CYPOST CORP
10-Q/A, 2000-07-24
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                   U.S.  SECURITIES  AND  EXCHANGE  COMMISSION
                             Washington,  D.C.  20549


                                 Amendment No. Four
                                       to
                                 FORM  10-QSB/4A


(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,  1999

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

            For the transition period from _______________ to __________________

            Commission file number:   26751

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

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


1281  West  Georgia  Street,  Suite  900, Vancouver, BC Canada  V6E 3J7
--------------------------------------------------------------------------------
                    (Address  of  principal  executive  offices)

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

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 |_| No|X|

                      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  practical  date:                20,246,512


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

                         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.  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 for the period from the Company's
inception  through  December  31,  1998  which  are  included  in the  Company's
registration  statement  on  Form  10-SB  previously  filed with the Commission.


<PAGE>
CYPOST CORPORATION
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

                                 (U.S. Dollars)

                                     ASSETS

<TABLE>
<CAPTION>
<S>                                                                       <C>
CURRENT ASSETS
  Cash. . . . . . . . . . . . . . . . . . . . . . . . . .                $ 2,414,094
  Accounts receivable . . . . . . . . . . . . . . . . . .                    121,019
  Prepaid expenses. . . . . . . . . . . . . . . . . . . .                     49,144
                                                                         ------------
                                                                           2,584,257
PROPERTY AND EQUIPMENT, net . . . . . . . . . . . . . . .                    148,156
GOODWILL AND OTHER INTANGIBLES. . . . . . . . . . . . . .                    751,208
OTHER ASSETS. . . . . . . . . . . . . . . . . . . . . . .                     97,204
SOFTWARE DEVELOPMENT, NET AMORTIZATION OF $14,140 . . . .                    127,870
                                                                         ------------
                                                                         $ 3,708,695
                                                                         ============
</TABLE>

                       LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S>                                                                       <C>
CURRENT LIABILITIES
  Accounts payable and accrued liabilities. . . . . . . .                $   351,106
  Loans . . . . . . . . . . . . . . . . . . . . . . . . .                  2,650,000
  Deferred revenue. . . . . . . . . . . . . . . . . . . .                     75,283
                                                                         ------------
                                                                           3,076,389
</TABLE>

<TABLE>
<CAPTION>
<S>                                                        <C>
SHAREHOLDERS' EQUITY
  Share capital
    Authorized
      5,000,000 preferred stock with a par value of $.001
      30,000,000 common stock with a par value of $.001
    Issued and outstanding
      Nil preferred stock
      16,859,355 common stock . . . . . . . . . . . . . .  $    16,859
  Paid in capital . . . . . . . . . . . . . . . . . . . .    4,113,346
  Deficit . . . . . . . . . . . . . . . . . . . . . . . .   (3,517,399)
  Cumulative translation adjustment . . . . . . . . . . .       19,500       632,306
                                                           ------------       -------
                                                                         $ 3,708,695
                                                                         ============
</TABLE>



The  accompanying  notes  are  an  integral  part of this consolidated financial
statement.


<PAGE>
                              CYPOST CORPORATION
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
  FOR THE THREE MONTHS ENDED AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (UNAUDITED)

                                 (U.S. Dollars)


<TABLE>
<CAPTION>
                                                          Three Months Ended          Nine Months Ended
                                                            September 30,               September 30,
                                                         --------------------         -------------------

                                                      1999                 1998          1999         1998
                                       --------------------  -------------------  ------------  -----------
<S>                                    <C>                  <C>                   <C>         <C>
REVENUE . . . . . . . . . . . . . . .  $           185,670   $                -   $   197,068   $        -
DIRECT COSTS. . . . . . . . . . . . .               49,275                    -        49,275            -
                                       --------------------  -------------------  ------------  -----------
                                                   136,395                    -       147,793            -
                                       --------------------  -------------------  ------------  -----------
EXPENSES
  Selling, general and administrative              432,521               34,840     1,167,442      153,004
    Amortization and depreciation . . .               24,874                    -        33,211      2,852
                                       --------------------  -------------------  ------------  -----------
                                                   457,395               34,840     1,200,653      155,856
                                       --------------------  -------------------  ------------  -----------
Loss before Interest Expense. . . . .             (321,000)             (34,840)   (1,052,860)    (155,856)
INTEREST EXPENSE. . . . . . . . . . .            1,378,000                    -     1,908,000            -
                                       --------------------  -------------------  ------------  -----------
NET LOSS. . . . . . . . . . . . . . .           (1,699,000)             (34,840)   (2,960,860)    (155,856)
DEFICIT, beginning of period. . . . .           (1,818,399)            (137,894)     (556,539)     (16,878)
                                       --------------------  -------------------  ------------  -----------
DEFICIT, end of period. . . . . . . .  $        (3,517,399)  $         (172,734)  $(3,517,399)  $ (172,734)
                                       ====================  ===================  ============  ===========

LOSS PER SHARE, basic and diluted . .  $             (0.11)  $            (0.01)  $     (0.20)  $    (0.03)
                                       ====================  ===================  ============  ===========
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING . . . . .           16,105,177            7,262,217    14,953,226    5,954,324
                                       ====================  ===================  ============  ===========
</TABLE>


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


<PAGE>
                                    CYPOST CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE THREE MONTHS ENDED AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                        (UNAUDITED)

                                      (U.S. Dollars)


<TABLE>
<CAPTION>
                                                             Three Months Ended             Nine Months Ended
                                                                September 30,                 September 30,
                                                           --------------------            ------------------

                                                          1999                   1998        1999        1998
                                              --------------------  -------------------  ------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                           <C>                  <C>                   <C>         <C>
  Net loss . . . . . . . . . . . . . . . . .  $        (1,699,000)  $          (34,840)  $(2,960,860)  $(155,856)
  Add items not affecting cash
    Amortization . . . . . . . . . . . . . .               24,874                    -        33,211      2,852
    Interest expense . . . . . . . . . . . .            1,378,000                    -     1,908,000           -
  Change in non-cash operating accounts. . .              (68,978)               2,298        89,450         387
                                              --------------------  -------------------  ------------  ----------
NET CASH USED IN OPERATING ACTIVITIES. . . .             (365,104)             (32,542)   (  930,199)   (152,617)
                                              --------------------  -------------------  ------------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds (purchase) of capital assets. . .              (34,169)                 644       (55,194)    (18,360)
  Acquisition of Hermes Net Solutions, Inc..                    -                    -      (445,112)          -
  Acquisition of InTouch.Internet Inc. . . .                    -                    -      (197,917)          -
  Purchase of other assets . . . . . . . . .              (69,477)                   -       (54,220)          -
  Software development                                   (114,339)                   -      (142,010)          -
                                              --------------------  -------------------  ------------  ----------
NET CASH PROVIDED FROM (USED IN)
  INVESTING ACTIVITIES . . . . . . . . . . .             (217,985)                 644      (894,453)    (18,360)
                                              --------------------  -------------------  ------------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Loan repayment . . . . . . . . . . . . . .              (66,841)                   -             -           -
  Loan proceeds. . . . . . . . . . . . . . .            2,750,000                    -     3,650,000           -
  Issuance of shares . . . . . . . . . . . .                    -               44,000       556,000     185,000
                                              --------------------  -------------------  ------------  ----------
NET CASH PROVIDED FROM FINANCING
  ACTIVITIES . . . . . . . . . . . . . . . .            2,683,154               44,000     4,206,000     185,000
  Exchange rate changes on cash in
    foreign currency . . . . . . . . . . . .              (14,466)              (2,162)      (14,466)     (2,847)

                                              --------------------  -------------------  ------------  ----------
NET INCREASE IN CASH . . . . . . . . . . . .            2,085,604                9,940     2,366,882      11,176
CASH, beginning of period. . . . . . . . . .              328,490                5,103        47,212       3,867
                                              --------------------  -------------------  ------------  ----------
CASH, end of period. . . . . . . . . . . . .  $         2,414,094   $           15,043   $ 2,414,094   $  15,043
                                              ====================  ===================  ============  ==========
</TABLE>



SUPPLEMENTAL DISCLOSURE

For the nine months ended September 30, 1999, the Company settled $1,000,000 of
loans by issuing 1.500,000 shares of common stock.

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


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


<TABLE>
<CAPTION>
                                                                                         Additional                  Currency
                                                                       Common  Stock       Paid-in                   Translation
                                                                     ------------------
                                                                      Number    Amount     Capital      Deficit      Adjustment
                                                                     ----------  -------  -----------  ------------  ------------


INCORPORATION DATE, SEPTEMBER 5, 1997
<S>                                                                <C>          <C>      <C>          <C>          <C>
  Issued for acquisition of ePost Innovations, Inc. . . . . . . . .   3,000,000  $ 3,000  $   (1,000)  $         -   $         -
  Issued on sale of units . . . . . . . . . . . . . . . . . . . . .     600,000      600      19,400             -             -
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .           -        -           -       (16,878)            -
                                                                     ----------  -------  -----------  ------------  ------------
BALANCE, DECEMBER 31, 1997. . . . . . . . . . . . . . . . . . . . .   3,600,000    3,600      18,400       (16,878)            -
  Issued on sale of units . . . . . . . . . . . . . . . . . . . . .   2,400,000    2,400      77,600             -             -
  Issued for cash . . . . . . . . . . . . . . . . . . . . . . . . .      57,000       57      18,943             -             -
  Issued for legal services . . . . . . . . . . . . . . . . . . . .      22,500       22       7,478             -             -
  Issued for acquisition of Communication Exchange Management, Inc.   6,270,000    6,270      (2,090)            -             -
  Issued for exercise of warrants . . . . . . . . . . . . . . . . .     915,000      915     243,085             -             -
  Offering expenses . . . . . . . . . . . . . . . . . . . . . . . .           -        -     (20,000)            -             -
  Share transfer for services . . . . . . . . . . . . . . . . . . .           -        -     281,000             -             -
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .           -        -           -      (539,661)            -
  Currency translation adjustment . . . . . . . . . . . . . . . . .           -        -           -             -        33,966
                                                                     ----------  -------  -----------  ------------  ------------
BALANCE, DECEMBER 31, 1998. . . . . . . . . . . . . . . . . . . . .  13,264,500   13,264     624,416      (556,539)       33,966
  Issued for acquisition of InTouch.Internet Inc. . . . . . . . . .       9,855       10      28,515             -             -
  Issued for loan conversion. . . . . . . . . . . . . . . . . . . .   1,500,000    1,500     998,500             -             -
  Issued for exercise of warrants . . . . . . . . . . . . . . . . .   2,085,000    2,085     553,915             -             -
  Beneficial conversion feature on loans. . . . . . . . . . . . . .           -        -   1,908,000             -             -
  Currency   translation adjustment . . . . . . . . . . . . . . . .           -        -           -             -       (14,466)
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .           -        -           -    (3,088,730)            -
                                                                     ----------  -------  -----------  ------------  ------------
BALANCE, SEPTEMBER 30, 1999 . . . . . . . . . . . . . . . . . . . .  16,859,355  $16,859  $4,113,346   $(3,517,399)  $    19,500
                                                                     ==========  =======  ===========  ============  ============

                                                                        Total
                                                                     ------------


INCORPORATION DATE, SEPTEMBER 5, 1997
  Issued for acquisition of ePost Innovations, Inc. . . . . . . . .  $     2,000
  Issued on sale of units . . . . . . . . . . . . . . . . . . . . .       20,000
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (16,878)
                                                                     ------------
BALANCE, DECEMBER 31, 1997. . . . . . . . . . . . . . . . . . . . .        5,122
  Issued on sale of units . . . . . . . . . . . . . . . . . . . . .       80,000
  Issued for cash . . . . . . . . . . . . . . . . . . . . . . . . .       19,000
  Issued for legal services . . . . . . . . . . . . . . . . . . . .        7,500
  Issued for acquisition of Communication Exchange Management, Inc.        4,180
  Issued for exercise of warrants . . . . . . . . . . . . . . . . .      244,000
  Offering expenses . . . . . . . . . . . . . . . . . . . . . . . .      (20,000)
  Share transfer for services . . . . . . . . . . . . . . . . . . .      281,000
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (539,661)
  Currency translation adjustment . . . . . . . . . . . . . . . . .       33,966
                                                                     ------------
BALANCE, DECEMBER 31, 1998. . . . . . . . . . . . . . . . . . . . .      115,107
  Issued for acquisition of InTouch.Internet Inc. . . . . . . . . .       28,525
  Issued for loan conversion. . . . . . . . . . . . . . . . . . . .    1,000,000
  Issued for exercise of warrants . . . . . . . . . . . . . . . . .      556,000
  Beneficial conversion feature on loans. . . . . . . . . . . . . .    1,908,000
  Currency   translation adjustment . . . . . . . . . . . . . . . .      (14,466)
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (3,088,730)
                                                                     ------------
BALANCE, SEPTEMBER 30, 1999 . . . . . . . . . . . . . . . . . . . .  $   632,306
                                                                     ============
</TABLE>



<PAGE>
                              CYPOST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (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 before
interest  expense  of  approximately  $1.5 million for the period from inception
September  5,  1997  to  September 30, 1999, has a working capital deficiency at
September   30,1999,   and   requires  additional  financing  for  its  business
operations.  As  of  September 30, 1999, the Company has $2.3 million of funding
available  which can be drawn against a promissory note agreement with a lender.

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

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

     INTERIM  FINANCIAL  STATEMENTS

These  financial  statements  do not include certain information and disclosures
normally  included in financial statements prepared in accordance with generally
accepted accounting principles.  These interim financial statements are prepared
pursuant  to  regulations  of  the  Securities  and  Exchange  Commission.

In the opinion of management, these financial statements include all adjustments
which  are  necessary  for  fair  presentation.

     CONSOLIDATION

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


<PAGE>
                               CYPOST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

                                 (U.S. Dollars)

1.   BASIS  OF  PRESENTATION  AND  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     FOREIGN  CURRENCY  TRANSLATION

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

     USE  OF  ESTIMATES

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

     FINANCIAL  INSTRUMENTS

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

     PROPERTY  AND  EQUIPMENT

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

     EARNINGS  (LOSS)  PER  SHARE

     Earnings  (loss)  per  share has been computed in accordance with SFAS 128.
Basic  earnings  (loss)  per  share  is  computed  by dividing net income (loss)
attributable  to  common  shareholders  by the weighted average number of common
shares  outstanding  during the respective periods.  Diluted earnings (loss) per
share  is  computed  similarly,  but  also  gives  effect  to  the  impact  that
convertible  securities,  such  as  warrants,  if  dilutive,  would  have on net
earnings  (loss)  and  average  common  shares  outstanding  if converted at the
beginning  of the year.  The effects of potential common shares such as warrants
would  be  antidilutive  in  each  of  the  periods presented in these financial
statements.  At  September  30,  1999,  there are no warrants outstanding (1998-
2,550,000).


<PAGE>
                              CYPOST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

                                 (U.S. Dollars)

1.   BASIS  OF  PRESENTATION  AND  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     REVENUE  RECOGNITION  AND  DEFERRED  REVENUE

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

     DIRECT  COSTS

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

     SELLING  AND  MARKETING  COSTS

     Selling  and  marketing costs are expensed as incurred and totaled $261,093
for  the  nine  months ended September 30, 1999.  These costs are reported under
selling,  general  and  administrative  expenses on the statement of operations.

     SOFTWARE  DEVELOPMENT  COSTS

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

As  at  September  30,  1999,  the  company  capitalized  $142,000  of  software
development  costs  and  amortized  $14,140  of  these  costs.

     GOODWILL  AND  OTHER  INTANGIBLE  ASSETS

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

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


<PAGE>
                              CYPOST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

                                 (U.S. Dollars)

1.   BASIS  OF  PRESENTATION  AND  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     INCOME  TAXES

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

     ACCOUNTING  FOR  DERIVATIVE  INSTRUMENTS  AND  HEDGING  ACTIVITIES

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

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

     STOCK-BASED  COMPENSATION

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

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

     PENSIONS  AND  OTHER  POSTRETIREMENT  BENEFITS

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

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


<PAGE>
                               CYPOST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

                                 (U.S. Dollars)

1.   BASIS  OF  PRESENTATION  AND  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     RECENT  ACCOUNTING  PRONOUNCEMENTS

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


2.     ACQUISITIONS

On  June  30, 1999, the Company acquired all the shares of Hermes Net Solutions,
Inc.  for a total cash  consideration  of  Cdn.$770,000  (U.S.$528,000).

Also  on June 30, 1999, the Company purchased all the shares of InTouch.Internet
Inc.  for  Cdn.$428,000  (U.S.$293,000).  The  consideration  for  this purchase
included  cash  of  Cdn.$386,000 (U.S.$265,000) and 9,855 shares of common stock
valued  at  Cdn.$42,000 (U.S.$28,000) as stated in the Share Purchase Agreement.

Both  acquisitions have been accounted for by the purchase method of accounting.
In  both  acquisitions,  the  net  assets  acquired  included goodwill and other
intangibles  which will be amortized on a straight line basis over its estimated
useful  life  of three years.  These financial statements include the results of
operations  of  the  two acquired businesses for the period from July 1, 1999 to
September  30,  1999.


3.     SUBSEQUENT  EVENTS

     ACQUISITION  OF  NETROVER  INC.  AND  NETROVER  OFFICE  INC.

On  October  4,  1999, the Company purchased all the shares of NetRover Inc. and
NetRover  Office  Inc. for Cdn.$4 million (U.S.$2.7 million).  The consideration
for  the  purchase  included cash of Cdn.$3 million (U.S.$2 million) and 219,000
shares  of common stock valued at Cdn.$1 million (U.S.$680,000) as stated in the
Share  Purchase  Agreement.  These  purchases  will  be  accounted for under the
purchase  method  of  accounting.

     ACQUISITION  OF  CONNECT  NORTHWEST  AND  INTERNET  ARENA

On October 27, 1999, the Company purchased certain assets and liabilities of the
business  of  Connect  Northwest  for  $1.4  million.  The  purchase  price  was
satisfied  by  a  cash  payment  of  $670,000, amount payable of $70,000 and the
issuance  of  147,985 shares of common stock valued at $660,000 as stated in the
Asset  Purchase  Agreement.


<PAGE>
                              CYPOST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

                                 (U.S. Dollars)


3.     SUBSEQUENT  EVENTS  (CONTINUED)

On November 9, 1999, the Company purchased certain assets and liabilities of the
business  of  Internet  Arena  for $600,000.  The consideration for the purchase
included  cash  of  $242,000,  amount  payable  of $58,000 and 100,698 shares of
common  stock  valued  at  $300,000  as  stated in the Asset Purchase Agreement.

These  purchases  will be accounted for under the purchase method of accounting.

ACQUISITION  OF  PLAYA  CORPORATION

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

4.     LOANS

     During  the  nine  months  ended  September  30, 1999, the Company borrowed
$3,650,000 pursuant to two promissory note agreements.  The loans are unsecured,
bear interest at 8% per annum, and the principal and accrued interest are due on
demand.  The  lender  may elect to convert the loans into shares of common stock
of  the  Company  as  follows:


                              Shares
                       ---------------------

            Principal  Pre-Split  Post-Split
            ---------  ---------  ----------

            $1,000,000  1,000,000  1,500,000
             2,650,000  1,766,667  2,650,000


At the commitment dates of the promissory notes, the conversion prices were
less  than  the  fair  values of the common stock, hence a beneficial conversion
feature  is  attached to these convertible notes.  The amount of this beneficial
conversion  feature  has  been  recorded  as  interest  expense  and  additional
paid-in-capital for $1,378,000 for the three months ended September 30, 1999 and
$1,908,000  for  the  nine  months  ended  September  30,  1999.

     During  the  nine months ended September 30, 1999, $1 million of loans were
settled  by  the  issuance  of  1,500,000  shares  of  common stock valued at $1
million.

     At  September 30, 1999, the loans balance is $2,650,000.  The fair value of
the  loans  at  September 30, 1999 is not practicable to estimate because of the
conversion  features  associated with the loans; accordingly, it is not possible
to  estimate  the  present  value  of  the future cash flows with any reasonable
degree  of  precision.  On  November  24,  1999, these loans were converted into
2,650,000  shares  of  common  stock.


<PAGE>
                               CYPOST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

                                 (U.S. Dollars)

5.     SHARE  CAPITAL

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


6.     PRO  FORMA  DISCLOSURES  ON  BUSINESS  COMBINATION  (UNAUDITED)

As  described  in  Note  2,  the  Company completed the business acquisitions of
Hermes  Net  Solutions  Inc.  and  InTouch.Internet Inc.  The following presents
unaudited  pro  forma  financial  information as though each of the transactions
occurred  on  January  1,  1999  and 1998.  This pro forma financial information
includes  adjustments giving effect to goodwill amortization associated with the
acquisitions  and  interest  expense  on  debt  incurred  to  financial  the
acquisitions.


1. Basis of Presentation


The pro forma condensed consolidated financial information ("pro forma financial
information")  of  CyPost  Corporation  (the  "Company")  have  been prepared by
management  based  on  historical  financial  statements  of CyPost Corporation,
Hermes  Net  Solutions,  Inc.  ("Hermes"),  Intouch.Internet  Inc.  ("Intouch"),
NetRover Inc. and NetRover Office Inc. ("NetRover"), Internet Arena, and Connect
Northwest.

The pro forma financial information are not necessarily indicative of the actual
results  that  would have occurred if the acquisitions had been in effect on the
dates  indicated  and  are not necessarily indicative of what the actual results
will  be  in  the  future.

The  pro  forma  financial information give effect to the acquisitions of Hermes
and  Intouch  which  have  both  been accounted for under the purchase method of
accounting  and  summarized  as  follows.

i)  Intouch  -  On June 30, 1999, the Company acquired all the shares of Intouch
for  Cdn.  $428,000  (US $293,000).  The consideration for the purchase included
cash  of  Cdn.  $386,000  (US  $265,000)  and 9,855 shares of common stock for a
value  of  Cdn.  $42,000 (US $28,000).  The purchase included goodwill and other
intangibles  of  Cdn.  $470,000  (US  $322,000)  which  will  be  amortized on a
straight line basis over its estimated life of three years.  Intouch is based in
Vancouver,  Canada.

ii)  Hermes - On June 30, 1999, the Company acquired all of the shares of Hermes
for  cash  consideration  of  Cdn.  $777,000 (US $528,000) The purchase included
goodwill  and  other  intangibles  of Cdn.  $644,000 (US $437,000) which will be
amortized  on  a  straight  line  basis  over its estimated life of three years.
Hermes  is  based  in  Vancouver,  Canada.


The  pro  forma  financial  information  also give effect to the acquisitions of
NetRover,  Internet  Arena,  and  Connect Northwest which occurred subsequent to
September  30,  1999  and  all  are  accounted  for under the purchase method of
accounting  and  summarized  as  follows.

iii)  NetRover  -  On October 4, 1999, the Company acquired all of the shares of
NetRover  for  Cdn.  $4  million  (US  $2.7 million).  The consideration for the
purchase  included cash of Cdn.  $3 million (US $2.0 million) and 219,000 shares
of  common  stock  for  Cdn.  $1  million  (US $680,000).  The purchase included
goodwill  and  other  intangibles  of Cdn.  $4.2 million (US $2.9 million) which
will  be  amortized  on  a straight line basis over its estimated useful life of
three  years.  NetRover  is  based  in  Toronto,  Canada.

iv)  Internet Arena - On November 9, 1999, the Company purchased certain assets
and  liabilities  of  the  business  of  Internet  Arena  for  $600,000.  The
consideration  for  the  purchase  included  cash of $242,000, amount payable of
$58,000  and  100,698  shares  of  common  stock  for  a value of $300,000.  The
purchase  included  goodwill  and  other  intangibles  of $536,000 which will be
amortized  on  a  straight-line  basis  over  its estimated useful life of three
years.

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


2. Pro Forma Condensed Balance Sheet

The  pro  forma  condensed  balance  sheet  as of September 30, 1999 include the
acquisitions  of  Hermes  and  Intouch  and also assume that the acquisitions of
NetRover,  Internet  Arena and Connect Northwest were in effect at September 30,
1999.  The  pro  forma  condensed balance sheet give effect to the following pro
forma  adjustments.

(a) the elimination of intercompany balances and investments.
(b) the total cash paid ($2,912,000) and payable ($328,000) to acquire NetRover,
    Internet Arena and Connect Northwest was obtained through the convertible
    debt facility available to the Company.
(c) the number of shares issued to acquire NetRover, Internet Arena and Connect
    Northwest totalled 467,683 for a value of $1,640,000.
(d) goodwill and other intangible assets acquired in each of the acquisitions
    are described above and have been amortized on a straight-line basis over
    their estimated useful lives of three years.
(e) property and equipment acquired in the acquisitions is amortized over its
    estimated useful live of three years.


<PAGE>
3. Pro Forma Condensed Consolidated Statement of Operations

The  pro  forma  condensed  consolidated  statement  of  operations  assume  the
acquisitions  occurred  on  January  1,  1999  and  1998  and give effect to the
following.

(a) amortization of the goodwill and other intangible assets and property, plant
and  equipment  acquired  in  connection  with  the  purchase transactions  on a
straight-line  basis over its estimated useful life of
three  years.


Pro  Forma Condensed Consolidated Balance Sheet for the Nine Months Ended
September 30,  1999 (Unaudited)
<TABLE>
<CAPTION>


<S>                       <C>          <C>        <C>         <C>            <C>        <C>         <C>           <C>
                          INTERNET     CONNECT    PRO-FORMA   CONSOLIDATED
(US Dollars)              CYPOST       HERMES     INTOUCH     NETROVER       ARENA      NORTHWEST   ADJUSTMENTS   Notes

CURRENT ASSETS             2,324,855    216,593      42,809        113,546      3,685      45,253             0     2,584,257

PROPERTY AND                  76,443     33,648      38,065        253,728     41,926     150,453       109,000           2(e)
EQUIPMENT,NET

INVESTMENTS                  755,718          0           0              0          0           0      -755,718           2(a)
IN SUBSIDIARIES

GOODWILL AND                       0          0           0              0          0           0     4,125,748          1, 3
OTHER INTANGIBLES

OTHER ASSETS               1,376,513          0      23,957         42,534      6,760       5,170    -1,303,266           2(a)

TOTAL ASSETS               4,533,529    250,241     104,831        409,808     52,371     200,876     7,064,365

CURRENT LIABILITIES       (4,103,011)  (123,465)   (166,109)    (1,308,813)  (116,927)   (134,441)   (1,923,804)      2(a),(b)

LONG TERM LIABILITIES              0          0           0              0   (175,377)    (86,605)            0

SHAREHOLDERS EQUITY         (430,518)  (126,776)     61,278        899,005    239,933      20,170      (251,960)  2(c),(d),(e)
                                   3
TOTAL LIABILITIES         (4,533,529)  (250,241)   (104,831)      (409,808)   (52,371)   (200,876)            0    (7,064,365)
AND SHAREHOLDERS EQUITY

<S>                       <C>
(US Dollars)              TOTAL

CURRENT ASSETS

PROPERTY AND                 257,156
EQUIPMENT,NET
INVESTMENTS                        0
IN SUBSIDIARIES
GOODWILL AND               4,125,748
OTHER INTANGIBLES
OTHER ASSETS                  97,204

TOTAL ASSETS


CURRENT LIABILITIES       -6,316,389

LONG TERM LIABILITIES

SHAREHOLDERS EQUITY         -747,976

TOTAL LIABILITIES
AND SHAREHOLDERS EQUITY
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
Pro  Forma  Condensed  Consolidated  Statement  of  Operations  for  the  Nine  Months  Ended  September
30,  1999  (Unaudited)
<S>                  <C>     <C>     <C>      <C>       <C>             <C>                <C>                   <C>
  1999 (US Dollars)  CYPOST  HERMES  INTOUCH  NETROVER  INTERNET ARENA  CONNECT NORTHWEST  PRO FORMA ADJUSTMENT  Notes  TOTAL
                     ------  ------  -------  --------  --------------  -----------------  --------------------  -----  -----------

  REVENUE            14,000  290,000  268,000  1,864,000     466,000         563,000                  0                 3,465,000

  NET INCOME     (1,241,000)  36,056   27,000    18,000      (45,000)         (7,000)         (1,416,460)        3     (2,628,404)
  (LOSS)
</TABLE>
  LOSS PER SHARE

Pro  Forma  Condensed  Consolidated  Statement of Operations for the Nine Months
Ended  September 30,  1998  (Unaudited)


<TABLE>
<CAPTION>
  1998 (US Dollars)  CYPOST  HERMES  INTOUCH  NETROVER  INTERNET ARENA  CONNECT NORTHWEST  PRO FORMA ADJUSTMENT  Notes  TOTAL
                     ------  ------  -------  --------  --------------  -----------------  --------------------  -----  ----------
<S>                  <C>     <C>     <C>      <C>       <C>             <C>                <C>                   <C>    <C>

  REVENUE             0      135,000   389,000  1,700,000    295,000       382,000                   0                  2,901,000

  NET INCOME (LOSS) (156,000) (1,000)    2,000    (69,000)  (101,000)      (49,000)         (1,416,460)            3   (1,790,460)

  LOSS PER SHARE      (0.17)

</TABLE>



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

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

     Cypost  produces  and  markets computer privacy protection technologies and
provides  Internet conductivity to business and residential customers.  From the
Company's  inception date until approximately mid-March of 1999, the Company was
considered a development stage enterprise.  Since that time, the Company has (i)
discussedfive (5) software encryption products under its "Navaho" trademark, and
currently  is  marketing  two  (2)  products, (ii) acquired two Internet service
providers  during  the  nine-month  period  ending September 30, 1999, and (iii)
acquired  two  additional  ISPs  since  September  30,  1999.

      Because  the  Company is an early  stage in its  business  operations  its
revenues are subject to wide variation from quarter to quarter. In addition, the
Company is  electing to pursue a strategy of growing  through  acquisition.  The
size and timing of  acquisitions,  both past  acquisitions  and possible  future
acquisitions has been and will be affected by a number of factors which are hard
to predict and many of which are beyond the Company's control.  Because of these
factors,  the  results  of  operations  discussed  below are  unlikely  to be an
accurate indication of future performance and should be viewed with considerable
caution.

Results of operations  for the three months and nine months ended  September 30,
1999


      Substantially  all  of  the  Company's  revenue  is  earned  from its' ISP
operations  during  the  three  months   and  nine  months  ended  September 30,
1999.  These revenues  are attributable  virtually  entirely to  the  operations
of the two Internet  service provider  companies  (Hermes Net Solutions Inc. and
Intouch.Internet Inc.)  which  the  Company  acquired  on  June  30,  1999.  The
Company  generated  net  sales  of approximately $185,670 for the  three  months
ended  September  30  and  approximately  $197,068 for the nine  months  ended
September 30,  1999.  The Company  had no revenues for the corresponding periods
of  the  prior  year as the Company was in development state and had no  revenue
operations.

     Direct  costs,  which  consist  of telecommunications charges in respect of
providing  Internet  connection  services to customers, of approximately $49,275
were  incurred in the three months and nine months ended September 30, resulting
in  a gross margin of $136,395 (73%) for the three months and $147,793 (75%) for
the  nine months for the nine months ended September 30, 1999.  Selling, general
and  administrative  expenses  of  $432,521  and $1,167,442 for the three months
ended and nine months ended September 30, 1999, respectively includes $9,590 and
$261,093  for  sales  and  marketing,  $381,083  and  $406,193  for salaries and
benefits $38,500 and $137,778 for professional services, and $3,348 and $362,378
for  general  and  administrative  expenses.  Legal and professional fees, which
were  incurred primarily for the filing of registration statements and corporate
matters  amounted  to  $27,556  and $137,778 for the three months ended and nine
months  ended  September  30,  1999,  respectively  and are reported as selling,
general  and  administrative  expenses  on  the  statement  of  operations.  The
increase in the above noted costs during 1999 over 1998 results from the Company
emerging  from  the  development stage in 1999 and commencing revenue generating
activities.  Net  loss of $321,000 for the three months ended and $1,052,860 for
the  nine months ended September 30, 1999 results from a revenue base, which was
insufficient  to  cover  selling, general and administrative expenses.  Interest
expense  of $1,378,000 and $1,908,000 for the three months ended and nine months
ended  September 30, 1999 is in respect of the beneficial conversion features on
convertible  promissory  notes  between the Company and Blue Heron Venture Fund,
Ltd.  A  beneficial conversion feature arises when at the commitment date of the
promissory  note(the  date of agreement to the terms of the promissory note),the
convertible  promissory  note  is  "in-the-money"  (the  conversion price of the
promissory  note  is  less than the fair value of the common stock into when the
promissory  note  is  convertible).  The  interest  expense is calculated as the
difference  between the conversion price and the fair value of the common stock,
multiplied  by  the  number  of  common  stock into which the promissory note is
convertible  at  the  commitment  date  of  the loan.  The interest expense is a
non-cash  item  and  result  in  an  interest  in  paid-in-capital.


The  Company  hopes  to  achieve  profitable  operations  with a combination  of
additional ISPs through  acquisition and  providing  value added services in its
ISPs, and adding new products to its encryption-related  operations.


<PAGE>
Liquidity  and  capital  resources

      The  accompanying  financial  statements  have  been  prepared  on a going
concern  basis, which assumes that the company will continue in operation for at
least  one  year  and  will  be  able  to  realize its' assets and discharge its
liabilities in  the  normal course of business. The Company incurred net loss of
$1,699,000  for  the three  months  ended  September 30,  1999  and net loss  of
$2,960,860  for the nine months ended  September  30,  1999.  At  September  30,
1999,  the Company has a working capital deficiency  of  approximately $400,000.
These factors indicate that the Company's continuation as  a  going  concern  is
dependent  upon its ability to obtain adequate financing.

      Although  the  Company's  cash  position  as  of  September  30,  1999 had
increased to  $2,414,094,  as compared  to $47,212 as of December 31, 1998,  the
increase  in cash  is  primarily attributable  to  loans  made  to  the  Company
by Blue Heron Venture Fund, Ltd.  During  the  nine  months ended  September 30,
1999,  the  Company  borrowed  $3,650,000  from  Blue Heron Venture  Fund,  Ltd.
Subsequently,  $1,000,000  of  theses  loans  were  converted by the lender into
1,500,000  shares  of Common  stock  of  the  Company.  These  loans  were  made
under agreements  with that  lender  under  which the Company may draw up to $16
million  in  unsecured  loans. These loans bear interest at 8% per annum and are
payable  on demand.  They  are  convertible  into common stock of the Company.
If the total loans  of  $2,650,000  as of September  30,  1999  were  converted,
the  lender would be entitled to an aggregate of  1,766,667  million  shares  of
such  common  stock.  The  lender is free to withdraw  this credit  facility  at
any  time,  and  since  the  loans are  payable  on demand the Company's ability
to  continue  operations  is  dependent  upon  the willingness of its lender to
forebear from demanding payment.  The Company believes that Blue  Heron  Venture
Fund,   Ltd.  will  continue  not  to  demand   payment  of  the  loan  for  the
immediately  foreseeable   future,  but  it  is under no obligation  to  do  so.
Should the Company's lender demand payment, the Company  would  be  required  to
obtain  financing  from other sources.  The Company does not believe  that  bank
borrowings  are  available  under present  circumstances,  and  there can be  no
assurance  that  the  necessary financing  could be obtained from other sources.
Even  if  the  necessary  funding were available,  it might be available only on
terms which  management  would  not  find  acceptable.

     For  the  three  months ended and nine months ended September 30, 1999, the
Company's net cash used in operating activities totaled $365,104 and $930,199,
respectively. The net cash  used primarily results from a low revenue base which
was insufficient to  cover  selling, general  and  administrative  expenses  and
development  expenses.

     The  Company's  net  cash used in investing activities totaled $217,985 and
$894,453  for  the  three  months  and  nine  months  ended  September 30, 1999,
respectively.  The  majority of the net cash used in investing activities during
the nine months ended September 30, 1999 related to the Company's acquisition of
Hermes  Net  Solutions  Inc.  and Intouch.Internet Inc.  The Company's financing
activities  during  the nine months ended September 30, 1999 included $3,650,000
of  loans  provided  by  Blue Heron Venture Fund, Ltd.  and $556,000 provided by
issuance  of  shares  of  common  stock.  In  addition,  software  development
expenditures  incurred  in  developing  encryption  software  products  totaled
$114,339  and  $142,010  for the three and nine months ended September 30, 1999,
respectively.


<PAGE>
     The  Company's  net  cash increased by $2,366,882 from  $47,212 at December
31,  1998 to  $2,414,094  at  September  30,1999.

     Acquisition  of  Hermes  Net  Solutions  Inc.  and  Intouch.Internet  Inc.:
Effective  June  30,  1999, the Company purchased all the issued and outstanding
shares  of Hermes Net Solutions Inc.  for a total cash consideration of $528,000
USD, of which $453,000 USD was paid on closing and $75,000 USD holdback was paid
to  the  seller  in  December  1999,  as  defined  in  the  purchase  agreement.
Also  effective  June  30,  1999,  the  Company  purchased  all  the  issued and
outstanding  shares  of  Intouch Internet Inc. for a purchase price of  $293,000
USD. The consideration for this  purchase consisted  of cash of $265,000 USD and
the  issuance  of 6,570 pre-split, or 9,855 post-split, common  shares valued at
$28,000 USD. Both acquisitions, have  been  accounted  for  under  the  purchase
method  of  accounting.  In  both  acquisitions the net assets acquired included
goodwill  and  customer  lists  which  will be amortized over three years on the
straight line basis.

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

     Acquisition  of  Connect Northwest and Internet Arena: On October 24, 1999,
the Company  purchased  the  assets  of  the business of Connect Northwest for a
net purchase  price  of $1,400,000  USD.  The purchase price was satisfied by  a
cash payment of $670,000 USD  and  the  issuance of  147,985  of  the  Company's
common shares.

 On  November  9,  1999,  the  Company  purchased  the assets of the business of
Internet  Arena  for  a  purchase price of $600,000 USD.  The purchase price was
satisfied  by  a  cash  payment  of $242,000 USD, the issuance of 100,698 of the
Company's post-split common shares 20,140 shares were issued on closing with the
balance  of  80,558  shares  due  in  January  of 2000 along and a deferred cash
payment  of  $58,000  USD.


  These  purchases have  been  accounted  for  under the purchase  method  of
  accounting.

Results  of  Operations  for  the  Year  Ended  December  31,  1998

     During  the  year-ended December 31, 1998, the Company did not generate any
revenue.  It's  operations  consisted  of  incurring  general and administrative
expenses  of $383,046 which includes $253,127 for salaries and benefits, $32,118
for  professional services, and $97,801 for general and administrative expenses.
Development  expenses of $150,382 which represent amounts incurred in developing
encryption software products and amortization of $6,233 were also incurred.  The
net  loss  for  1998  totalled  $539,661.

     For  the  year-ended  December  31,  1998,  the  Company's net cash used in
operating  activities  totaled $286,276 and results primarily from a low revenue
base  which  was  insufficient  to  cover  selling,  general  and administrative
expenses  and  development  expenses.

     The  Company's  financing  activities consisted of an issue of common stock
which  generated cash of $323,000.  The Company's investing activities consisted
of  capital  asset  purchases  of  $27,711.


<PAGE>
Results  of  Operations  for  the  period  from  inception, September 5, 1997 to
December  31,  1997.

     The  Company's operations for the period from September 5, 1997 to December
31,  1997  were limited  and  consisted  of  incurring  $16,878  of  development
expenses.

     During  this  period,  the  Company  acquired  ePost  Innovations  Inc.,  a
wholly-owned  subsidiary  of  Mushroom  Innovations,  Inc.  ("Mushroom").  The
Company  and  Mushroom  have  officers  and  directors  in  common.



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

     The  transaction has been accounted for as a related party transfer between
companies  under  common  control.

     For  the  period  ended  December  31, 1997, the Company's net cash used in
operating  activites  totaled  $14,913  and consisted principally of development
expenses.  During  this  period, the Company's financing activities consisted of
an  issue  of  common  stock  which  generate  cash  of  $20,000.  The Company's
financing  activities  consisted  of  capital  asset  purchases  of  $852.



                           PART  II  -  OTHER  INFORMATION

Item  1.  Legal  Proceedings

      On June 11, 1999,  Canada Post  Corporation  filed a Statement of Claim in
the  Federal  Court of  Canada  in which it sought  injunctive  and  unspecified
monetary relief for the allegedly  "improper use by the Company of certain marks
and names which contain the component  "post".  On October 18, 1999, the Company
filed its Defence and Counterclaim.  In a motion heard November 24, 1999, Canada
Post  Corporation  challenged  certain parts of the Counterclaim and the Federal
Court reserved judgment. There has been no pre-trial discovery and no trial date
has  been  set.

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

     On  or about April 13, 2000, Steven Berry, the former CEO of CyPost brought
an  action  in  the  civil  court  of  the  State  of  New York, New York County
(Manhattan).  The  suit  involves the release for the transfer of 600,000 shares
of  restricted  144  shares  that  were issued to Steven Berry as a condition of
employment.  CyPost  and  Continental  Stock  Transfer  &  Trust  Company  as
defendants.  The damages that the Company expects to incur, are none at present.
As  the  shares  were  previously  issued  and are accounted for from the issued
shares.


<PAGE>

Item  2.  Changes  in  Securities

On June 30,  1999,  the  Company  issued  6,570  pre-split,  or 9,855 post-split
shares  of  its  common  stock  to the former owners of InTouch.Internet Inc. as
partial payment  for  the  Company's  acquisition  of  that  company.

      These shares were issued under the Section 4(2) exemption for transactions
by an issuer not involving a public  offering  under the Securities Act of 1933,
as  amended  (the  "Securities  Act").

      On  August  16, 1999, the Company issued 1,000,000 pre-split, or 1,500,000
post-split  shares  of  its  common stock to Blue Heron  Venture Fund Ltd ("Blue
Heron"), as discussed in Item 3., pursuant to Regulation S under  the Securities
Act.

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

      On November 4, the Company issued  3,000,000 shares of its common stock to
Blue Heron in  consideration  of which Blue Heron cancelled  indebtedness  owing
from the Company in the aggregate  principal amount of $3,000,000  together with
interest  accrued.  These shares were issued  directly to Blue Heron pursuant to
Regulation S under the Securities Act and no underwriting  commissions,  fees or
discounts  were  paid  in  connection  therewith.

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

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

Item  3.  Defaults  Upon  Senior  Securities

      On August 13,  1999 the Company  issued One  Million  shares of its common
stock to Blue Heron Venture Fund Ltd. in exchange for Blue Heron's  cancellation
of $1,000,000 of indebtedness  (together with interest  accrued thereon) owed by
the Company  which had been  evidenced  by one or more demand  promissory  notes
bearing interest at 8% per annum. Such issuance of stock and the cancellation of
the  indebtedness  was  preceded by a demand for payment in full from Blue Heron
which the Company was not able to meet. The shares were issued  directly to Blue
Heron  pursuant to the exemption  afforded by Regulation S of the Securities Act
and no  underwriting  commissions,  fees or  discounts  were paid in  connection
therewith.


<PAGE>
Item  4.  Submission  of  Matters  to  a  Vote  of  Security  Holders.

      On September 24, 1999 the Company increased its common share authorization
from 20  Million  to 30  Million  upon the  filing of an  Amended  and  Restated
Certificate of Incorporation with the Delaware  Secretary of State.  Shareholder
authorization  for this was effected through the delivery of written consents on
September 14, 1999 in accordance with the Delaware General  Corporation Law. The
Company had  previously  filed its Form 10-SB to register  its common stock with
the  Commission  on July  16,  1999 and the  registration  became  effective  on
September  16,  1999 upon the  expiration  of the 60 day  statutory  period  for
effectiveness  provided for in Section 12(g) of the  Securities and Exchange Act
of 1934,  as  amended.  Prior to  September  16,  1999,  the  Company  was not a
reporting  company within the meaning of the 1934 Act, and thus was not required
to  deliver a proxy or information statement under the term of that Act and
associated rules and  regulations.

Item  5.  Other  Information

None.

Item  6.  Exhibits  and  Reports  on  Form  8-K

      The Company filed a report on Form 8-K on September 17, 1999 regarding its
3:2  forward  stock  split.

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
                                      (Registrant)


Date:  May  30,  2000                 By:  /s/  Robert  Sendoh
                                      ------------------------
                                      Chief  Executive  Officer


<PAGE>


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