U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB
(Mark  One)
[X]     QUARTERLY  REPORT  UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934

               For the quarterly period ended:  September 30, 2001

                                       OR

[ ]     TRANSITION  REPORT  UNDER  SECTION  13  OR  15(d)  OF  THE EXCHANGE ACT
        For  the  transition  period  from                to
                                            -------------    ------------

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

                              CyPost Corporation
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

               Delaware                               98-0178674
     ----------------------------        ------------------------------------
     (State or other jurisdiction        (IRS Employer Identification Number)
   of incorporation or organization)

   900-1281  West Georgia St., Vancouver, British Columbia, Canada     V6E 3J7
   ---------------------------------------------------------------   -----------
          (Address  of  Principal  Executive  Offices)               (Zip  Code)

                                (604) 904-4422
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

                                 Not Applicable
    --------------------------------------------------------------------------
    (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 []

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity, as of the latest practicable date:  21,559,525 as of October 31,
2001.

     Transitional Small Business Disclosure Format (check one):  Yes [  ] No [X]


<PAGE>
                         PART I - FINANCIAL INFORMATION


ITEM  1.     FINANCIAL  STATEMENTS

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  reporting and pursuant to the rules and regulations of the Securities
and  Exchange  Commission  ("Commission").  While  these  statements reflect all
normal  recurring adjustments which are, in the opinion of management, necessary
for  fair presentation of the results of the interim period, they do not include
all  of  the information and footnotes required by generally accepted accounting
principles for complete financial statements.  For further information, refer to
the  financial  statements  and  footnotes  thereto,  which  are included in the
Company's  Annual  Report  on Form 10-KSB, as amended, for the fiscal year ended
December  31,  2000,  previously  filed  with  the  Commission.

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


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
                                         CYPOST CORPORATION AND SUBSIDIARIES
                                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                       SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
                                                    (U.S. DOLLARS)

                                                                             September 30, 2001    December 31, 2000
                                                                            --------------------  -------------------
                                                                                (Unaudited)            (Audited)
<S>                                                                         <C>                   <C>
ASSETS
  CURRENT ASSETS
   CASH                                                                     $           155,003   $          250,631
   ACCOUNTS RECEIVABLE, NET OF ALLOWANCE                                                273,585              173,207
   INSURANCE PROCEEDS RECEIVABLE                                                              -               58,488
   PREPAIDS AND DEPOSITS                                                                149,806              250,534
                                                                            --------------------  -------------------
  TOTAL CURRENT ASSETS                                                                  578,394              732,860

  PROPERTY AND EQUIPMENT, NET                                                           544,189              751,020

  GOODWILL AND OTHER INTANGIBLES, NET OF                                              1,819,127            3,193,015
   ACCUMULATED AMORTIZATION
  NOTE RECEIVABLE & ACCRUED INTEREST                                                    109,361                    -
  OTHER ASSETS                                                                            8,557                5,371
                                                                            --------------------  -------------------
                                                                            $         3,059,628   $        4,682,266
                                                                            ====================  ===================

   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
   ACCOUNTS PAYABLE & ACCRUED LIABILITIES                                   $         1,313,189   $        1,026,666
   STOCKHOLDERS' LOANS                                                                        -            2,110,000
   DEFERRED REVENUE                                                                     494,739              640,483
                                                                            --------------------  -------------------
 TOTAL CURRENT LIABILITIES                                                            1,807,928            3,777,149
                                                                            --------------------  -------------------
       COMMITMENTS AND CONTINGENCIES

   STOCKHOLDERS' EQUITY
            SHARE CAPITAL
            AUTHORIZED
                 5,000,000 PREFERRED STOCK WITH A PAR VALUE OF $.001
                 30,000,000 COMMON STOCK WITH A PAR VAUE OF $.001

   ISSUED AND OUTSTANDING
                 PREFERRED STOCK - NONE                                                       -                    -
                 COMMON STOCK 21,559,493 - 2001, 21,556,993 - 2000                       21,560               21,557
                 PAID-IN CAPITAL                                                     14,048,816           14,047,544
                 ACCUMULATED DEFICIT                                                (12,824,092)         (13,197,006)
                 CURRENCY TRANSLATION ADJUSTMENT                                          5,416               33,022
                                                                            --------------------  -------------------
   TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                               1,251,700              905,117
                                                                            --------------------  -------------------
                                                                            $         3,059,628   $        4,682,266
                                                                            ====================  ===================
</TABLE>

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


                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                                  CYPOST CORPORATION AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED  STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                            (U.S. DOLLARS)

                                                    Three Months Ended           Nine Months Ended
                                                       September 30,               September 30,
                                                --------------------------  --------------------------
                                                    2001          2000          2001          2000
                                                ------------  ------------  ------------  ------------
<S>                                             <C>           <C>           <C>           <C>

REVENUE                                         $   856,644   $ 1,292,162   $ 2,875,843   $ 3,686,467

DIRECT COSTS                                       (545,458)     (620,714)   (1,458,487)   (1,917,641)
                                                ------------  ------------  ------------  ------------
                                                    311,186       671,448     1,417,856     1,768,826
                                                ------------  ------------  ------------  ------------
EXPENSES
  SELLING, GENERAL AND
  ADMINISTRATIVE                                    492,164       683,271     1,838,163     3,094,888
  AMORTIZATION AND DEPRECIATION                     517,122       843,746     1,584,583     2,350,394
                                                ------------  ------------  ------------  ------------
                                                  1,009,286     1,527,017    (3,422,746)    5,445,282
                                                ------------  ------------  ------------  ------------

LOSS BEFORE OTHER INCOME
(EXPENSE)                                          (698,100)     (855,569)   (2,005,390)   (3,676,456)
                                                ------------  ------------  ------------  ------------
SETTLEMENT INCOME                                 2,498,599                   2,498,599
NET PROCEEDS FROM FIRE INSURANCE                          -        55,627             -       185,172
GAIN ON SALE OF INVESTMENT ON CYPOST KK                   -        36,202             -        36,202
INTEREST EXPENSE
  Beneficial conversion feature                           -             -             -    (1,927,500)
  Accrued interest expense                          (37,348)      (41,210)     (120,291)     (117,161)
  Interest expense                                        -          (136)            -          (580)
MINORITY INTEREST                                         -             -             -       108,656
                                                ------------  ------------  ------------  ------------
NET GAIN (LOSS)                                 $ 1,763,151   $  (805,086)  $   372,914   $(5,391,667)
                                                ------------  ------------  ------------  ------------

EARNINGS (LOSS) PER SHARE BASIC & DILUTED       $      0.08   $     (0.04)  $      0.02   $     (0.26)
                                                ============  ============  ============  ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING    21,559,493    21,395,319    21,558,660    21,061,557
                                                ============  ============  ============  ============
</TABLE>

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


                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                          CYPOST CORPORATION AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                    (U.S. DOLLARS)

                                                       SEPTEMBER 30,    SEPTEMBER 30,
                                                           2001             2000
                                                      ---------------  ---------------
<S>                                                   <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  NET INCOME (LOSS)                                   $      372,914   $   (5,391,667)
  Adjustments to reconcile net loss to cash used by
    operating activities:
         Settlement income and interest                   (2,498,599)               -
         Amortization and depreciation                     1,584,583        2,350,394
         Net proceeds from fire insurance                          -         (185,172)
         Beneficial conversion feature                             -        1,927,500
         Accrued interest expense                                  -          117,161
         Gain on sale of investment on CyPost KK                   -           36,202
                                                      ---------------  ---------------
                                                            (541,102)      (1,145,582)
  Changes in non-cash operating accounts                     559,509           86,710
                                                      ---------------  ---------------
NET CASH USED BY OPERATING ACTIVITIES                        (18,407)      (1,058,872)
                                                      ---------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of capital assets, net                            (77,221)        (332,628)
  Software development                                             -          (87,193)
  Acquisition of Playa Corporation                                 -         (300,000)
  Proceeds from sale of Investment in CyPost KK                    -          220,000
                                                      ---------------  ---------------
NET CASH USED IN INVESTING ACTIVITIES                        (77,221)        (499,821)
                                                      ---------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Loan proceeds
         Blue Heron Venture Fund, Ltd                              -        1,175,000
         Pacific Gate Capital Ltd.                                 -          125,000
         CyPost KK management                                      -           78,589
  Loan repayment
         Pacific Gate Capital Ltd.                                 -         (100,000)
                                                      ---------------  ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                          -        1,278,589
                                                      ---------------  ---------------

NET INCREASE IN CASH                                         (95,628)        (280,104)
CASH, BEGINNING OF PERIOD                                    250,631          415,779
                                                      ---------------  ---------------
CASH, END OF PERIOD                                   $      155,003   $      135,675
                                                      ===============  ===============
</TABLE>


                                      -5-
<PAGE>
                               CYPOST CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001
                                   (UNAUDITED)

                                 (U.S. DOLLARS)

1. BASIS  OF  PRESENTATION  AND  SIGNIFICANT  ACCOUNTING  POLICIES

   GOING  CONCERN

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

     Several  conditions  and  events  cast doubt about the Company's ability to
     continue  as  a  going  concern.  The  Company  has  incurred net losses of
     approximately $12.8 million for the period from inception September 5, 1997
     to  September 30, 2001, has a working capital deficit of approximately $1.2
     million  at  September  30, 2001, and requires additional financing for its
     business  operations.

     The  Company  is  streamlining  operations  and  consolidating its ISP's to
     enhance  efficiency  and  reduce  operating  expenses.  As  a result of the
     foregoing  efforts,  the  operations  of Intouch Internet Inc. and NetRover
     Office  Inc.  have  been  fully  condensed  consolidated into the Company's
     wholly-owned  subsidiary,  NetRover  Inc.

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

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

   INTERIM  FINANCIAL  STATEMENTS

     The interim condensed consolidated financial statements presented have been
     prepared  by  the  Company  without  audit  and,  in  the  opinion  of  the
     management,  reflect all adjustments of a normal recurring nature necessary
     for  a fair statement of (a) the consolidated results of operations for the
     three  and nine months ended September 30, 2001 and 2000, (b) the condensed
     consolidated financial position at September 30, 2001 and (c) the condensed
     consolidated  cash  flows  for the nine months ended September 30, 2001 and
     2000.  Interim results are not necessarily indicative of results for a full
     year.


                                      -6-
<PAGE>
     The  condensed consolidated balance sheet presented as of December 31, 2000
     has  been derived from the condensed consolidated financial statements that
     have  been  audited by the Company's independent auditors. The consolidated
     financial  statements  and  notes are condensed as permitted by Form 10-QSB
     and  do  not  contain  certain information included in the annual financial
     statements  and  notes of the Company. The condensed consolidated financial
     statements and notes included herein should be read in conjunction with the
     financial  statements  and notes included in the Company's Annual Report on
     Form  10-KSB.

   CONSOLIDATION

     The  condensed  consolidated  financial  statements include the accounts of
     CyPost  Corporation and its subsidiaries. In 2000, the subsidiaries include
     CyPost  KK,  Playa  Corporation, NetroverUSA Online Inc.( formerly known as
     ePost  Innovations  Inc.  see Canada Post Litigation below), Netrover Inc.,
     Netrover  Office Inc., Hermes Net Solutions Inc., and Intouch.Internet Inc.
     All of the subsidiaries, except CyPost KK, are wholly owned. Later in 2000,
     the  Company  sold its investment in CyPost KK and abandoned its investment
     in  Playa  Corporation.  Connect  Northwest  and  Internet Arena are DBA of
     CyPost Corporation. All significant inter-company transactions and balances
     have  been  eliminated  in  consolidation.

2. LOANS

     On  June  18,  2001  at  the request of Blue Heron Venture Fund, Ltd. (Blue
     Heron),  Blue  Heron  Notes in the aggregate principal amount of $2,085,000
     were  cancelled  and on June 19, 2001 new promissory notes (the "Blue Heron
     Shareholder  Notes")  in  the aggregate principal amount of $2,319,788 were
     issued  to  the  shareholders  of Blue Heron and Blue Heron's fund manager,
     Monet  Management  Group  Ltd.  The  principal  amount  of  the  Blue Heron
     Shareholder  Notes  was comprised of the $2,085,000 principal amount of the
     Blue  Heron  Notes and the $234,788 in interest due on the Blue Heron Notes
     at  the  time  of  cancellation.  The  Blue  Heron  Shareholder  Notes were
     unsecured and were payable on demand. $2,085,000 in principal amount of the
     Blue  Heron Shareholder Notes bore interest at 8% per annum. The balance of
     the  Blue  Heron  Shareholder  Notes  did  not  provide  for the payment of
     interest.

     On  September 20, 2001 the Company entered into a Settlement Agreement (the
     "Settlement Agreement") with Kelly Shane Montalban with regard to a lawsuit
     it  had  instituted  against  him  on  June  15,  2001 in the United States
     District  Court  for  the Southern District of New York seeking recovery of
     short  swing  profits  realized  by  Mr.  Montalban and other persons whose
     purchases  and  sales  of  Company  common  stock  were  attributed  to Mr.
     Montalban  in violation of Section 16(b)] of the Securities Exchange Act of
     1934,  as  amended  (see Shane Montalban Litigation below). Pursuant to the
     Settlement  Agreement,  Mr.  Montalban  paid  the  Company  an aggregate of
     approximately  $2,498,449 (the "Recovery Amount"), which amount represented
     recovery  in  full  of  Mr.  Montalban's  short swing profits. He did so by
     delivering  to  the Company for cancellation (1) the Blue Heron Shareholder
     Notes in the aggregate principal amount of $2,319,788, which notes had been
     previously  purchased  by  or  assigned  to  Mr. Montalban; (2) the accrued


                                      -7-
<PAGE>
     interest  of  $42,384  due  on  the  principal  portion  of  the Blue Heron
     Shareholder  Notes  at the time of cancellation; (3) 8% demand notes of the
     Company  dated August 25, 2000 and September 11, 2000, respectively, in the
     aggregate  principal  amount  of  $25,000  issued  to  Pacific Gate Capital
     Corporation,  a  corporation  owned  by  Mr.  Montalban  (the "Pacific Gate
     Capital  Notes");  and  (4)  the  accrued  interest  of  $2,066  due on the
     principal  portion  of  the  Pacific  Gate  Capital  Notes  at  the time of
     cancellation.  The  balance  of  the  Recovery  Amount  was  paid  by  Mr.
     Montalban's issuance to the Company of a five (5) year, 5% promissory note,
     dated  September  20,  2001,  in  the  principal  amount  of  $109,211.  In
     consideration  of  the execution of the Settlement Agreement and payment of
     the  Recovery  Amount, on October 9, 2001 the Company voluntarily dismissed
     its  action.

     The  Company  has  accrued  interest of $150 for the period September 20 to
     September  30,  2001.

3. COMMITMENTS  AND  CONTINGENCIES

   CANADA  POST  LITIGATION

     On  June  20,  2001  ePost Innovations, Canada Post and the Company entered
     into  a  Settlement and Release Agreement effective as of May 30, 2001 (the
     "Settlement  Agreement"). Pursuant to the Settlement Agreement, the parties
     executed  mutual  releases  and  discontinued  their respective claims. The
     release by Canada Post to ePost Innovations was made subject to the Company
     and ePost Innovations ceasing all use of the trade name EPOST within Canada
     within  90  days  of  the  effective  date  of the Settlement Agreement and
     transferring  all  right,  title  and interest they had with respect to the
     trade  name  and  trademark  EPOST and any goodwill associated therewith to
     Canada  Post upon execution of the Settlement Agreement. On August 30, 2001
     the  Company  changed the name of its subsidiary to NetRoverUSA Online Inc.
     All  other  terms  of  the  Settlement  Agreement  have been complied with.

   STEVEN  BERRY  LITIGATION

     On  March  31,  2000,  the  Company  commenced suit in the Supreme Court of
     British  Columbia,  Action  #S001822,  Vancouver Registry against Tia Berry
     (the  "Tia  Action"),  the  wife  of  Steven  Berry  ("Berry"),  the former
     President  and  Chief  Executive Officer of the Company. In the Tia Action,


                                      -8-
<PAGE>
     the  Company  claims Cdn$42,516 from Tia Berry on account of monies paid to
     her  by  the  Company  which she was not entitled to receive. Tia Berry has
     filed  a  Statement  of Defense in the Tia Action in which she alleges that
     the  payments which she received from the Company were to reimburse her for
     business  expenses  which  she had charged to her credit cards on behalf of
     Berry.  The  Tia  Action  has  not  yet  been  set  for  trial.

     On  April  4,  2000,  Berry commenced an action in the Supreme Court of the
     State  of New York, County of New York (Index No. 601448/2000), against the
     Company  and  Continental  Stock  Transfer & Trust Company ("Continental"),
     (the  "New York Action"). In the New York Action, Berry claimed damages for
     alleged  conversion, fraud, breach of contract and breach of fiduciary duty
     all arising from the alleged wrongful Stop Transfer Order which the Company
     placed  relating  to 75,000 shares of the Company's Common Stock registered
     in  Berry's name and the Company's cancellation of a further 600,000 shares
     (the  "Contingent  Shares").  The  complaint  in the New York Action claims
     damages in excess of $3,000,000 with the precise amount to be determined at
     trial.

     Berry  received  the 600,000 Contingent Shares upon condition that he would
     remain  in the Company's employ as Chief Executive Officer for at least two
     years.  Berry commenced his employment with the Company on January 4, 1999,
     and resigned his employment with the Company on January 17, 2000. Following
     Berry's  resignation,  the  Company attempted to have a Stop Transfer Order
     issued  with  respect  to  the 75,000 shares registered in Berry's name and
     cancel  the  600,000  Contingent  Shares.  The  Stop Transfer Order was not
     effective  and  Berry  subsequently  sold  the  75,000  shares.

     On  May 19, 2000 CyPost and ePost Innovations commenced suit in the Supreme
     Court  of  British  Columbia,  Action #S002798, Vancouver Registry, against
     Berry  and  his  wife,  Tia  Berry (the "BC Action"). In the BC Action, the
     Company  seeks  an  order  directing Berry to return the 600,000 Contingent
     Shares to the Company for cancellation or an order entitling the Company to
     cancel  the  same  on  the  basis that Berry did not fulfill the employment
     conditions  which  were  the  condition  precedent  to  his  becoming  the
     beneficial  owner  of  the  Contingent  Shares.

     In  the  BC Action, the Company also claims at least Cdn$800,000 from Berry
     on  account  of  breach  of fiduciary duty, negligence, breach of statutory
     duties  and  breach  of  contract  arising from Berry's failure to properly
     carry  out  his  employment responsibilities. In the BC Action, the Company
     also claims Cdn$34,013 from Berry and Tia Berry on account of conspiracy to
     defraud  and  injure  the  Company and ePost Innovations by causing certain
     personal  expenses  to  be paid by the Company rather than by Berry and Tia
     Berry  personally.  The  Company also claims punitive and exemplary damages
     from  Berry  and  Tia  Berry  in  the  BC  Action.

     On  May  25,  2000,  the  Company moved in the New York Action for an order
     dismissing  the  action against the Company for lack of jurisdiction or, in
     the  alternative,  on  the  basis  of forum non conveniens. On September 5,
     2000,  the  court  dismissed  the  New  York Action on forum non conveniens
     grounds, subject to the Company making certain stipulations in the New York
     Action.  Those stipulations have been made and the appeal period in the New
     York  Action  has  expired  without  Berry or any other party appealing the
     September  5,  2000  order.

     The  issues  raised by Berry and the Company in the New York Action will be
     litigated  in  the BC Action together with the further issues raised by the
     Company  in the BC Action. The Company feels that Berry's claims in the New
     York  Action  were without merit and that the Company will be successful in
     obtaining  an  order  declaring  that  Berry's 600,000 Contingent Shares be
     cancelled  and  further  entitling  the Company to substantial damages. The
     Company  will  vigorously  pursue  its  position  in  all  respects.


                                      -9-
<PAGE>
     On  December  21,  2000,  Berry and Tia Berry commenced suit in the Supreme
     Court  of  British  Columbia,  Action #S006790, Vancouver Registry, against
     CyPost,  ePost  Innovations,  Kelly Shane Montalban, J. Thomas W. Johnston,
     Carl  Whitehead  and  Robert  Sendoh  (the  "Berry  Action"). Statements of
     Defense  have been filed on behalf of the Company and the other defendants.

     The  Plaintiffs  in  the  Berry  Action  allege that the Tia Action, the BC
     Action,  and  the action by Kelly Shane Montalban (Supreme Court of British
     Columbia,  Action #S002147, Vancouver Registry), against Berry for specific
     performance  of an option agreement (the "Montalban Action"), collectively,
     amount to an abuse of process, malicious prosecution, unlawful interference
     with the Plaintiffs' economic rights, or were commenced pursuant to a civil
     conspiracy  to  injure  the  Plaintiffs.

     In  the  Berry  Action,  the  Plaintiffs  seek  a declaration that Berry is
     entitled  to  the  600,000  Contingent Shares and claim unspecified damages
     which  are estimated at Cdn$2,000,000 based on the Statement of Claim. They
     also  claim  punitive or aggravated damages and costs. The Company believes
     that the allegations in the Berry Action are without merit and they will be
     vigorously  defended.

     It is expected that the Tia Action, the BC Action and the Berry Action will
     be  consolidated  for  the purposes of trial due to the fact that there are
     numerous  issues  of fact and law which are common to all of these actions.
     The Company believes that trial will likely take place in the fall of 2002.

     A  loss  by  the Company of the claim against it for monetary damages would
     have  a  material  adverse  effect  on  the  Company's  future  results  of
     operations,  financial  condition  and liquidity; however, the Company does
     not  expect  to lose this action and believes additionally that it would be
     able  to  negotiate  reasonable  payment  terms  should  it lose this suit.

   SHANE  MONTALBAN  LITIGATION

     On  June  15,  2001 the Company filed a Summons and Complaint against Kelly
     Shane  Montalban  in  the  United  States  District  Court for the Southern
     District  of  New  York (CyPost Corp. v. Kelly Shane Montalban, Civ. 5447).
     The  Complaint  alleged that, between September 1999 and June 15, 2001 (the
     "Recovery  Period"),  numerous  purchases and sales of the Company's common
     stock  were made in violation of the short swing profit recovery provisions
     of  Section  16(b)  of  the  Securities  Exchange  Act of 1934, as amended.
     ("Section  16(b)").

     Section  16(b)  imposes  strict  liability on corporate insiders, including
     principal  stockholders,  for engaging in short swing trading activities (a
     sale  and  purchase or purchase and sale occurring within any six (6) month
     period)  without  regard  as  to  whether true profits were realized by the
     insider  from such trading activities. During the Recovery Period, numerous
     purchases and sales of the Company's common stock were made in violation of
     Section  16(b).  Although  the  Company  did  not  believe that any of such
     purchases  and  sales  were  based  on  non-public information, the Company


                                      -10-
<PAGE>
     nonetheless required by the strict liability provisions of Section 16(b) to
     seek  recovery.  The Company ultimately determined that the amount of short
     swing  profits  realized  within  the  Recovery  Period was $2,498,449 (the
     "Recovery  Amount").  Mr.  Montalban  cooperated  fully  with the Company's
     investigation  and  agreed  to make payment in full of the Recovery Amount.
     Pursuant  thereto,  on  September  20,  2001  the  Company  entered  into a
     Settlement Agreement. Part of the Recovery Amount was paid by Mr. Montalban
     by  way  of  his delivery to the Company for cancellation, on September 20,
     2001,  various promissory notes of the Company on which the Company owed an
     aggregate  of $2,344,788 in principal and $44,450 in interest or a total of
     $2,389,238.

     The  notes  delivered  for  cancellation  included  a  note  which had been
     assigned  to  Mr.  Montalban  by the holder to satisfy an obligation of the
     holder  to  Mr.  Montalban, notes which had been purchased by Mr. Montalban
     from  various  individuals,  and  a  note  held  by  Pacific  Gate  Capital
     Corporation,  a  corporation  owned  by  Mr.  Montalban. The balance of the
     Recovery  Amount  was  paid  by the issuance to the Company of his five (5)
     year, 5% promissory note, dated September 20, 2001, in the principal amount
     of  $109,211. In consideration of the execution of the Settlement Agreement
     and  payment  of  the  Recovery  Amount,  on  October  9,  2001 the Company
     voluntarily  dismissed  its  action.

   WORLDCOM  DISPUTE

     On  June 30, 1999 Netrover Inc ("Netrover") entered into a Virtual Internet
     Provider  Agreement  with WorldCom Canada Ltd ("WorldCom"). A dispute arose
     between  the  parties  regarding  certain  credits  claimed by Netrover and
     amounts  claimed  as  owed  by  Netrover  to  WorldCom  in  the  amount  of
     Cdn$633,368.

     The  Netrover  and WorldCom are presently engaged in settlement discussions
     to  resolve  the  dispute.  No  assurance  can  be given, however, that the
     parties  will  reach  a  settlement.  A  loss  by  the Company would have a
     material  adverse  effect  on  the  Company's future results of operations.

     On  November  8,  2001  Netrover  entered  into  a  Settlement  Agreement
     ("Settlement")  with  WorldCom.  The parties have agreed to a settlement of
     Cdn$91,000  to  be  paid  in  three  installments.

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

     The  following  discussion  and  analysis  is  provided  to  increase  the
     understanding  of,  and  should  be read in conjunction with, the Condensed
     Consolidated Financial Statements of the Company and Notes thereto included
     elsewhere  in  this Report. Historical results and percentage relationships
     among  any  amounts  in  these  financial  statements  are  not necessarily
     indicative  of  trends  in  operating  results  for  any future period. The
     statements  which  are  not  historical  facts  contained  in  this Report,
     including  this Management's Discussion and Analysis of Financial Condition
     and  Results  of  Operations,  and  Notes  to  the  Condensed  Consolidated
     Financial  Statements,  constitute  "forward-looking statements" within the


                                      -11-
<PAGE>
     meaning  of  the  Private  Securities  Litigation  Reform Act of 1995. Such
     statements  are  based  on  currently  available  operating,  financial and
     competitive  information,  and  are  subject  to  various  risks  and
     uncertainties.  Future  events  and the Company's actual results may differ
     materially  from the results reflected in these forward-looking statements.
     Factors that might cause such a difference include, but are not limited to,
     dependence  on  existing  and  future  key strategic and strategic end-user
     customers,  limited  ability  to  establish  new  strategic  relationships,
     ability to sustain and manage growth, variability of operating results, the
     Company's  expansion  and  development  of new service lines, marketing and
     other  business  development  initiatives,  the  commencement  of  new
     engagements,  competition  in  the  industry,  general economic conditions,
     dependence  on  key  personnel,  the  ability  to  attract, hire and retain
     personnel who possess the technical skills and experience necessary to meet
     the  service  requirements  of  its  clients,  the potential liability with
     respect  to  actions  taken  by  its  existing  and  past  employees, risks
     associated  with  international sales, and other risks described herein and
     in  the  Company's  other  SEC  filings.

                                    OVERVIEW

     The  Company  is  engaged  in  the  business  of providing Internet service
     provider  ("ISP")  services ("ISP Services") for business and personal use.
     Previously,  the  Company  was also involved in developing certain software
     products,  which  activities  the  Company  no  longer  pursues.

     The  Company  was  a  development  stage company until the first quarter of
     1999,  when it began to broaden its strategic focus through the acquisition
     of  six  ISPs.  Currently,  providing  ISP  Services  is  the  focus of the
     Company's  business.  The  Company's  business  operations  are  presently
     conducted  in  the  United  States  and  Canada.

     The Company derives virtually all of its revenues from its ISP Services. At
     present,  most  of  the  revenue  from  ISP  Services  can be attributed to
     connectivity,  although  the  Company's  network  of ISP Services is moving
     towards  focusing  on  Web  hosting  and server co-location, anticipating a
     strong  hold  over  connectivity  by  the larger ISPs in a few years' time.

     During  2000,  the  Company  began  streamlining  and consolidating its ISP
     Services  operations  to  enhance efficiency and reduce operating expenses.
     The  Company  has  embarked  on a program to centralize ISP Services to the
     greatest  extent  possible,  as  follows:

     -    Customer  Support.  During  the second half of 2000, the Company began
          -----------------
          consolidating  all  aspects  of  customer  support (including end user
          technical  issues)  into the Chatham, Ontario facility. In early 2001,
          customer  support  for Oregon ISP Services customers were consolidated
          into  the  Chatham  facility  and  by  late-2001  it  is expected that
          customer  support for all of the Company's ISP Services customers will
          be  handled  by  the  Chatham  facility.


                                      -12-
<PAGE>
     -    Billing  and  Collections. During the second half of 2000, the Chatham
          -------------------------
          facility  took  over  billing  and  collections  for  British Columbia
          customers,  in  addition to continuing billing and collections for all
          other  Canadian  customers.  In early 2001 the billing and collections
          for  the  Oregon  ISP  customers  were  consolidated  into the Chatham
          facility,  billing  and  collections  for  the Washington ISP Services
          customers  will  be  consolidated  in  late-2001.

     -    Network  Operations. During 2000, the Company reduced four maintenance
          -------------------
          and  repair  teams  to  two  regionally-based  teams.  A team based in
          Toronto  provides  primary  monitoring  and  repair of all servers and
          routers  covering  all  Canadian  ISP  Services customers and provides
          overflow  assistance  to  the  Pacific Northwest, while a Seattle team
          provides  primary  monitoring  and  repair  of all servers and routers
          covering  all  of  the  Pacific  Northwest  ISP Services customers and
          provides  overflow  assistance  to  Canada.

     The  Company  is also consolidating Web hosting and dedicated services into
     Toronto, a process which began in late-2000 and is expected to be completed
     by  late-2001.  Other  ISP  Services such as e-mail and user authentication
     (i.e.,  customer  security)  will continue to be handled from regional data
     centers.  Beginning  in early 2001, all new Web hosting customers, wherever
     located,  will  be  hosted  from  Toronto.

     The Company is also considering implementing other consolidated services to
     achieve  greater  efficiency  and  cost  savings.

       RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001
              COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2000

     Substantially  all  of  the  Company's  revenue  was  earned  from  its ISP
     operations during the three months ended September 30, 2001. These revenues
     are  attributable virtually entirely to the operations of the Company's ISP
     businesses  (Hermes  Net  Solutions,  Inc., Intouch.Internet Inc., Netrover
     Inc.,  Connect  Northwest  Internet  Services and Internet Arena) which the
     Company  acquired beginning late in the second quarter of 1999. The Company
     generated  net  sales  of $856,644 for the three months ended September 30,
     2001  compared to $1,292,162 for the three months ended September 30, 2000.
     The  decrease  in  the  above  noted  revenue,  for  the three months ended
     September  30,  2001 compared to the three months ended September 30, 2000,
     are  primarily  due  to a decrease in marketing related activities, and the
     softening  of  technology  related  sector  spending.

     Direct  costs,  which  consist  primarily  of telecommunications charges in
     respect  of  providing  Internet  connection  services  to  customers,  of
     $545,458,  were  incurred  for  the  three months ended September 30, 2001,
     compared  to  $620,714  for  the three months ended September 30, 2000. The
     decrease  in  the above noted expenses for the three months ended September
     30,  2001  compared  to  the  three months ended September 30, 2000 results
     primarily  reflect the renegotiation of several telecommunication contracts
     to  the  Company's  benefit.


                                      -13-
<PAGE>
     Selling,  general  and  administrative expenses were $492,164 for the three
     months  ended  September 30, 2001 compared to $683,271 for the three months
     ended  September 30, 2000. The decrease in the above noted expenses for the
     three  months  ended  September 30, 2001 compared to the three months ended
     September  30,  2000 results primarily from a further reduction in salaries
     and  benefits,  consolidation  of  the  operation  of  the  Company's  ISP
     businesses  and  a  decrease  in  marketing  related  activities.

     The  Company  had accrued interest expenses of $37,348 for the three months
     ended  September  30,  2001, compared to $41,210 for the three months ended
     September  30, 2000. The interest expense is in respect of promissory notes
     issued by the Company to Blue Heron Venture Fund Ltd., the Company's former
     principal  creditor  ("Blue Heron") and following assignment of such notes,
     on  June  18, 2001, is in respect of promissory notes issued by the Company
     to  the  shareholders  of  Blue  Heron  and  Blue Heron's fund manager. See
     "Liquidity  and  Capital  Resources"  below.

     The  Company had a net gain of $1,763,151, or $.08 per share, for the three
     months  ended  September  30,  2001, compared to a net loss of $805,086, or
     $.04 per share, for the three months ended September 30, 2000. The increase
     in  net  gain for the three months ended September 30, 2001 was primarily a
     result  of  the  increase in other revenue due to a recovery of short swing
     profits from a principal shareholder as well as a decrease in direct costs;
     selling, general and administrative expenses; amortization and depreciation
     of  the  assets  acquired  in  the  fiscal year 1999; and interest expense.

       RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
              COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2000

     Substantially  all  of  the  Company's  revenue  was  earned  from  its ISP
     operations  during the nine months ended September 30, 2001. These revenues
     are  attributable virtually entirely to the operations of the Company's ISP
     businesses  (Hermes  Net  Solutions,  Inc., Intouch.Internet Inc., Netrover
     Inc.,  Connect  Northwest  Internet  Services and Internet Arena) which the
     Company  acquired beginning late in the second quarter of 1999. The Company
     generated  net  sales of $2,875,843 for the nine months ended September 30,
     2001  compared  to $3,686,467 for the nine months ended September 30, 2000.
     The  decrease  in  the  above  noted  revenue,  for  the  nine months ended
     September  30, 2001 compared to the nine months ended September 30, 2000, a
     decrease  in  marketing  related  activities,  the  softening of technology
     related  sector spending and the discontinuance of Playa Corporation during
     the  fourth  quarter  of  2000.

     Direct  costs,  which  consist  primarily  of telecommunications charges in
     respect  of  providing  Internet  connection  services  to  customers,  of
     $1,458,487,  were  incurred  for  the nine months ended September 30, 2001,
     compared  to  $1,917,641  for the nine months ended September 30, 2000. The
     decrease  in  the  above noted expenses for the nine months ended September
     30,  2001  compared  to  the nine months ended September 30, 2000 primarily
     reflect  the  renegotiation  of  several telecommunication contracts to the
     Company's  benefit.


                                      -14-
<PAGE>
     Selling,  general  and administrative expenses were $1,838,163 for the nine
     months  ended September 30, 2001 compared to $3,094,888 for the nine months
     ended  September 30, 2000. The decrease in the above noted expenses for the
     nine  months  ended  September  30,  2001 compared to the nine months ended
     September  30,  2000  results  primarily  from  a reduction in salaries and
     benefits,  consolidation  of  the operation of the Company's ISP businesses
     and  a  decrease  in  marketing  related  activities.

     The  Company  had accrued interest expenses of $120,291 for the nine months
     ended  September  30,  2001, compared to $117,161 for the nine months ended
     September  30, 2000. The interest expense is in respect of promissory notes
     issued by the Company to Blue Heron Venture Fund Ltd., the Company's former
     principal  creditor  ("Blue Heron") and following assignment of such notes,
     on  June  18, 2001, is in respect of promissory notes issued by the Company
     to  the  shareholders  of  Blue  Heron  and  Blue Heron's fund manager. See
     "Liquidity  and  Capital  Resources"  below.

     The  Company  had  a  net gain of $372,914, or $.02 per share, for the nine
     months  ended  September 30, 2001, compared to a net loss of $5,391,667, or
     $.26  per share, for the nine months ended September 30, 2000. The increase
     in  net  gain  for the nine months ended September 30, 2001 was primarily a
     result  of  the  increase in other revenue due to a recovery of short swing
     profits from a principal shareholder as well as a decrease in direct costs;
     selling, general and administrative expenses; amortization and depreciation
     of  the  assets  acquired  in  the  fiscal year 1999; and interest expense.

                         LIQUIDITY AND CAPITAL RESOURCES

     The accompanying financial statements have been prepared on a going concern
     basis,  which  assumes  that  the Company will continue in operation for at
     least  one  year  and  will be able to realize its assets and discharge its
     liabilities  in  the  normal course of business. The Company had a net gain
     for the nine months ended September 30, 2001 of $372,914, compared to a net
     loss  for  the  nine  months  ended  September  30,  2000 of $5,391,667. At
     September  30,  2001,  the  Company  had  a  working  capital  deficit  of
     approximately $1.2 million, which is primarily due to the Company's general
     operating activities and professional fees. These factors indicate that the
     Company's  continuation as a going concern is dependent upon its ability to
     obtain  adequate  financing.

     The  Company  has  obtained  most  of its financing through Blue Heron. The
     loans were made under agreements pursuant to which the Company could borrow
     up  to  $16,000,000  in unsecured loans from Blue Heron. Effective June 18,
     2001  Blue  Heron  has  withdrawn  this  credit  facility.  The  loans were
     evidenced by the Company's Convertible Demand Notes (the "Blue Heron Demand
     Notes").  The  Blue  Heron Demand Notes bore interest at 8% per annum, were
     payable  on demand and were convertible into shares of the Company's Common
     Stock  at  the  lender's option, in which case Blue Heron would have waived
     its  right  to  be paid interest under the Blue Heron Demand Notes. On June
     18,  2001  the  Blue  Heron  Demand  Notes  were cancelled and subsequently
     replaced  by  the  Blue Heron Shareholder Notes. During 1999, $4,000,000 of
     outstanding  loans  were  converted  into 4,500,000 shares of the Company's


                                      -15-
<PAGE>
     Common  Stock. On August 16, 1999, $1,000,000 aggregate principal amount of
     Blue  Heron  Demand  Notes  were  converted into 1,500,000 shares of Common
     Stock,  at  a conversion price of $0.67 per share. On November 24, 1999, an
     aggregate  additional  principal  amount of $3,000,000 of Blue Heron Demand
     Notes  were  converted into an additional 3,000,000 shares of Common Stock,
     at  a  conversion  price  of  $1.00  per  share.

     During  the  fiscal  year  ended December 31, 2000, the Company borrowed an
     additional  $1,210,000  from  Blue  Heron,  resulting  in  an  aggregate
     outstanding  principal amount of the loans of $2,085,000 as of December 31,
     2000.  The  Company  did  not  borrow  any additional funds during the nine
     months  ended  September  30,  2001.

     During  the  fiscal  year  ended December 31, 2000, the Company borrowed an
     aggregate  of  $125,000  from  Pacific  Gate  Capital Corporation ("Pacific
     Gate"),  a  corporation  owned  by  Kelly  Shane  Montalban,  a  principal
     shareholder  of  the  Company,  of  which amount $25,000 was outstanding on
     September  20,  2001,  at  which  time pursuant to the Montalban Settlement
     Agreement  the  loan  balance  was  deemed  to  have  been  paid  in  full.

     On  September 20, 2001 the Company entered into a Settlement Agreement with
     Shane  Montalban, a principal shareholder of the Company, with respect to a
     lawsuit  instituted  against  him  seeking  recovery of short swing profits
     realized  by  Mr. Montalban between September 20, 1999 and June 15, 2001 in
     violation  of  Section  16(b)  of  the  Securities Exchange Act of 1934, as
     amended.  Pursuant  to  the  Settlement  Agreement,  Mr. Montalban paid the
     Company  an  aggregate of approximately $2,498,449 (the "Recovery Amount"),
     which  amount  represented  recovery in full of Mr. Montalban's short swing
     profits.  Part  of the Recovery Amount was paid by Mr. Montalban's delivery
     to  the Company for cancellation, on September 20, 2001, various promissory
     notes  of  the Company on which the Company owed an aggregate of $2,344,788
     in  principal  and  $44,450 in interest or a total of $2,389,238. The notes
     delivered  for  cancellation included a note which had been assigned to Mr.
     Montalban by the holder to satisfy an obligation of the holder, notes which
     had  been  purchased  by Mr. Montalban from various individuals, and a note
     held  by  Pacific  Gate  Capital  Corporation,  a  corporation owned by Mr.
     Montalban.  See  "Part  II  - Other Information, Item 1. Legal Proceedings"
     below.

     The Company's cash position at September 30, 2001 was $155,003, compared to
     $250,631  on  December  31,  2000.  This  decrease  is primarily due to the
     Company  not  borrowing  additional  funds  during  the  nine  months ended
     September  30,  2001.

     The  Company's net cash used in operating activities totaled $18,407 during
     the nine months ended September 30, 2001, compared to $1,058,872 during the
     nine months ended September 30, 2000. This decrease is primarily due to the
     settlement  income  for  the  nine  months  ended  September  30,  2001.

     The  Company's net cash used in investing activities totaled $77,221 during
     the  nine  months ended September 30, 2001, compared to $499,821 during the
     nine months ended September 30, 2000. This decrease is primarily due to the
     Company  not  being  as  aggressive  as  previous  years  in  acquisitions.


                                      -16-
<PAGE>
     The  Company did not have any proceeds from financing activities during the
     nine  months  ended  September  30,  2001,  compared  to $1,278,589 of such
     proceeds  during  the  nine  months  ended  September  30,  2000.

     PART  II  -  OTHER  INFORMATION

ITEM  1.     LEGAL  PROCEEDINGS

   Canada  Post  Litigation

     On June 11, 1999, Canada Post Corporation ("Canada Post") filed a Statement
     of Claim in the Federal Court of Canada (Court File No. T-1022-99) in which
     it  sought  injunctive  and  unspecified  monetary relief for the allegedly
     "improper"  use  by  the  Company's  subsidiary,  ePost  Innovations, Inc.,
     ("ePost  Innovations"),  of  certain  marks  and  names  which  contain the
     component  "post". On October 18, 1999, ePost Innovations filed its Defense
     and  Counterclaim.  In  a  motion  heard  November  24,  1999,  Canada Post
     Corporation  challenged  certain  parts of the Counterclaim and the Federal
     Court  reserved  judgment.

     On  May  25,  1999,  ePost  Innovations  filed  a statement of Claim in the
     British  Columbia Court (Court File No. C992649) seeking a declaration that
     the  public  notice  of  Canada  Post's  adoption and use of CYBERPOSTE and
     CYBERPOST  on  November 18, 1998 and December 9, 1998 respectively, did not
     affect  the Company's use of CyPost and ePost Innovations as trademarks and
     trade-names  prior to said dates. ePost Innovations sought summary judgment
     for  such  a  declaration  and on September 14, 1999, the BC Court rejected
     summary  judgment on the basis that no right of ePost Innovations was being
     infringed  and  that  a  trial  of  the  issues  was  more  appropriate.

     On  June  20,  2001  ePost Innovations, Canada Post and the Company entered
     into  a  Settlement and Release Agreement effective as of May 30, 2001 (the
     "Settlement  Agreement"). Pursuant to the Settlement Agreement, the parties
     executed  mutual  releases  and  discontinued  their respective claims. The
     release by Canada Post to ePost Innovations was made subject to the Company
     and ePost Innovations ceasing all use of the trade name EPOST within Canada
     within  90  days  of  the  effective  date  of the Settlement Agreement and
     transferring  all  right,  title  and interest they had with respect to the
     trade  name  and  trademark  EPOST and any goodwill associated therewith to
     Canada  Post upon execution of the Settlement Agreement. On August 30, 2001
     the Company changed the name of its subsidiary to NetRoverUSA Online IncAll
     other  terms  of  the  Settlement  Agreement  have  been  complied  with.

   Berry  Litigation

     On  March  31,  2000,  the  Company  commenced suit in the Supreme Court of
     British  Columbia,  Action  #S001822,  Vancouver Registry against Tia Berry
     (the  "Tia  Action"),  the  wife  of  Steven  Berry  ("Berry"),  the former
     President  and  Chief  Executive Officer of the Company. In the Tia Action,


                                      -17-
<PAGE>
     the  Company  claims $42,516 (CDN) from Tia Berry on account of monies paid
     to  her by the Company which she was not entitled to receive. Tia Berry has
     filed  a  Statement  of Defense in the Tia Action in which she alleges that
     the  payments which she received from the Company were to reimburse her for
     business  expenses  which  she had charged to her credit cards on behalf of
     Berry.  The  Tia  Action  has  not  yet  been  set  for  trial.

     On  April  4,  2000,  Berry commenced an action in the Supreme Court of the
     State  of New York, County of New York (Index No. 601448/2000), against the
     Company  and  Continental  Stock  Transfer & Trust Company ("Continental"),
     (the  "New York Action"). In the New York Action, Berry claimed damages for
     alleged  conversion, fraud, breach of contract and breach of fiduciary duty
     all arising from the alleged wrongful Stop Transfer Order which the Company
     placed  relating  to 75,000 shares of the Company's Common Stock registered
     in  Berry's name and the Company's cancellation of a further 600,000 shares
     (the  "Contingent  Shares").  The  complaint  in the New York Action claims
     damages in excess of $3,000,000 with the precise amount to be determined at
     trial.

     Berry  received  the 600,000 Contingent Shares upon condition that he would
     remain  in the Company's employ as Chief Executive Officer for at least two
     years.  Berry commenced his employment with the Company on January 4, 1999,
     and resigned his employment with the Company on January 17, 2000. Following
     Berry's  resignation,  the  Company attempted to have a Stop Transfer Order
     issued  with  respect  to  the 75,000 shares registered in Berry's name and
     cancel  the  600,000  Contingent  Shares.  The  Stop Transfer Order was not
     effective  and  Berry  subsequently  sold  the  75,000  shares.

     On  May 19, 2000 CyPost and ePost Innovations commenced suit in the Supreme
     Court  of  British  Columbia,  Action #S002798, Vancouver Registry, against
     Berry  and  his  wife,  Tia  Berry (the "BC Action"). In the BC Action, the
     Company  seeks  an  order  directing Berry to return the 600,000 Contingent
     Shares to the Company for cancellation or an order entitling the Company to
     cancel  the  same  on  the  basis that Berry did not fulfill the employment
     conditions  which  were  the  condition  precedent  to  his  becoming  the
     beneficial  owner  of  the  Contingent  Shares.

     In  the  BC Action, the Company also claims at least Cdn$800,000 from Berry
     on  account  of  breach  of fiduciary duty, negligence, breach of statutory
     duties  and  breach  of  contract  arising from Berry's failure to properly
     carry  out  his  employment responsibilities. In the BC Action, the Company
     also claims Cdn$34,013 from Berry and Tia Berry on account of conspiracy to
     defraud  and  injure  the  Company and ePost Innovations by causing certain
     personal  expenses  to  be paid by the Company rather than by Berry and Tia
     Berry  personally.  The  Company also claims punitive and exemplary damages
     from  Berry  and  Tia  Berry  in  the  BC  Action.

     On  May  25,  2000,  the  Company moved in the New York Action for an order
     dismissing  the  action against the Company for lack of jurisdiction or, in
     the  alternative,  on  the  basis  of forum non conveniens. On September 5,
     2000,  the  court  dismissed  the  New  York Action on forum non conveniens
     grounds, subject to the Company making certain stipulations in the New York
     Action.  Those stipulations have been made and the appeal period in the New
     York  Action  has  expired  without  Berry or any other party appealing the
     September  5,  2000  order.


                                      -18-
<PAGE>
     The  issues  raised by Berry and the Company in the New York Action will be
     litigated  in  the BC Action together with the further issues raised by the
     Company  in the BC Action. The Company feels that Berry's claims in the New
     York  Action  were without merit and that the Company will be successful in
     obtaining  an  order  declaring  that  Berry's 600,000 Contingent Shares be
     cancelled  and  further  entitling  the Company to substantial damages. The
     Company  will  vigorously  pursue  its  position  in  all  respects.

     On  December  21,  2000,  Berry and Tia Berry commenced suit in the Supreme
     Court  of  British  Columbia,  Action #S006790, Vancouver Registry, against
     CyPost,  ePost  Innovations,  Kelly Shane Montalban, J. Thomas W. Johnston,
     Carl  Whitehead  and  Robert  Sendoh  (the  "Berry  Action"). Statements of
     Defense  have been filed on behalf of the Company and the other defendants.

     The  Plaintiffs  in  the  Berry  Action  allege that the Tia Action, the BC
     Action,  and  the action by Kelly Shane Montalban (Supreme Court of British
     Columbia,  Action #S002147, Vancouver Registry), against Berry for specific
     performance  of an option agreement (the "Montalban Action"), collectively,
     amount to an abuse of process, malicious prosecution, unlawful interference
     with the Plaintiffs' economic rights, or were commenced pursuant to a civil
     conspiracy  to  injure  the  Plaintiffs.

     In  the  Berry  Action,  the  Plaintiffs  seek  a declaration that Berry is
     entitled  to  the  600,000  Contingent Shares and claim unspecified damages
     which  are estimated at Cdn$2,000,000 based on the Statement of Claim. They
     also  claim  punitive or aggravated damages and costs. The Company believes
     that the allegations in the Berry Action are without merit and they will be
     vigorously  defended.

     It is expected that the Tia Action, the BC Action and the Berry Action will
     be  consolidated  for  the purposes of trial due to the fact that there are
     numerous  issues  of fact and law which are common to all of these actions.
     The Company believes that trial will likely take place in the fall of 2002.

     A  loss  by  the Company of the claim against it for monetary damages would
     have  a  material  adverse  effect  on  the  Company's  future  results  of
     operations,  financial  condition  and liquidity; however, the Company does
     not  expect  to lose this action and believes additionally that it would be
     able  to  negotiate  reasonable  payment  terms  should  it lose this suit.

   Shane  Montalban  Litigation

     On  June  15,  2001 the Company filed a Summons and Complaint against Kelly
     Shane  Montalban  in  the  United  States  District  Court for the Southern
     District  of  New  York (CyPost Corp. v. Kelly Shane Montalban, Civ. 5447).
     The  Complaint  alleged that, between September 1999 and June 15, 2001 (the
     "Recovery  Period"),  numerous  purchases and sales of the Company's common
     stock  were made in violation of the short swing profit recovery provisions
     of  Section  16(b)  of  the  Securities  Exchange  Act of 1934, as amended.
     ("Section  16(b)").


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<PAGE>
     Section  16(b)  imposes  strict  liability on corporate insiders, including
     principal  stockholders,  for engaging in short swing trading activities (a
     sale  and  purchase or purchase and sale occurring within any six (6) month
     period)  without  regard  as  to  whether true profits were realized by the
     insider  from such trading activities. During the Recovery Period, numerous
     purchases and sales of the Company's common stock were made in violation of
     Section  16(b).  Although  the  Company  did  not  believe that any of such
     purchases  and  sales  were  based  on  non-public information, the Company
     nonetheless required by the strict liability provisions of Section 16(b) to
     seek  recovery.  The Company ultimately determined that the amount of short
     swing  profits  realized  within  the  Recovery  Period was $2,498,449 (the
     "Recovery  Amount").  Mr.  Montalban  cooperated  fully  with the Company's
     investigation  and  agreed  to make payment in full of the Recovery Amount.
     Pursuant  thereto,  on  September  20,  2001  the  Company  entered  into a
     Settlement  Agreement.  Part  of  the  Recovery Amount was delivered to the
     Company for cancellation on September 20, 2001, various promissory notes of
     the  Company  on  which  the  Company  owed  an  aggregate of $2,344,788 in
     principal  and  $44,450  in  interest  or  a  total  of  $2,389,238.

     The  notes  delivered  for  cancellation  included  a  note  which had been
     assigned  to  Mr.  Montalban  by the holder to satisfy an obligation of the
     holder,  notes  which  had  been  purchased  by  Mr. Montalban from various
     individuals,  and  a  note  held  by  Pacific  Gate  Capital Corporation, a
     corporation  owned by Mr. Montalban. The balance of the Recovery Amount was
     paid by the issuance to the Company of a five (5) year, 5% promissory note,
     dated  September  20,  2001,  in  the  principal  amount  of  $109,211.  In
     consideration  of  the execution of the Settlement Agreement and payment of
     the  Recovery  Amount, on October 9, 2001 the Company voluntarily dismissed
     its  action.

ITEM  5.     OTHER  INFORMATION

     Subsequent  to  the  period  covered  by this Report, effective October 12,
     2001,  Sandra Warren was appointed as a director of the Company. Ms. Warren
     joined the Company in 1998 serving in various administrative and accounting
     capacities  for  the  Company.

     Subsequent  to  the  period  covered  by this Report, effective October 30,
     2001,  Ms.  Warren  was  appointed  as  the Company's president, secretary,
     treasurer  and  principal  financial  officer.


                                      -20-
<PAGE>
ITEM  6.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)     Exhibits

     Exhibit  No.     Description
     ------------     -----------

     4.1  Promissory  Note  dated  September 20, 2001 in the principal amount of
          $109,210.95  issued  by  Shane  Montalban  to  CyPost  Corporation.

     10.1 Settlement  Agreement  dated  as  of  September  20, 2001 by and among
          CyPost  Corporation,  Kelly  Shane Montalban, and Pacific Gate Capital
          Corporation.

     (b)     Reports  on  Form  8-K

             None.


                                    SIGNATURE

     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.


                                         CYPOST  CORPORATION



DATE:  November  14,  2001               By:   /s/  Sandra  Warren
                                             ----------------------------------
                                               Sandra  Warren
                                               President  and  Treasurer
                                               (Principal  Financial  Officer)


                                      -21-
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