)   Agency Agreement dated March 15, 2000 by and between the registrant
          and DJ Limited
10.4(5)   Credit Facility  Agreement  dated  May  17,  2000 by and  between  the
          registrant and Manhattan Investments Incorporated
10.5(6)   First  Allonge to the  Promissory  Note dated May 17,  2000 made by
          the  registrant in favor of Manhattan Investments Incorporated dated
          October 12, 2000
10.6(6)   Promissory Note dated January 22, 2001 by and between the registrant
          and Ricardo Requena
10.7      Second Allonge to the  Promissory  Note dated May 17, 2000 made by the
          registrant in favor of Manhattan Investments  Incorporated dated April
          10, 2001
99.1      Risk Factors


(1) Incorporated by reference to the Company's Form 10-K filed on March 1, 2001.
(2) Incorporated by reference to the Company's Form 8-K filed on January 2,2001.
(3) Incorporated by reference to the Company's Registration Statement on Form 10
    (No. 000-26809).
(4) Incorporated by reference to the Company's Form 10-K filed on March 30,2000.
(5) Incorporated by reference to the Company's Form 10-Q filed on August 14,
    2000.
(6) Incorporated by reference to the Company's Form 10-Q filed on November 8,
    2000.

<PAGE>

                                  EXHIBIT 99.1

PRIVATE   SECURITIES   LITIGATION   REFORM  ACT  OF  1995  -  SAFE   HARBOR  FOR
FORWARD-LOOKING STATEMENTS

The Private Securities  Litigation Reform Act of 1995 provides a safe-harbor for
forward-looking statements made by public companies. This safe-harbor protects a
company  from  securities  law  liability  in  connection  with  forward-looking
statements if the company complies with the requirements of the safe-harbor.  As
a public  company,  the  Company  has  relied and will  continue  to rely on the
protection  of  the  safe  harbor  in  connection  with  its  written  and  oral
forward-looking statements.

When evaluating the Company's business, you should consider:

     o    all of the information in this quarterly report on Form 10-Q;

     o    the risk factors  described in the Company's  Form 10-K filed with the
          Securities and Exchange Commission on March 1, 2001; and

     o    the risk factors described below.

                                  RISK FACTORS

Although  the  Company   believes  that  the   expectations   reflected  in  its
forward-looking  statements are reasonable,  the Company cannot guarantee future
results, levels of activity, performance or achievements or other future events.
Moreover,  neither the Company nor anyone else  assumes  responsibility  for the
accuracy or completeness of forward-looking  statements. You should consider the
Company's forward-looking  statements in light of the following risk factors and
other  information in this quarterly report. If any of the risks described below
occurs,  the Company's  business,  results of operation and financial  condition
could differ from those projected in its forward-looking statements. The Company
is under no duty to update any of its forward-looking  statements after the date
of the quarterly report.  You should not place undue reliance on forward-looking
statements.

Risks to the Company related to its current business situation

         The Company is subject to certain risks related to its current business
situation. These risks also could cause actual results to differ materially from
results projected in any forward-looking statement in this quarterly report.

The Company has abandoned its business  operations,  which makes it difficult to
predict its future performance.

The Company commenced operations in January 1999, and subsequently abandoned its
business  operations in January 2000.  The Company is currently  negotiating  to
acquire an  operating  business  entity that is a digital  exchange  application
service provider.  The Company,  however, has no historical operating history in
this  industry  upon which an  evaluation  of its business and  prospects can be
based.  As a result,  in view of the rapidly  evolving  nature of the  Company's
business situation,  the Company believes that  period-to-period  comparisons of
financial  results are not necessarily  meaningful and should not be relied upon
as an indication of future performance.

The Company has a history of losses, expects future losses and may never achieve
profitability.

The  Company  has not  achieved  profitability  and expects to continue to incur
operating losses for the foreseeable  future. The Company incurred net losses of
$58,174 for the three months ended March 31, 2001,  and  $1,394,503,  $1,220,228
and $2,079 for the  respective  years ended  December 31,  2000,  1999 and 1998,
respectively.  The Company has not had any material  revenue in recent years, it
has never been profitable and there can be no assurance that, in the future, the
Company will be profitable on a quarterly or annual basis.  In addition,  if the
Company  plans to acquire an operating  business  entity,  as is  proposed,  its
operating expenses will increase significantly.
<PAGE>

The Company will need additional  financing to support its operations and may be
unable to obtain it on commercially reasonable terms, or at all.

The  Company  can satisfy  its  current  cash  requirements  through May 2001 at
current  minimum  levels.  Accordingly,   the  Company  must  raise  substantial
additional  funds to continue as a going  concern and to complete  the  proposed
acquisition  of DSI.  There is no  assurance  that the  Company  will be able to
secure  financing or that such financing will be obtained on terms  favorable to
the Company. Failure to obtain adequate financing raises substantial doubt as to
the  Company's  ability  to  acquire  an  operating  business  entity as well as
continue as a going concern.

There is  uncertainty  regarding  the  Company's  ability to continue as a going
concern.

The Company has been in the development stage since its inception. It has had no
significant operating revenues to date, has accumulated losses of $2,675,984 and
will  require  additional  working  capital to sustain  current  operations  and
complete any proposed future  acquisition.  This raises  substantial doubt as to
the Company's ability to continue as a going concern.

The  Company  is  subject  to risks  as it makes  acquisitions  and  engages  in
strategic alliances.

As  part  of its  business  strategy,  the  Company  intends  to  acquire,  make
investments  in, and enter into  strategic  alliances  with as yet  unidentified
operating  companies.  Any such future  acquisitions,  investments  or strategic
alliances  would  involve  risks,  such as  incorrect  assessment  of the value,
strengths  and   weaknesses  of  acquisition   and   investment   opportunities;
underestimating  the difficulty of  integrating  the operations and personnel of
newly  acquired  companies;  the potential  disruption of any ongoing  business,
including  possible  diversions of resources and management time; and the threat
of impairing  relationships  with employees and customers as a result of changes
in management or ownership.

There can be no assurance that the Company will be able to successfully overcome
these  risks.   Moreover,  the  Company  cannot  be  certain  that  any  desired
acquisition, investment or strategic alliance can be made in a timely manner, on
terms and  conditions  acceptable  to the  Company or that the  Company  will be
successful in identifying attractive acquisition candidates. The Company expects
that  competition  for such  acquisitions  may be  significant.  The Company may
compete with others who have similar acquisition strategies, many of whom may be
larger and have greater financial and other resources than the Company.

The Company depends upon key personnel.

The  Company's  future  operating  results are  substantially  dependent  on the
continued  service and  performance of its senior  personnel:  Damon Poole,  the
Company's  President  and Chief  Executive  Officer,  and Patrick  McGrath,  the
Company's Chief Financial Officer,  Treasurer and Secretary. The Company intends
to hire additional  executives  should it acquire an operating  business entity.
See "Note Regarding Forward-Looking  Statements." Competition for such personnel
is intense,  and there can be no  assurance  that the Company can retain its key
employees  or  that  it will be  able  to  attract  or  retain  highly-qualified
technical and  managerial  personnel in the future.  The loss of the services of
any of the Company's  senior  management or other key employees or the inability
to attract and retain the necessary technical or managerial personnel could have
a material  adverse  effect upon the Company's  business,  financial  condition,
operating  results and cash flows. The Company does not currently  maintain "key
man" insurance for any senior management or other key employees.

Directors and Officers are involved in other projects.

Many of the officers and directors of the Company  serve as directors,  officers
and/or employees of companies other than the Company.  For example,  Damon Poole
and Patrick McGrath,  the Company's Chief Executive  Officer and Chief Financial
Officer,  respectively,  currently  act  as  independent  consultants  to  other
companies. All of the Company's current officers devote, on average, at least 10
hours per week to the Company. While the Company believes that such officers and
directors devote adequate time to effectively  manage the Company,  there can be
no assurance that such other  positions will not negatively  impact an officer's
or director's duties for the Company.

                                       2
<PAGE>


Risks to the Company related to its proposed acquisition of DSI

The Company will be subject to certain risks related to the proposed acquisition
of DSI. These risks could cause actual results to differ materially from results
projected in any forward-looking  statement in this quarterly report.  There can
be no  assurance  that the Company  will be able to  successfully  complete  the
proposed acquisition of DSI.

DSI has a limited  operating  history,  which makes it  difficult to predict its
future performance.

DSI commenced  operations in September 1999. DSI, therefore,  has only a limited
operating  history upon which an evaluation of its business and prospects can be
based.  Prior to 1999,  DSI had no  operations  or revenues.  In  addition,  the
Company  expects  changes to occur in DSI should the Company  acquire DSI, as is
proposed,  as an operating business entity. As a result, in view of the evolving
nature of DSI's business and limited  operating  history,  the Company  believes
that period-to-period comparisons of DSI's financial results are not necessarily
meaningful  and  should  not be relied  upon as an  indication  of DSI's  future
performance.

DSI depends upon key personnel.

DSI is currently  dependent upon its senior  management,  board of directors and
consultants,  the loss of any of which may significantly  affect its performance
and  its  ability  to  carry  out  the  continued  successful   development  and
commercialization  of its  products  and  services.  Any  failure  to retain its
management,  directors and  consultants or to attract and retain  additional key
employees with necessary  skills could have a material adverse impact upon DSI's
and,   therefore,   the  Company's  growth  and  profitability.   Following  the
acquisition  of  DSI,  the  Company  will  be  required  to  recruit  additional
personnel,  expand its direct sales force, expand its customer support functions
and  train,  motivate  and  manage  its  employees.  Competition  for  qualified
personnel is intense and is expected to increase. There can be no assurance that
the  Company  will be able to recruit  the  personnel  required  to execute  its
programs or to manage these changes successfully.

DSI relies on key third party relationship to conduct its business.

DSI relies on key third party relationships.  These third parties are not within
the control of DSI,  and may not be obligated  to maintain  these  relationships
with  DSI  upon the  Company  acquiring  DSI.  The  loss of  these  third  party
relationships  could have a material  adverse effect on the Company's  business,
financial condition, operating results and cash flows.

The digital exchange  application  service provider market must continue to grow
and customers must continue to utilize the Company's products and services.

The overall  market for  digital  exchange  application  service  providers  has
experienced  significant  growth in recent years. There can be no assurance that
the market for DSI's existing or proposed  products or services will continue to
grow, that companies  within the industry will utilize its products or services,
or that  following the  acquisition  of DSI by the Company,  the Company will be
successful in independently  establishing  markets for its products or services.
If the various markets in which the Company's  products or services will compete
fail to grow, or grow more slowly than the Company currently anticipates,  or if
the  Company is unable to  establish  product  markets  for its new  products or
services,  the Company's business,  results of operation and financial condition
would be materially adversely affected.

Substantial  competition  exists in the  digital  exchange  application  service
provider market.

Substantial  competition  exists in the  digital  exchange  application  service
provider market.  Additional  competitors with greater financial,  technical and
marketing  resources than the Company may enter the market and  competition  may
intensify.  Current or future competitors may develop products that are superior
to the Company's  products or achieve greater market  acceptance due to pricing,
sales channels or other factors,  which could have a material  adverse effect on
the Company's business, financial condition, operating results and cash flows.

                                       3
<PAGE>


New technologies  must be integrated into the Company's  products if they are to
remain competitive.

The digital  exchange  application  service  provider market is characterized by
rapidly changing  technology and evolving industry standards.  Therefore,  it is
difficult  to predict  the rate at which the market for the  Company's  services
will grow,  if at all,  should it  acquire  DSI and enter the  digital  exchange
application  service provider market. If the market fails to grow, or grows more
slowly than anticipated, the Company's business, financial condition and results
of operations would be materially  adversely  affected.  Even if the market does
grow,  there can be no  assurance  that the  Company's  products  would  achieve
commercial  success.  The  Company  may find  itself  competing  in a market for
customers  against other  companies with much greater  financial,  marketing and
other  resources.  Such  competitors  may be able to institute and sustain price
wars, imitate the features of the Company's  applications or software, or reduce
prices, the Company's revenues and DSI's current share of the market.

The  Company's  products  must  continually  be  improved  if they are to remain
competitive.

Following  the  acquisition,  the  Company  will be at risk if it is  unable  to
continually  upgrade and improve DSI's  products and develop new  products.  The
information  technology  industry is  characterized by a constant flow of new or
improved  products,   which  quickly  render  existing  products  obsolete.  The
Company's  competitors may develop  technically  superior and comparably  priced
products, which would have a material adverse effect on the Company's prospects.

The Company must seek to protect DSI's intellectual property.

The Company considers the technology of DSI and its other intellectual  property
to be of value and  important  to its  business.  At this time,  the  Company is
unaware  whether  DSI relies on  copyright,  trademark  and trade  secret  laws,
non-disclosure  agreements  or other  contractual  provisions  to establish  and
maintain its intellectual  property  rights.  The Company is aware that DSI does
not have any patents or patent  applications  pending.  Despite DSI's efforts to
protect  its  proprietary  rights,  unauthorized  parties may attempt to copy or
obtain and use  information  that DSI  regards as  proprietary.  There can be no
assurance  that the steps  taken by DSI to protect its  proprietary  information
will  prevent  misappropriation  of such  information.  The  cost of  litigation
necessary to enforce DSI's proprietary rights may be prohibitive. Such steps may
not preclude  competitors  from  developing  confusingly  similar brand names or
promotional  materials or developing  products and services  similar to those of
DSI.

Although  the  Company  believes  that  DSI  has  the  right  to use  all of the
intellectual property incorporated in its products, third parties may claim that
DSI's  products  violate their  proprietary  rights,  including  copyrights  and
patents. If any such claims are made and found to be valid, the Company may have
to reengineer  DSI's products or obtain  licenses from third parties to continue
offering its products. Any efforts to reengineer its products or obtain licenses
from third parties may not be successful  and could  substantially  increase the
Company's  costs and have a material  adverse effect on the business,  financial
condition and results of operations of the Company.

The  proposed  acquisition  of DSI will  involve a  significant  issuance of the
Company's  capital  stock  that will  result in a  substantial  decrease  in the
percentage ownership interest held by the Company's current stockholders.

Stockholders  of the Company will likely suffer a substantial  decrease in their
percentage  ownership  interest  in the  Company as a result of the  issuance of
additional  shares  of  capital  stock  pursuant  to the  terms of the  proposed
acquisition of DSI. This decrease in the percentage  ownership  interest held by
the  Company's  current  stockholders  will  result  in  a  reduction  in  their
proportional  voting  power  in  matters  submitted  to a vote of the  Company's
stockholders following the completion of the proposed acquisition of DSI.

                                       4
<PAGE>



                              Second Allonge to the
                   Promissory Note dated May 17, 2000 made by
                                ASPI EUROPE, INC.
                                   in favor of
                       MANHATTAN INVESTMENTS INCORPORATED

         THIS SECOND  ALLONGE to the  Promissory  Note,  dated May 17, 2000 (the
"Promissory  Note"),  made by ASPI  EUROPE,  INC., a Delaware  corporation  (the
"Company"), in favor of MANHATTAN INVESTMENTS INCORPORATED,  a Nevis corporation
("MAN"),  is made as of the 10th day of April,  2001 by and  between the Company
and MAN.

                                   BACKGROUND

         WHEREAS,  on May 17, 2000, MAN made a loan to the Company in the amount
of US $125,000 as evidenced by the Promissory Note, and such Promissory Note was
due and payable on or before August 31, 2000; and

         WHEREAS,  on October 12,  2000,  MAN and the Company  entered  into the
First Allonge (the "First  Allonge") to amend  certain  terms of the  Promissory
Note  whereby  accrued  interest on the  Promissory  Note was due and payable on
January 31, 2001 and August 31,  2001 and the  principal  was due and payable on
July 31, 2001; and

         NOW,  THEREFORE,  in  consideration  of the Company agreeing to pay the
accrued  interest to MAN as of April 30, 2001 instead of January 31,  2001,  the
Company and MAN hereby agree as follows:

         1. MAN will waive its  immediate  right to full payment of the interest
of the US $125,000  Promissory  Note due January  31,  2001,  and will amend and
restate the third paragraph of the Promissory Note to read as follows:

         "Interest  on this note shall accrue at a per annum rate of ten percent
(10%) and will be payable  April 30,  2001 and July 31,  2001.  The  outstanding
principal amount of this Note,  together with unpaid accrued  interest  thereon,
shall be due and payable in full on or before the Maturity Date."

         2. Except as amended herein, the Promissory Note shall continue in full
force and effect and shall be enforceable in accordance with its terms.  Nothing
herein contained shall constitute a novation of the Promissory Note.

          3. This Second  Allonge,  the First  Allonge and the  Promissory  Note
shall constitute a single instrument.

         IN WITNESS  WHEREOF,  the Company has caused this Second Allonge to the
Promissory Note to be signed by its duly  authorized  officer as of the 10th day
of April, 2001.

                                            ASPI EUROPE, INC.


                                            By:
                                                ---------------------------
                                            Name: Patrick McGrath
                                            Title: Chief Financial Officer

<PAGE>

                                           MANHATTAN INVESTMENTS INCORPORATED


                                            By:
                                                ----------------------------
                                            Name:  David Craven
                                            Title: Director



                                       2
<PAGE>