SUITE101 COM INC, 8-K, 1998-12-15

SUITE101 COM INC
8-K, 1998-12-15
BLANK CHECKS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):
DECEMBER 10, 1998

Suite101.com, Inc.
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(Exact name of Registrant as specified in its Charter)

DELAWARE 0-25136 33-0464753
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(State or other jurisdiction) (Commission File Number) (IRS Employer
Identification Number)

1122 MAINLAND STREET - SUITE 390 - VANCOUVER, BRITISH COLUMBIA, CANADA V6B 5L1
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(Address of principal executive offices)

Registrant's telephone number, including area code: (604) 682-1400

KINETIC VENTURES LTD.
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(Former name or former address, if changed since last report)

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TABLE OF CONTENTS

Item 1. Change in Control of the Registrant. . . . . 1

Item 2. Acquisition or Disposition of Assets . . . . 1

The Transaction . . . . . . . . . . . . . . 1
Description of i5ive's Business. . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . 4
Price Range of Common Stock. . . . . . . . . 24
Capitalization . . . . . . . . . . . . . . . 25
i5ive's Management Discussion and Analysis
of Financial Condition and Results of
Operation. . . . . . . . . . . . . . . . . 27
Business of i5ive. . . . . . . . . . . . . . 32
Management of i5ive. . . . . . . . . . . . . 39
Certain Transactions with i5ive Management
and Principal Stockholders . . . . . . . . 47
Principal Stockholders of the Company. . . . 48
General. . . . . . . . . . . . . . . . . . . 50

Item 5. Other Events . . . . . . . . . . . . . . . . 51

Item 7. Financial Statements and Exhibits. . . . . . 51

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ITEM 1. CHANGE IN CONTROL OF THE REGISTRANT:

On December 10, 1998, pursuant to an agreement effective October 30, 1998,
Suite101.com, inc., formerly Kinetic Ventures Ltd. (the "Company") completed a
transaction with i5ive communications, inc. Reference is made to ITEM 2.
ACQUISITIONS OR DISPOSITIONS OF ASSETS of this Current Report on Form 8-K for a
further description of that transaction. In the transaction, the Company issued
3,405,622 shares of Common Stock (after reflecting a 1-for-6 reverse stock
split of the Company's outstanding shares (the "Reverse Stock Split")** All
references in this Current Report to numbers of shares of Common Stock are after
reflecting the effectuation of a one-for-six reverse stock split of the
Company's outstanding Common Stock effective on November 25, 1998.).to
Northfield Capital Corporation and 284085 B.C. Ltd., the former shareholders of
i5ive communications, Inc. In addition, Northfield Capital Corporation, Julie
M. Bradshaw and Sunny H. Hirai, both of whom are officers and Directors of i5ive
communications, inc., and two of its management employees, acquired concurrently
with the closing from Benitz & Partners Limited, a principal shareholder of the
Company, an aggregate of 2,500,000 shares of Common Stock. On the closing of
the transaction, Peter L. Bradshaw, Julie M. Bradshaw and Sunny H. Hirai were
elected Directors of the Company and the Company's three Directors prior to the
closing resigned. As a consequence of the transactions, Northfield Capital
Corporation, 284085 B.C. Ltd., of which Mr. Bradshaw is an officer, Director and
principal shareholder, Ms. Bradshaw and Mr. Hirai hold an aggregate of 5,610,340
shares of the Company's outstanding Common Stock or approximately 55.8% of the
shares outstanding. The election of Mr. Bradshaw, Ms. Bradshaw and Mr. Hirai as
Directors of the Company was a condition to the closing of the transaction.
Except for the foregoing, there are no understandings or arrangements among
Northfield Capital Corporation, 284085 B.C., Ltd. Mr. Bradshaw, Ms. Bradshaw,
Mr. Hirai and their associates or the former Directors of the Company or Benitz
& Partners Limited with respect to the election of Directors or other matters in
the future.

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS:

THE TRANSACTION

On December 10, 1998, the Company completed the purchase from Northfield
Capital Corporation and 284085 B.C. Ltd. (herein collectively referred to as the
"Vendors"), pursuant to an Agreement (the "Agreement") effective October 30,
1998, of all of the issued and outstanding common shares (the "Shares") of i5ive
communications inc., a British Columbia corporation ("i5ive"). The purchase
price for the Shares was the issuance of 3,405,622 shares of Common Stock of the
Company.

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* All references in this Current Report to number of shares of Common Stock
are after reflecting the effecutation of a one-for-six reverse stock split of
the Company's outstanding Common Stock effective on November 25, 1998.

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On execution of the Agreement the sum of approximately US $65,000
(Cdn$100,000) was advanced by the Company to i5ive to be used to finance the
business of i5ive. In addition, Northfield Capital Corporation, Julie M.
Bradshaw and Sunny H. Hirai, both of whom are officers and Directors of i5ive,
and two of its management employees acquired concurrently with the closing from
Benitz & Partners Limited, a principal shareholder of the Company, an aggregate
of 2,500,000 shares of Common Stock. On the closing of the transaction, Peter
L. Bradshaw, Julie M. Bradshaw and Sunny H. Hirai, all officers and Directors if
i5ive, were elected Directors of the Company and the Company's three Directors
prior to the closing resigned. In connection with the closing, the Company filed
an amendment to its Certificate of Incorporation to change its name to
Suite101.com, Inc.

Effective November 18, 1998, the Agreement was amended to eliminate as
conditions to the closing of the transaction requirements that the Company
complete a private sale of securities resulting in the Company having working
capital and net assets of not less than $3.0 million as of the closing date and
quotations for the Company's Common Stock appear on the OTC Bulletin Board for
at least five consecutive trading days prior to the closing.

References herein to the "Company" refer to Suite101.com, Inc. (formerly
known as Kinetic Ventures Ltd.), a Delaware corporation, and references to
"i5ive" refer to i5ive communications, inc. a British Columbia corporation and,
subsequent to the closing of the transaction, a wholly owned subsidiary of the
Company.

DESCRIPTION OF i5ive's BUSINESS

GENERAL i5ive is an Internet company engaged in the creation, operation and
maintenance of a World Wide Web based community, known as Suite101.com, for
Internet users to express themselves, share ideas, interests and expertise, and
publish content accessible to other users with common interests. i5ive's
community includes its visitors and Members who are Internet users and
Contributing Editors who create their own personal Web sites organized topically
into twelve major Communities of Interest. i5ive believes that user affinity to
the Web occurs when users relate personally to their online experience, and the
more users are active in the creation of that experience, the more personal the
experience becomes. By establishing a free service enabling Internet users to
create their own Web sites in Communities of Interest, i5ive further believes
that the users will in turn write about their experiences and offer their
knowledge to other Internet users as a means to find the best content and
information on the Internet - quickly and easily. These Communities of Interest
provide the context

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and tools for Web users to publish content, to communicate with other users,
and to access a centralized and easy-to-navigate destination for the Best of
the Web content. This process enhances the Member's experience by allowing
them to express themselves, share ideas, interests and expertise and to
publish content accessible to other Members and visitors with common
interests.

i5ive has realized no material revenues to date. From inception in
April 1996 through September 30, 1998, its total revenues were $35,863.
During that period, it has accumulated losses of $600,666. i5ive introduced
a new user interface in November 1998, which offers substantially improved
presentation of Member-generated content in an intuitive topical format -
Communities of Interest - and has been well received by i5ive's Members and
visitors. i5ive's current focus is to build visitor traffic and Member and
Contributing Editor enrollment into its community. At November 30, 1998, it
had approximately 30,000 Members and had grown from 35 Contributing Editors
in October 1996 to 441 in November 1998. During the month of November 1998,
the site received approximately 1.2 million page views.

i5ive's business plan is to continue to expand its numbers of visitors,
Members and Contributing Editors in an effort to expand its critical mass as
well as to continue to improve and enhance its site infrastructure through the
introduction of improved technology. No significant efforts have been expended
to date to realize revenues.

i5ive's revenue model will concentrate on electronic commerce
("e-commerce"). Through e-commerce, i5ive intends to provide its Members with
access to the products offered by leading marketers and service providers
whereby i5ive will participate with their e-commerce partners ("E-Providers") in
a percentage of the proceeds from online transactions.

Users are seeking from the Web the same opportunity for expression,
interaction, sharing and recognition that they seek in the everyday world.
Generally, a typical Internet user's experience surfing the Web has been
essentially one-way-searching and viewing Web sites containing professionally
created content on topics of general interest, such as current events, sports,
finance, politics and weather. In general, the Web does not provide a context
to publish, promote, search, view and react to personal content. While Internet
search and navigational sites have improved a user's ability to seek out
aggregated Web content, these sites are not primarily focused on providing a
platform for publishing or aggregating the rapidly increasing volume of
personalized content created by users with similar interests, or enabling such
users to interact with one another. Similarly, users browsing the Web are
increasingly seeking ways of accessing unique, personalized content, and
interacting and

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communicating with other individuals with similar interests. Often the most
relevant content for a user is that generated by other users who share a
common interest. Online communities offer a centralized means of accessing
diverse, user-created content in an easy-to-navigate context and the ability
to interact directly with the author of such personalized content. For
businesses and advertisers, online communities hold the potential of reaching
highly targeted audiences within a more personalized context, thus providing
the opportunity to increase advertising efficiency and improve the likelihood
of a sale. i5ive offers Web users the ability to join and become actively
involved in a Web community of personal Web sites. i5ive provides its
Members and Contributing Editors with the publishing tools to quickly and
easily create and participate in their own Web sites in one of the topically
organized Communities of Interest, such as Business, Arts & Humanities,
Science or Travel.

Members are encouraged to become active participants in the i5ive community
by updating their sites and communicating with others through chat and on line
discussion services provided by i5ive. i5ive offers Members seeking greater
involvement the opportunity to become Contributing Editors who generate articles
in their topic of interest and monitor the community for compliance with
community guidelines. In addition, i5ive aims to make the Suite101.com
community a primary destination point for Internet users seeking personalized,
user-created content. Through i5ive's enhanced user interface, i5ive provides a
central site for Internet users to quickly access and view topically organized
content created by fellow visitors, Members and Contributing Editors.

RISK FACTORS

An investment in the Company's common stock involves a high degree of risk.
The following factors, in addition to the other information contained herein,
should be carefully considered in evaluating the Company and the business of
i5ive before purchasing shares of the Company's common stock. See "General" for
a cautionary statement regarding risks and uncertainties relating to forward
looking statements in this Current Report.

I5IVE IN EARLY DEVELOPMENT STAGE

i5ive is in the early stage of developing its business plan and
operations. i5ive has realized no material revenues to date. From inception
in April 1996 through

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September 30, 1998, its total revenues were $35,863. During that period, it
has accumulated losses of $600,666. i5ive has not achieved profitability on a
quarterly or annual basis to date, and i5ive anticipates that it will
continue to incur net losses for the foreseeable future. The extent of these
losses will be dependent, in part, on the amount and rates of growth in
i5ive's net revenue from e-commerce transactions. i5ive expects its operating
expenses to increase significantly, especially in the areas of visitor and
Member generation, brand marketing and e-commerce promotion, and, as a
result, it will need to generate increased quarterly net revenue if
profitability is to be achieved. i5ive believes that period-to-period
comparisons of its operating results will not be meaningful and that the
results for any period should not be relied upon as an indication of future
performance. To the extent that net revenue does not grow at anticipated
rates or that increases in its operating expenses precede or are not
subsequently followed by commensurate increases in net revenue, or that i5ive
is unable to adjust operating expense levels accordingly, i5ive's business,
results of operations and financial condition will be materially and
adversely affected. There can be no assurance that i5ive's operating losses
will not increase in the future or that i5ive will ever achieve or sustain
profitability.

i5ive is currently developing its business through efforts to attract
visitors, Members and Contributing Editors to its Web-based community. At
November 30, 1998, it had approximately 30,000 Members and had grown from 35
Contributing Editors in October 1996 to 441 in November 1998. During the
month of November 1998, the site received approximately 1.2 million page
views. i5ive cannot assure that such growth rates are sustainable. i5ive's
business plan is to continue to expand its numbers of visitors, Members and
Contributing Editors in an effort to reach a sufficient level of critical
mass as well as to continue to improve and enhance its site infrastructure
through the introduction of improved technology. No significant efforts have
been expended to date to realize revenues. Currently, i5ive has six
full-time employees. Accordingly, there can be no assurance that i5ive's
business plan can be successfully developed or that it will realize any
material revenues.

LIMITED OPERATING HISTORY; ANTICIPATED LOSSES; NO ASSURANCE OF PROFITABILITY

I5ive was founded in April 1996 and has had no material revenues to date.
Accordingly, i5ive has a no operating history upon which an evaluation of i5ive,
its current business plans and its prospects can be based, each of which must be
considered in light of the risks, expenses and problems frequently encountered
by all companies in the early stages of development, and particularly by such
companies entering new and rapidly developing markets like the Internet. Such
risks include,

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without limitation, the lack of broad acceptance of the community concept on
the Internet, the possibility that the Internet will fail to achieve broad
acceptance as a commercial medium, the lack of acceptance by consumers of
e-commerce, the inability of i5ive to attract visitors, or retain Members and
Contributing Editors, the inability of i5ive to generate significant
e-commerce-based revenues from its visitors and Members, a new and unproven
business concept, i5ive's ability to anticipate and adapt to a developing
market, the failure of i5ive's network infrastructure (including its server,
hardware and software) to efficiently handle its Internet traffic, changes in
laws that adversely affect i5ive's business, the possibility that i5ive will
be unable to manage effectively any rapid expansion of its operations,
including the amount and timing of capital expenditures and other costs
relating to any expansion of i5ive's operations, the introduction and
development of different or more extensive communities by direct and indirect
competitors of i5ive, including those with greater financial, technical and
marketing resources, the inability of i5ive to maintain and increase levels
of traffic on its Website, the inability of i5ive to attract, retain and
motivate qualified personnel, technical difficulties, system downtime or
Internet brownouts, the amount and timing of operating costs and capital
expenditures relating to development of i5ive's business, operations and
infrastructure, and general economic conditions. To address these risks,
i5ive must, among other things, attract visitors and retain Members and
Contributing Editors, attract and retain a significant number of E-Providers,
respond to competitive developments, continue to form and maintain
relationships with strategic partners attract, respond to competitive
developments, retain and motivate qualified personnel, and develop and
upgrade its technologies and commercialize its services incorporating such
technologies. There can be no assurance that i5ive will be successful in
addressing such risks, and any failure to do so could have a material adverse
effect on i5ive's business, results of operations and financial condition.
Due to the foregoing factors, i5ive's quarterly net revenue and operating
results are difficult to forecast. Consequently, i5ive believes that period
to period comparisons of its operating results will not necessarily be
meaningful and should not be relied upon as an indication of future
performance. It is likely that in some future quarter or quarters i5ive's
operating results may fall below the expectations of securities analysts and
investors. In such event, the trading price of the Company's Common Stock
would likely be materially and adversely affected.

UNPROVEN BUSINESS; DEPENDENCE ON MEMBERS

The success of i5ive's business depends upon its ability to expand upon and
develop its community-based platform of Internet access and to generate multiple
revenue streams. Currently, i5ive has no source of material revenues. The
potential

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success of this business concept is unproven, and, to be successful, i5ive
must, among other things, develop and market concepts that achieve broad
market acceptance by its Members and, Internet users. i5ive is and will be
substantially dependent upon its Member-generated content, the promotional
efforts of its Members, the acceptance by its visitors and Members of
advertising and other promotional programs of third parties and i5ive, and
its ability and the ability of its Contributing Editors to attract Web users
to its site and to reduce the demands on Company personnel. This concept has
existed for only a limited period of time, and, as a result, is relatively
unproven. There can be no assurance that i5ive's Member-generated content or
the promotional efforts of its Members will continue to attract users to
i5ive's Website. There can also be no assurance that i5ive's Members and
Contributing Editors will continue to devote time voluntarily to improving
the community, or, given the fact that i5ive provides free disk space to its
Members and i5ive supports the involvement of its Contributing Editors, that
third parties will not attempt to hold i5ive and the Company responsible for
such content and/or any actions or omissions of such Contributing Editors.
There also can be no assurance that i5ive's business, results of operations
and financial condition would not be materially and adversely affected if a
substantial number of Members or Contributing Editors became dissatisfied
with i5ive's services or its intention to commercialize those services or
that the Contributing Editors become dissatisfied with the amounts of
compensation paid by i5ive to them. Moreover, considering the modest level of
compensation paid to Contributing Editors, there can be no assurance that
consistent levels of high quality Member generated content will be
maintained. These levels of compensation may hinder i5ive's efforts in the
future to attract Contributing Editors. Further, there can be no assurance
that the community on the Internet or i5ive's services will achieve broad
market acceptance. Accordingly, no assurance can be given that i5ive's
business will be successful or that it can sustain revenue growth or generate
significant profits.

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING

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capital expenditures for at least the next 12 months. The Company may need
to raise additional funds in order to fund more aggressive promotions and
more rapid expansion, to develop newer or enhanced services, to respond to
competitive pressures or to acquire complementary businesses, technologies or
services. There can be no assurance that any additional financing, including
the funds intended to be raised in the private placement, will be available
on terms favorable to the Company, or at all. If adequate funds are not
available or not available on acceptable terms, the Company may not be able
to fund its expansion, promote its e-commerce as the Company desires, or,
develop or enhance services or respond to competitive pressures. Any such
inability could have a material adverse effect on the Company's business,
results of operations and financial condition. Additional funds raised
through the issuance of equity or convertible debt securities, will result in
reducing the percentage ownership of the stockholders of the Company and,
stockholders may experience additional dilution and such securities may have
rights, preferences or privileges senior to those of the rights of the
Company's Common Stock.

As a result of i5ive's limited operating history, i5ive has limited
meaningful historical financial data upon which to base planned operating
expenses. Accordingly, i5ive's anticipated expense levels in the future are
based in part on its expectations as to future revenue from proposed e-commerce
revenue-sharing arrangements, and anticipated growth in visitor traffic and in
membership and will become, to a large extent, fixed. Revenues and operating
results generally will depend on the volume of, timing of and ability to
complete transactions, which are difficult to forecast. In addition, there can
be no assurance that i5ive will be able to accurately predict its net revenue,
particularly in light of the intense competition for the sale of products and
services on the Web, revenue-sharing opportunities, i5ive's limited operating
history and the uncertainty as to the broad acceptance of the Web as an
e-commerce medium. i5ive may be unable to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall or other unanticipated changes
in the e-commerce industry. Any failure by i5ive to accurately make such
predictions would have a material adverse effect on i5ive's business, results of
operations and financial condition.

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financing will be available on terms favorable to the Company, or at all. If
adequate funds are not available or not available on acceptable terms, the
Company may not be able to fund its expansion, promote itself as the Company
desires, take advantage of unanticipated acquisition opportunities, develop
or enhance services or respond to competitive pressures. Any such inability
could have a material adverse effect on the Company's business, results of
operations and financial condition.

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS; SEASONALITY; UNPREDICTABILITY OF
FUTURE NET REVENUE

i5ive expects operating results to fluctuate significantly in the future as
a result of a variety of factors, many of which are outside of i5ive's control.
These factors include demand for the products i5ive intends to market through
its Web site, consumers' acceptance of e-commerce, the level of traffic on the
Suite101.com site, the amount and timing of capital expenditures and other costs
relating to the expansion of i5ive's operations, the introduction of new or
enhanced services by i5ive or its competitors, the timing and number of new
hires, the availability of desirable products and services for sale through
i5ive's Web site, the loss of a key strategic or marketing relationship by
i5ive, changes in i5ive's marketing policy or those of its competitors, the mix
of products and services marketed by i5ive's E-Providers, engineering or
development fees that may be paid in connection with adding new Web site
development and publishing tools, technical difficulties with the Suite101.com
site, general economic conditions, and economic conditions specific to the
Internet or all or a portion of the technology market. As a strategic response
to changes in the competitive environment, i5ive may from time to time make
certain pricing, service or marketing decisions or business combinations that
could have a material adverse effect on i5ive's business, results of operations
and financial condition. i5ive expects to experience seasonality in its
business, with user traffic on the Suite101.com site potentially being lower
during the summer and year-end vacation and holiday periods when overall usage
of the Web is lower. Because Web-based e-commerce is an emerging market,
additional seasonal and other patterns may develop in the future as the market
matures. Any seasonality is likely to cause quarterly fluctuations in i5ive's
operating results, and there can be no assurance that such patterns will not
have a material adverse effect on i5ive's business, results of operations and
financial condition.

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MANAGEMENT OF GROWTH AND RELATIONSHIPS; BRIEF TENURE OF MANAGEMENT; DEPENDENCE
ON KEY PERSONNEL

In developing its business plan, i5ive expects to be required to establish
and manage multiple relationships with various strategic and E-Providers,
vendors, distributors, providers of services, technology licensors, Members,
advertisers and other third parties. To date, only a limited number of such
relationships have been established. These requirements to enter into these
relationships will be exacerbated in the event of material growth of i5ive or in
the number of third party relationships, and there can be no assurance that
i5ive's systems, procedures or controls will be adequate to enable i5ive to
establish and enter into these relationships, to support any substantial growth
in i5ive's operations or that i5ive's management will be able to implement or
manage any growth effectively. To effectively manage growth, i5ive must
establish, implement and improve operational, financial and management
information systems and expand, train and manage its employee base. i5ive's
development is and will continue to be substantially dependent on the abilities
and performance of its executive officers and other key employees. The loss of
the services of any of its executive officers or other key employees could have
a material adverse effect on the prospects, business development, and results of
operations and financial condition of i5ive. Competition for senior management,
experienced sales and marketing personnel, qualified Web engineers and other
employees is and is expected to continue to be intense, and there can be no
assurance that i5ive will be successful in attracting and retaining such
personnel. There can be no assurance that i5ive may not experience difficulty
from time to time in hiring and retaining the personnel necessary to support the
growth of its business. The failure of i5ive to successfully manage its
personnel requirements would have a material adverse effect on i5ive's business,
results of operations and financial condition.

INTENSE COMPETITION

The market for community based e-commerce on the Internet is new and
rapidly evolving and competition for visitors, Members and Contributing Editors,
strategic partners and E-Providers is new and rapidly evolving, and competition
for visitors, Members, Contributing Editors, strategic partners and E-Providers
is intense and is expected to increase significantly in the future. Barriers to
entry are relatively insubstantial. i5ive believes that the principal
competitive factors for companies seeking to create community on the Internet
are content, critical mass, functionality, brand recognition, Member affinity
and loyalty, broad demographic focus and open access for visitors. Other
companies who are primarily focused on creating Web-based

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community on the Internet are Geocities, Inc., Tripod, Inc., a subsidiary of
Lycos, Inc., Angelfire Communications, Xoom.com, Inc. and theglobe.com. Each
of these competitors is significantly larger than i5ive and more
well-established and well-known in the Internet industry. I5ive will likely
also face competition in the future from Web directories, search engines,
shareware archives, content sites, commercial online service provides
("OSPs"), sites maintained by Internet service providers ("ISPs") and other
entities that attempt to or establish communities on the Internet by
developing their own community or acquiring one of i5ive's competitors. In
addition, i5ive could face competition in the future from traditional media
companies, a number of which, including Disney, CBS and NBC have recently
made significant acquisitions of or investments in Internet companies.
Further, there can be no assurance that i5ive's competitors and potential
competitors will not develop communities that are equal or superior to those
of i5ive or that achieve greater market acceptance than i5ive's community.

i5ive also competes for visitors and Members with many Internet content
providers and ISPs, including Web directories, search engines, shareware
archives, content sites, commercial online services and sites maintained by
Internet service provides, as well as thousands of Internet sites operated by
individuals and government and educational institutions. These competitors
include free information, search and content sites or services, such as American
Online, Inc. ("AOL"), CNET, Inc. ("CNET"), CNN/Time Warner, Inc. ("CNN/Time
Warner"), Excite, Inc. ("Excite"), Infoseek Corporation ("Infoseek"), Lycos,
Inc. ("Lycos"), Netscape Communications Corporation ("Netscape"), Microsoft
Corporation ("Microsoft"), and Yahoo! Inc. ("Yahoo!"). i5ive also competes with
the foregoing companies, as well as traditional forms of media, such as
newspapers, magazines, radio and television. i5ive believes that the principal
competitive factors in attracting strategic partners and other sources of
e-commerce business include the amount of traffic on its Web site, name
recognition, customer service, the demographics of i5ive's Members and viewers,
i5ive's ability to offer targeted audiences and the overall cost-effectiveness
of the e-commerce opportunities offered by i5ive. i5ive believes that the
number of Internet companies relying on Web-based e-commerce and advertising
revenue will increase substantially in the future. Accordingly, i5ive will
likely face increased competition, resulting increased pressures on its revenue
sharing percentages which could, in turn, have a material adverse effect on
i5ive's business, results of operations and financial condition.

Substantially all of i5ive's existing and potential competitors, including
Web directories and search engines and large traditional media companies, have
longer operating histories in the Web market, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than i5ive. Such

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competitors are able to undertake more extensive marketing campaigns for
their brands and services, adopt more aggressive advertising pricing policies
and make more attractive offers to potential employees, visitors, Members,
distribution partners, E-Providers, advertisers and third party content
providers. There can be no assurance that Internet content providers and
ISPs, including Web directories, search engines, shareware archives, sites
that offer professional editorial content, commercial online services and
sites maintained by ISPs will not be perceived by potential strategic
partners, E-Providers and advertisers as having more desirable Web sites. In
addition, many persons with whom i5ive would seek to enter into a strategic
relationship have already established collaborative relationships with
i5ive's competitors or potential competitors, and other high-traffic Web
sites. Accordingly, there can be no assurance that i5ive will be able to grow
its visitor and Membership base, traffic levels and customer base or retain
its current Members, traffic levels or customers, or that competitors will
not experience greater growth in traffic than i5ive as a result of such
relationships which could have the effect of making their Web sites more
attractive, or that i5ive's strategic partners will not sever or will elect
not to renew their agreements with i5ive. There can also be no assurance
that i5ive will be able to compete successfully in the Internet or that
competition will not have a material adverse effect on i5ive's business,
results of operations and financial condition.

RISK OF CAPACITY CONSTRAINTS; SYSTEM FAILURES; TECHNOLOGICAL RISKS

The performance of i5ive's server and networking hardware and software
infrastructure is critical to i5ive's business and reputation and its ability to
attract Web users, new Members and E-Providers to i5ive's Web site. Any system
failure that causes an interruption in service or a decrease in responsiveness
of i5ive's Web site could result in less traffic on i5ive's Web site and, if
sustained or repeated, could impair i5ive's reputation and the attractiveness of
its Web site. To ensure backup and restoration of all production data, i5ive's
system is regularly backed up and stored off site. Backup media is rotated into
off site archives to ensure data integrity should catastrophic events occur on
site. Any disruption in the Internet access or any failure of i5ive's server
and networking systems to handle current or higher volumes of traffic could have
a material adverse effect on i5ive's business, results of operations and
financial condition. An increase in the use of i5ive's Web site could strain
the capacity of its systems, which could lead to slower response time or system
failures. Slowdowns or system failures adversely affect the speed and
responsiveness of i5ive's Web site and would diminish the experience for i5ive's
Members and visitors and reduce the number of page views received thereby
reducing i5ive's marketing and e-commerce revenues. The ability of i5ive to
provide effective Internet connections or of its systems

<PAGE>

to manage substantially larger numbers of customers at higher transmission
speed is as yet unknown, and, as a result, i5ive faces risks related to its
ability to scale up its customer levels while maintaining superior
performance. If its usage of bandwidth increases, it will need to purchase
additional servers and networking equipment and rely more heavily on its
equipment and on equipment and services provided by others to maintain
adequate data transmission speeds, the availability of which may be limited
or the cost of which may be significant or may place i5ive at a disadvantage.
The successful delivery of i5ive's services is also dependent in substantial
part upon the ability of i5ive to protect i5ive's servers and network
infrastructure against damage from human error, fire, flood, power loss,
telecommunications failure, sabotage, intentional acts of vandalism and
similar events. Despite precautions planned to be taken by i5ive, the
occurrence of natural disasters or other unanticipated problems at its
facilities could result in interruption in the services provided by i5ive or
significant damage to its equipment. i5ive and its servers are vulnerable
to computer viruses, break-ins, and similar disruptions from unauthorized
tampering. The occurrence of any of these events could result in
interruptions, delays or cessations in service, which could have a material
adverse effect on i5ive's business, results of operations and financial
condition. In addition, i5ive's reputation could be materially and adversely
affected. The market in which i5ive competes is characterized by rapidly
changing technology, evolving industry standards, frequent new product and
service announcements and enhancements and changing customer demands.
Accordingly, i5ive's success will depend on its ability to adapt to rapidly
changing technologies and industry standards, and its ability to continually
improve the speed, performance, features, ease of use and reliability of its
server and networking system in response to both evolving demands of the
marketplace and competitive service and product offerings. Any failure to
rapidly adapt in a changing environment would have a material adverse effect
on i5ive's business, results of operations and financial condition. i5ive
intends to continually strive to incorporate new technology into its Web site
for the benefit of its Members, visitors and E-Providers. Introducing new
technology into i5ive's systems involves numerous technical challenges,
significant amounts of capital, substantial amounts of personnel resources
and often times takes many months to complete. There can be no assurance
that i5ive will be successful at integrating such technology into its Web
site on a timely basis or without degrading the responsiveness and speed of
its Web site or that, once integrated, such technology will function as
expected.

RISK OF RELIANCE ON INTERNALLY DEVELOPED SYSTEMS

i5ive uses and intends to use an internally developed system for its Web
site and substantially all aspects of its transaction processing and order
management systems.

<PAGE>

This system has not been fully developed. i5ive's inability to further
develop and modify this system as necessary to accommodate increased levels
of traffic on its Web site or any substantial volume through its transaction
processing and order management systems may cause unanticipated system
disruptions, slower response times, impaired quality and speed of order
fulfillment, degradation in customer service, and delays in reporting
accurate financial information. Any of these events could have a material
adverse effect on i5ive's business, results of operations and financial
condition.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

i5ive is not currently subject to direct regulation by any government
agency, other than regulations applicable to businesses generally, and there are
currently few laws or regulations directly applicable to access to or commerce
on the Internet. However, due to the increasing popularity and use of the
Internet, a number of legislative and regulatory proposals are under
consideration by U.S. and Canadian federal, state, provincial, local and foreign
governmental organizations, and it is possible that a number of laws or
regulations may be adopted with respect to the Internet relating to such issues
as user privacy, user screening to prevent inappropriate uses of the Internet
by, for example, minors or convicted criminals, taxation, infringement, pricing,
content regulation, quality of products and services and intellectual property
ownership and infringement. The adoption of any such laws or regulations may
decrease the growth in the use of the Internet, which could, in turn, decrease
the demand for i5ive's community, increase i5ive's cost of doing business, or
otherwise have a material adverse effect on i5ive's business, results of
operations and financial condition.

Moreover, the applicability to the Internet of existing laws governing
issues such as property ownership, copyright, trademark, trade secret,
obscenity, libel and personal privacy is uncertain and developing. Any new
legislation or regulation, or application or interpretation of existing laws,
could have a material adverse effect on i5ive's business, results of operations
and financial condition. There can be no assurance that any legislation will
not be enacted in the future that could expose i5ive to substantial liability.
Legislation could also dampen the growth in the use of the Web generally and
decrease the acceptance of the Web as a communications and commercial medium,
and could, thereby, have a material adverse effect on i5ive's business, results
of operations and financial condition. It is also possible that i5ive's use of
"cookies" to track demographic information and user preferences and to target
advertising may

<PAGE>

become subject to laws limiting or prohibiting their use. A "cookie" is a
bit of information keyed to a specific server, file pathway or directory
location that is stored on a user's hard drive, possibly without the user's
knowledge. A user is generally able to remove cookies. Germany, for
example, has imposed laws limiting the use of cookies, and a number of
Internet commentators, advocates and governmental bodies in the United States
and other countries have urged the passage of laws limiting or abolishing the
use of cookies. Limitations on or elimination of i5ive's use of cookies
could limit the effectiveness of i5ive's targeting of advertisements, which
could have a material adverse effect on i5ive's business, results of
operations and financial condition. In addition, a number of legislative
proposals have been made at the U.S. and Canadian federal, state, provincial
and local level that would impose additional taxes on the sale of goods and
services over the Internet and certain jurisdictions have taken measures to
tax Internet-related activities. Recently, the U.S. Congress has considered
a number of versions of legislation which would place a moratorium of a
number of years on any new taxation of Internet commerce. There can be no
assurance that nay such legislation will be adopted by the U.S. Congress.
Moreover, it is likely that, once such moratorium is lifted, some type of
U.S. federal and/or state taxes will be imposed upon Internet commerce, and
there can be no assurance that such legislation or other attempts at
regulating commerce over the Internet will not substantially impair the
growth of commerce on the Internet and, as a result, adversely affect i5ive's
opportunity to derive financial benefit from such activities. In addition to
the foregoing areas of recent legislative activities, several
telecommunications carriers are currently seeking to have telecommunications
over the Web regulated by the U.S. Federal Communications Commission (the
"FCC") in the same manner as other telecommunications services. For example,
America's Carriers Telecommunications Association has filed a petition with
the FCC for this purpose. In addition, because the growing popularity and
use of the Web have burdened the existing telecommunications infrastructure
and many areas with high Web use have begun to experience interruptions in
phone service, local telephone carriers have petitioned the FCC to regulate
ISPs and OSPs in a manner similar to long distance telephone carriers and to
impose access fees on the ISPs and OSPs. If either of these petitions is
granted, or the relief sought therein is otherwise granted, the costs of
communicating on the Web could increase substantially, potentially slowing
growth in use of the Web, which could, in turn, decrease demand for i5ive's
services or increase i5ive's cost of doing business. Due to the global
nature of the Web, it is possible that, although transmissions by i5ive over
the Internet originate primarily in British Columbia, Canada, the governments
of various states in the United States and foreign countries might attempt to
regulate i5ive's transmissions or prosecute i5ive for violations of their
laws. There can be no assurance that violations of local laws will not be
alleged or charged by state or foreign governments, that i5ive might not
unintentionally violate such laws or that such laws will not be modified, or
new

<PAGE>

laws enacted, in the future. Any of the foregoing developments could have a
material adverse effect on i5ive's business, results of operations and
financial condition. In addition, as i5ive's services are available over the
Internet in multiple foreign countries, provinces, states and other
jurisdictions, such jurisdictions may claim that i5ive is required to qualify
to do business as a foreign corporation in each such jurisdiction. i5ive is
qualified to do business only in British Columbia, and failure by i5ive to
qualify as a foreign corporation in a jurisdiction where it is required to do
so could subject i5ive to taxes and penalties and could result in the
inability of i5ive to enforce contracts in such jurisdictions. Any such new
legislation or regulation, the application of laws and regulations from
jurisdictions whose laws do not currently apply to i5ive's business, or the
application of existing laws and regulations to the Internet and other online
services could have a material adverse effect on i5ive's business, results of
operations and financial condition.

LIABILITY FOR INFORMATION RETRIEVED FROM THE WEB; ABSENCE OF LIABILITY INSURANCE

Because materials may be downloaded by Members and other users of i5ive's
Web site and subsequently distributed to others, there is a potential that
claims will be made against i5ive for defamation, negligence, copyright or
trademark infringement, personal injury or other theories based on the nature,
content, publication and distribution of such materials. Such claims have been
brought, and sometimes successfully pressed, against OSPs for example, in the
past. i5ive has received inquiries from time to time from third parties
regarding such matters, all of which have been resolved to date without any
payments or other material adverse effect on i5ive. In addition, the increased
attention focused upon liability issues as a result of these lawsuits and
legislative proposals could impact the overall growth of Internet use. i5ive
could also be exposed to liability with respect to the offering of third party
content that may be accessible through i5ive's Web site, or through content and
materials that may be posted by Members on their personal Web sites or chat
rooms, or on-line discussions offered by i5ive. Such claims might include,
among others, that by directly or indirectly hosting the personal Web sites of
third parties, i5ive is liable for copyright or trademark infringement, or other
wrongful actions by such third parties through such Web sites. It is also
possible that if any third party content information provided on i5ive's web
site contains errors, third parties could make claims against i5ive for losses
incurred in reliance on such information. Even to the extent that such claims
do not result in liability to i5ive, i5ive could incur significant costs in
investigating and defending against such claims. The imposition on i5ive of
potential liability for information carried

<PAGE>

on or disseminated through its systems could require i5ive to implement
measures to reduce its exposure to such liability, which may require the
expenditure of substantial resources and limit the attractiveness of i5ive's
services to Members and visitors. i5ive also intends to enter into
agreements with E-Providers partners and sponsors under which i5ive is
intended to be entitled to receive a share of any revenue from the purchase
of goods and services through direct links from i5ive's Web site. Such
arrangements may expose i5ive to additional legal risks and uncertainties,
including potential liabilities to consumers of such products and services by
virtue of i5ive's involvement in providing access to such products or
services, even if i5ive does not itself provide such products or services.
While i5ive's agreements with these parties are intended to provide that
i5ive will be indemnified against such liabilities, there can be no assurance
that such indemnification, if available, will be adequate. Currently, i5ive
does not carry general liability insurance intended to protect i5ive from any
liability arising out of the foregoing. In any event, however, insurance may
not cover all potential claims to which i5ive is exposed or may not be
adequate to indemnify i5ive for all liability that may be imposed. Any
imposition of liability that is not covered by insurance or is in excess of
insurance coverage would have a material adverse effect on i5ive's business,
results of operations and financial condition. In addition, the increased
attention focused upon liability issues as a result of these lawsuits and
legislative proposals could impact the overall growth of Internet use.

SECURITY RISKS

There can be no assurance that experienced programmers or "hackers" may not
from time to time attempt to penetrate i5ive's network security. To date, none
of this activity has occurred. However, in the event any such attempts should
occur and be successful, such a penetration may have a material adverse effect
on i5ive's business, results of operations or financial condition. A party who
is able to penetrate i5ive's network security could misappropriate proprietary
information or cause interruptions in i5ive's Web site. In addition, in
offering certain payment services, i5ive could become increasingly reliant on
encryption and authentication technology licensed from third parties to provide
the security and authentication necessary to effect secure transmission of
confidential information, such as customer credit card numbers. i5ive may be
required to expend significant capital and resources to protect against the
threat of such security, encryption and authentication technology breaches or to
alleviate problems cause by such breaches. Concerns over the security of
Internet transactions and the privacy of users may also inhibit the growth of
the Internet generally, particularly as a means of conducting commercial
transactions. Security breaches or the inadvertent transmission of computer
viruses could expose i5ive to a

<PAGE>

risk of loss or litigation and possible liability. There can be no assurance
that contractual provisions attempting to limit i5ive's liability in such
areas will be successful or enforceable, or that other parties will accept
such contractual provisions as part of i5ive's agreements, which could have a
material adverse effect on i5ive's business, results of operations and
financial condition.

RELIANCE ON INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

i5ive regards its technology as proprietary and attempts to protect it by
relying on trademark, service mark, copyright and trade secret laws and
restrictions on disclosure and transferring title and other methods. i5ive
currently has no patents or patents pending and does not anticipate that patents
will become a significant part of i5ive's intellectual property in the
foreseeable future. i5ive also generally enters into confidentiality or license
agreements with its employees and consultants, and generally controls access to
and distribution of its documentation and other proprietary information.
Despite these precautions, it may be possible for a third party to copy or
otherwise obtain and use i5ive's proprietary information without authorization
or to develop similar technology independently. i5ive pursues the registration
of its trademarks and service marks in the United States and Canada and
internationally, and intends to apply for the registration in the United States
and Canada for a number of its service marks There can be no assurance that
such registration will be granted or, if granted, that i5ive will derive any
material commercial benefit from such registration. Effective trademark,
service mark, copyright and trade secret protection may not be available in
every country in which i5ive's services are distributed or made available
through the Internet, and policing unauthorized use of i5ive's proprietary
information is difficult. Legal standards relating to the validity,
enforceability and scope of protection of certain proprietary rights in
Internet-related businesses are uncertain and still evolving, and no assurance
can be given as to the future viability or value of any proprietary rights of
i5ive or other companies within this market. There can be no assurance that the
steps taken by i5ive will prevent misappropriation or infringement of its
proprietary information. Any such infringement or misappropriation, should it
occur, could have a material adverse effect on i5ive's business, results of
operations and financial condition. In addition, litigation may be necessary in
the future to enforce i5ive's intellectual property rights, to protect i5ive's
trade secrets or to determine the validity and scope of the proprietary rights
of others. Such litigation might result in

<PAGE>

substantial costs and diversion of resources and management attention and
could have a material adverse effect on i5ive's business, results of
operations and financial condition and i5ive may not have available the
resources necessary to pursue such litigation. Furthermore, there can be no
assurance that i5ive's business activities will not infringe upon the
proprietary rights of others, or that other parties will not assert
infringement claims against i5ive. It can be expected that i5ive will be
subjected to claims in the ordinary course of its business, including claims
of alleged infringement of the trademarks, service marks and other
intellectual property rights of third parties by i5ive and the content
generated by its Members. Although such claims have not occurred to date,
such claims and any resultant litigation, should it occur, might subject
i5ive to significant liability for damages and might result in invalidation
of i5ive's proprietary rights and even if not meritorious, could be time
consuming and expensive to defend and could result in the diversion of
management time and attention, any of which might have a material adverse
effect on i5ive's business, results of operations and financial condition.
i5ive currently licenses from third parties certain technologies incorporated
into i5ive's Web site. As i5ive continues to introduce new services that
incorporate new technologies, it may be required to license additional
technology from others. There can be no assurance that these third party
technology licenses will continue to be available to i5ive on commercially
reasonable terms, if at all. The inability of i5ive to obtain any of these
technology licenses could result in delays or reductions in the introduction
of new services or could adversely affect the performance of its existing
services until equivalent technology could be identified, licensed and
integrated.

DEPENDENCE ON CONTINUED GROWTH IN THE USE OF THE INTERNET; DEPENDENCE ON WEB
INFRASTRUCTURE

i5ive's future success is substantially dependent upon continued growth in
the use of the Internet and the Web in order to support e-commerce development
on i5ive's Web site and in the acceptance and volume of e-commerce transactions
on the Internet. There can be no assurance that the number of Internet users
will continue to grow or that e-commerce over the Internet will become more
widespread. As is typical in the case of a new and rapidly evolving industry,
demand and market acceptance for recently introduced services are subject to a
high level of uncertainty. i5ive cannot predict the extent to which consumers
will be willing to shift their purchasing habits from traditional retailers to
online retailers. The Internet may not prove to be a viable commercial
marketplace for a number of reasons, including lack of acceptable security
technologies, lack of access and ease of use, congestion of traffic,
inconsistent quality of service and lack of availability of cost-effective,
high-speed service, potentially

19
<PAGE>

inadequate development of the necessary infrastructure, excessive
governmental regulation, uncertainty regarding intellectual property
ownership or timely development and commercialization of performance
improvements, including high-speed modems. The success of i5ive's Web site
will depend in large part upon the continued development of a Web
infrastructure, such as a reliable network backbone with the necessary speed,
data capacity and security, and timely development of complementary products,
such as high-speed modems for providing reliable Web access and services.
Because global e-commerce and online exchange of information on the Web and
other similar open wide area networks are new and evolving, it is difficult
to predict with any assurance whether the Web will support increasing use or
will prove to be a viable commercial marketplace. The Web has experienced,
and is expected to continue to experience, significant growth in the number
of users and the amount of content. To the extent that the Web continues to
experience increased numbers of users, frequency of use or increased band
width requirements of users, there can be no assurance that the Web
infrastructure will continue to be able to support the demands placed on it
by this continued growth or that the performance or reliability of the Web
will not be adversely affected by this continued growth. In addition, the
Web could lose its viability or effectiveness due to delays and the
development or adoption of new standards and protocols to handle increased
levels of activities or due to increased government regulation. There can be
no assurance that the infrastructure or complementary products or services
necessary to make the Web a viable commercial marketplace will be developed,
or, if they are developed, that the Web will achieve broad acceptance. If
the necessary infrastructure standards, protocols, or complementary products,
services or facilities are not developed, or if the Web does not become a
viable commercial marketplace, i5ive's business, results of operations and
financial condition will be materially and adversely affected. Even if such
infrastructure, standards or protocols or complementary products, services,
or facilities are developed and the Web becomes a viable commercial
marketplace, there can be no assurance that i5ive will not be required to
incur substantial expenditures in order to adapt its services to changing Web
technologies, which could have a material adverse effect on i5ive's business,
results of operations and financial condition.

SALES TAX COLLECTION

One or more states, provinces or countries may seek to impose sales tax
collection obligations on out-of-state or out-of-province or foreign companies
such as i5ive which engage in online commerce. Any new operation or facilities
in the United States or Canada or elsewhere could subject shipments into such
states or provinces to state or provincial or foreign sales taxes. A successful
assertion by one or more states

<PAGE>

or provinces or any foreign country that i5ive should collect sales or other
similar taxes on the sale of merchandise could have a material adverse effect
on i5ive's business, prospects, financial condition and results of
operations.

CONTROL BY DIRECTORS, EXECUTIVE OFFICERS, NORTHFIELD CAPITAL CORPORATION AND
284085 B.C. LTD.

Upon completion of the Transaction, the Company's three Directors and
Northfield Capital Corporation, and their respective affiliates will, in the
aggregate, beneficially own approximately 55.8% of the outstanding Common
Stock. As a result, these stockholders will possess significant influence
over the Company, giving them the ability, among other things, to elect a
majority of the Company's Board of Directors and approve significant
corporate transactions. Such share ownership and control may also have the
effect of delaying or preventing a change in control of the Company, impeding
a merger, consolidation, takeover or other business combination involving the
Company, or discourage a potential acquiror from making a tender offer or
otherwise attempting to obtain control of the Company which could have a
material adverse effect on the market price of the Company's Common Stock.

YEAR 2000 COMPLIANCE

i5ive is aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches. The "Year 2000 Problem"
is pervasive and complex as virtually every computer operation will be affected
in some way by the rollover of the two-digit year value to 00. The issue is
whether computer systems will properly recognize date-sensitive information when
the year changes to 2000. Systems that do not properly recognize such
information could generate erroneous data or fail. i5ive is in the process of
working with its software vendors to ensure that the software that i5ive has
licensed from third parties will operate properly in the year 2000 and beyond.
In addition, i5ive is working with its external suppliers and service providers
to ensure that they and their systems will be able to support i5ive's needs and,
where necessary, inter-operate with i5ive's server and networking hardware and
software infrastructure in preparation for the year 2000. Management does not
anticipate that i5ive will incur significant operating expenses or be required
to invest heavily in computer systems improvements to be year 2000 compliant.
However, significant uncertainty exists concerning the potential costs and
effects associated with any year 2000 compliance. Any year 2000 compliance
problems of either i5ive, its

<PAGE>

customers or vendors would have a material adverse effect on i5ive's
business, results of operations and financial condition.

NO ACTIVE PRIOR PUBLIC MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK
PRICE.

Prior to the closing of the Company's transaction with i5ive, there has
been no active public market for its Common Stock. There can be no assurance
that an active trading market for the Common Stock will develop or be sustained
following the closing of the transaction or that the market price of the Common
Stock will not decline below any price that may develop initially after the
closing of the transaction. The market price may bear no relationship to the
revenues, earnings, assets or potential of the Company or i5ive and may not be
indicative of future business performance of the Company. The trading price of
the Company's Common Stock could be subject to wide fluctuations in response to
variations in the Company's quarterly results of operations, the gain or loss of
significant strategic relationships, unanticipated delays in the development of
the Company, changes in earnings estimates by analysts, announcements of
technological innovations or new solutions by the Company or its competitors,
general conditions in the technology and Internet sectors and in
Internet-related industries, other matters discussed elsewhere in this Current
Report and other events or factors, many of which are beyond the Company's
control. In addition, the stock market in general and the technology and
Internet sectors in particular have experienced extreme price and volume
fluctuations which have affected the market price for many companies in
industries similar or related to that of the Company and which have been
unrelated to the operating performance of these companies. These market
fluctuations, as well as general economic, political and market conditions, may
have a material adverse effect on the market price of the Company's Common
Stock. In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted against such companies. Such litigation, if instituted, and
irrespective of the outcome of such litigation, could result in substantial
costs and a diversion of management's attention and resources and have a
material adverse effect on the Company's business, results of operations and
financial condition.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of significant amounts of Common Stock in the public market after the
Transaction or the perception that such sales will or could occur could
materially and adversely affect the market price of the Common Stock or the
future ability of the

<PAGE>

Company to raise capital through an offering of its equity securities. After
the closing of the Transaction, the Company has 10,061,244 shares of common
stock outstanding. Of such shares, 5,610,340 shares are held by Directors of
the Company and Northfield Capital Corporation, 2,500,000 shares are held by
Benitz & Partners Limited, and 210,262 shares are held by a corporation with
which two of the Company's former directors are affiliated. The 3,405,622
shares held by Northfield Capital Corporation and 284085 B.C. Ltd. are
"restricted securities" as such term is defined in Rule 144 under the
Securities Act. Restricted securities may be sold in the public market only
if registered or if they qualify for an exemption from registration under
Rules 144, 144(k) or 701 promulgated under the Securities Act. The remaining
1,740,642 shares are freely transferable under U.S. Federal securities laws.
The shares held by Benitz & Partners Limited and the corporation affiliated
with the Company's former directors are "restricted securities". The shares
held by Benitz & Partners Limited are saleable pursuant to the provisions of
Rule 144 through December 12, 1999 and thereafter, those shares are freely
saleable pursuant to the provisions of Rule 144(k) under the Securities Act.
The shares held by the corporation affiliated with the Company's former
Directors are freely saleable after 90 days after December 10, 1998 pursuant
to the provisions of Rule 144(k).

The Company intends to file as promptly as practicable, a Form S-8
registration statement under the Securities Act to register all shares of Common
Stock issuable pursuant to outstanding options and all shares of Common Stock
reserved for issuance under the Company's 1998 Stock Incentive Plan. Such
registration statements are expected to become effective immediately upon
filing, and shares covered by those registration statements will thereupon be
eligible for sale in the public markets, subject to Rule 144 limitations
applicable to affiliates. As of December 8, 1998, there were outstanding options
to purchase up to 333,110 shares of Common Stock, of which options to purchase
278,208 shares will become vested and immediately exercisable at a price of
$1.50 per share on December 4, 1999, provided the stockholders of the Company
have approved the adoption of the Plan no later than December 3, 1999. The
remaining options to purchase 54,902 shares vest on December 4, 2000.

<PAGE>

PRICE RANGE OF COMMON STOCK

Through March 27, 1997, the Company's Common Stock was listed on The
Toronto Stock Exchange, at which time it was suspended due to the Company's
financial condition. The shares were subsequently delisted on September 23,
1997 at the Company's request. Subsequent to March 26, 1997, the Company's
Common Stock was not quoted or traded on any organized trading system. The
following represents high and low closing sale prices by quarter as reported by
The Toronto Stock Exchange for each of the calendar quarters of 1996 and the
first calendar quarter of 1997, through March 27, 1997. The following high and
low closing sale prices have been adjusted to reflect a one-for-six reverse
stock split effected on November 25, 1998.

YEAR QUARTER HIGH LOW
(IN CANADIAN DOLLARS)
--------------------------------------------------------
<S> <C> <C> <C>
1996 First $2.04 $1.14
Second $3.00 $1.50
Third $1.68 $1.08
Fourth $1.62 $0.96

1997 First (through $1.80 $1.08
March 26)

</TABLE>

As of December 10, 1998, there were 10,061,244 shares of the
Company's Common Stock issued and outstanding which were owned by approximately
200 holders of record. On that date there were no quoted prices for the
Company's Common Stock on any reorganized securities market.

The Company has never declared or paid any cash dividends on its
capital stock and does not anticipate paying cash dividends in the foreseeable
future, but intends to retain future earnings for reinvestment in its business.
Any future determination to pay cash dividends will be at the discretion of the
Board of Directors.

<PAGE>

CAPITALIZATION

The following table sets forth the cash and cash equivalents and the
capitalization of the Company at September 30, 1998, on a historical basis and
on a pro forma basis giving effect to the Transaction as if it had occurred on
September 30, 1998. The table also gives effect to a working capital loan to
the Company of $65,000 received subsequent to September 30, 1998, which sum was
loaned to i5ive. The historical data should be read in conjunction with the
historical financial statements of the Company contained in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1997 and it Quarterly
Report on Form 10-QSB for the nine months ended September 30, 1998. The pro
forma data has been prepared on the basis described in the Pro Forma Combined
Condensed Financial Statements included elsewhere herein.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
---------------------------------
HISTORICAL PRO FORMA
CASH AND CASH EQUIVALENTS ---------------------------------
- --------------------------------------
<S> <C> <C>

Accounts payable $36,444 $58,234
Loan payable $-0- $65,000
Due to shareholders and affiliated companies (1) $-0- $88,518
TOTAL LIABILITIES $36,444 $211,752

Stockholders' Equity
Common Stock, $.001 par value,
30,000,000 shares authorized;
3,892,831 shares issued and
outstanding on an historical
basis and 10,061,244 shares
issued and outstanding on a
proforma basis (2) (3) $39,934 $40,502
Additional Paid-In Capital $15,895,073 $16,366,347
Accumulated Deficit $(15,970,419) $(16,526,528)
TOTAL STOCKHOLDERS' DEFICIT $(35,412) $(119,679)

TOTAL LIABILITIES AND
STOCKHOLDERS DEFICIT $1,032 $92,073

</TABLE>

<PAGE>
___________________
(1) Subsequent to September 30, 1998 through November 30, 1998 an additional
$32,227 was advanced which remains outstanding.
(2) After reflecting a one-for-six reverse stock split effected November 25,
1998.
(3) Excludes 1,200,000 shares reserved, subject to shareholder approval of
adoption of the Plan, under the Company's 1998 Stock Incentive Plan with respect
to which options to purchase 333,110 shares have been granted exercisable,
commencing December 3, 1999, at $1.50 per share.

<PAGE>

I5IVE'S MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and
results of operations of i5ive should be read in conjunction with, and is
qualified in its entirety by, the more detailed information including i5ive's
Financial Statements and the Notes thereto included elsewhere in this Current
Report. This Current Report contains forward-looking statements that involve
risks and uncertainties. i5ive's actual results may differ materially from the
results discussed in the forward-looking statements. Factors that may cause or
contribute to such differences include those discussed in "Risk Factors," as
well as those discussed elsewhere in this Current Report.

OVERVIEW

i5ive is an Internet company engaged in the creation, operation and
maintenance of a World Wide Web based community, known as Suite101.com, for
Internet users to express themselves, share ideas, interests and expertise, and
publish content accessible to other users with common interests. i5ive's
community includes its visitors and Members who are Internet users and
Contributing Editors who create their own personal Web sites organized topically
into twelve major Communities of Interest. i5ive believes that user affinity to
the Web occurs when users relate personally to their online experience, and the
more users are active in the creation of that experience, the more personal the
experience becomes. By establishing a free service enabling Internet users to
create their own Web sites in Communities of Interest, i5ive further believes
that the users will in turn write about their experiences and offer their
knowledge to other Internet users as a means to find the best content and
information on the Internet - quickly and easily. These Communities of Interest
provide the context and tools for Web users to publish content, to communicate
with other users, and to access a centralized and easy-to-navigate destination
for the Best of the Web content. This process enhances the Member's experience
by allowing them to express themselves, share ideas, interests and expertise and
to publish content accessible to other Members and visitors with common
interests.

i5ive was incorporated in April 1996. From inception through September
30,1998, i5ive had revenues of $30,293 and its operating activities related
primarily to the development of the necessary computer infrastructure,
recruiting personnel, raising capital and initial planning and development of
the i5ive site and operations.

<PAGE>

i5ive intends to realize revenue by sharing in the proceeds of
e-commerce transactions. The marketing effort is expected to be a
collaborative effort: i5ive, its Members and its E-Providers. i5ive's
marketing plan is founded on the Member's consent, i5ive's role as custodian
of the Members privacy and the E-Provider's commitment to deliver
competitive, quality goods and services on time. i5ive currently intends to
limit its involvement to facilitating the introduction of the buyer to the
seller, the seller to the buyer. As custodian of the Members demographics,
psychographics and the Member's annual "Wish" list, i5ive will offer its
E-Providers a unique opportunity to market one-to-one to a very loyal and
focused community. Unlike traditional marketing campaigns, which typically
use print (newspapers, magazines and direct mail) or the electronic media
(radio and television), i5ive's campaigns will direct marketing material to
the Member's "Home Page" or personal Web site, significantly reducing the
cost of reaching the consumer. The interactive nature of the Web and the
ability to display attractive graphics and to facilitate Members "clicking"
through directly to the E-Providers site, will enable i5ive to present such
offerings 24 hours a day 7 days a week in a complete, dynamic and timely
manner. The Internet's interactive properties and i5ive's dynamic software
are believed by management to be compelling reasons why consenting Members
and E-Providers will utilize i5ive's marketing program. Products and services
can be marketed and the transaction can be completed on the Web-site quickly
and easily. This capability offers i5ive's Members electronic
one-stop-shopping and i5ive's E-Providers one-to-one contact with the
consumer, i5ive's Member.

As i5ive grows, its operating expenses will increase in connection with its
visitor and Member generation, brand marketing and E-Providers promotional
efforts, its increased funding of site development, technology and operating
infrastructure, and the increased general and administrative staff needed to
support i5ive's growth. i5ive anticipates that it will incur net losses for the
foreseeable future. The extent of these losses will be contingent, in part, on
the amount and rates of growth in i5ive's net revenue from electronic commerce
(e-commerce) and advertising. i5ive expects its operating expenses to increase
significantly, especially in the areas of sales and marketing and brand
promotion. i5ive believes that period-to-period comparisons of its Member
recruitment results are not meaningful and that the results for any period
should not be relied upon as an indication of future performance. There can be
no assurance that i5ive's operating losses will not increase in the future or
that i5ive will ever achieve or sustain profitability. See "Risk
Factors--Limited Operating History; Anticipated Losses; No Assurance Of
Profitability."

<PAGE>

To date, i5ive has entered into a limited number of license arrangements
and strategic alliances in order to build its communities, provide
community-specific content, generate additional traffic, and increase
membership.

The Company intends to continue to increase reach and membership and to
seek additional strategic alliances with content and distribution partners,
including alliances that create co-branded sites through which i5ive markets its
services.

STATEMENTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

During the nine months ended September 30, 1998, i5ive's total revenues
were $20,693 compared with total revenues of $8,233 during the corresponding
period in 1997. The increase was primarily attributable to an increase of
$13,364 in software licensing revenues in 1998.

Expenses increased during the nine months ended September 30, 1998 to
$237,795 from $179,100 during the nine months ended September 30, 1997. The
increase was the result of an increase of $58,143 in selling, general and
administrative expenses resulting from increased Contributing Editor
recruitment. I5ive pays each of its Contributing Editors between $10 and $25
per month.

The net loss for the nine months ended September 30, 1998 was $217,102
compared with a net loss of $170,867 during the 1997 period.

YEAR ENDED DECEMBER 31, 1997 AND 1996

During the year ended December 31, 1997, i5ive's total revenues were
$10,374 compared with total revenues of $4,796 during the year ended December
31, 1996. The increase was primarily attributable to an increase of $3,324 in
software licensing revenues in 1998 and an increase of $1,475 in non-contract
service revenues.

Expenses increased during the year ended December 31, 1997 to $258,255 from
$140,479 during the year ended December 31, 1996. The increase was the result
of an increase in payment of wages and benefits, payments to editors and other
expenses resulting from increased Contributing Editor recruitment.
The net loss for the year ended December 31, 1997 was $247,881 compared
with a net loss of $135,683 during 1997.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The report of i5ive's independent auditors on their audit of i5ive's
financial statements as of December 31, 1997 contains an explanatory paragraph
that describes the uncertainty as to the ability of i5ive to continue as a going
concern due to i5ive's lack of sufficient cash to meet its projected operating
needs for the next 12 months. At present, the Company does not currently have
available to it the funds necessary to meet i5ive's anticipated capital needs.
However, the Company currently anticipates that the net proceeds of
approximately $3.0 million from a proposed private placement of its securities
intended to be completed during the first quarter of 1999 together with
available funds, will be sufficient to meet its anticipated needs for working
capital and capital expenditures for at least the next 12 months. The Company
may need to raise additional funds in order to fund more aggressive promotions
and more rapid expansion, to develop newer or enhanced services, to respond to
competitive pressures or to acquire complementary businesses, technologies or
services. There can be no assurance that any additional financing, including
the funds intended to be raised in the private placement, will be available on
terms favorable to the Company, or at all. If adequate funds are not available
or not available on acceptable terms, the Company may not be able to fund its
expansion, promote its e-commerce as the Company desires, or, develop or enhance
services or respond to competitive pressures. Any such inability could have a
material adverse effect on the Company's business, results of operations and
financial condition. Additional funds raised through the issuance of equity or
convertible debt securities, will result in reducing the percentage ownership of
the stockholders of the Company and, stockholders may experience additional
dilution and such securities may have rights, preferences or privileges senior
to those of the rights of the Company's Common Stock.

As a result of i5ive's limited operating history, i5ive has limited
meaningful historical financial data upon which to base planned operating
expenses. Accordingly, i5ive's anticipated expense levels in the future are
based in part on its expectations as to future revenue from proposed e-commerce
revenue-sharing arrangements, and anticipated growth in visitor traffic and
membership and will become, to a large extent, fixed. Revenues and operating
results generally will depend on the volume of, timing of and ability to
complete transactions, which are difficult to forecast. In addition, there can
be no assurance that i5ive will be able to accurately predict its net revenue,
particularly in light of the intense competition for the sale of products and
services on the Web, revenue-sharing opportunities, i5ive's limited operating
history and the uncertainty as to the broad acceptance of the Web as an
e-commerce medium. i5ive may be unable to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall

<PAGE>

or other unanticipated changes in the e-commerce industry. Any failure by
i5ive to accurately make such predictions would have a material adverse
effect on i5ive's business, results of operations and financial condition.

The Company may need to raise additional funds in the future in order to
fund its anticipated expense levels, more aggressive promotions and more rapid
expansion, to develop newer or enhanced services, to respond to competitive
pressures or to acquire complementary technologies or services. If additional
funds are raised through the issuance of equity or convertible debt securities,
the percentage ownership of the stockholders of the Company will be reduced,
stockholders may experience additional dilution and such securities may have
rights, preferences or privileges senior to those of the rights of the Company's
Common Stock. There can be no assurance that additional financing will be
available on terms favorable to the Company, or at all. If adequate funds are
not available or not available on acceptable terms, the Company may not be able
to fund its expansion, promote itself as the Company desires, take advantage of
unanticipated acquisition opportunities, develop or enhance services or respond
to competitive pressures. Any such inability could have a material adverse
effect on the Company's business, results of operations and financial condition.

From its inception in April 1996 through June 30, 1998 Northfield Capital
Corporation and 284085 B.C. Ltd. advanced to i5ive the sums of $270,156 and
$197,098 used for general corporate purposes and working capital. Such amounts
accrued interest at the rate of 6.5% per annum. At the closing of the sale of
the i5ive shares to the Company, Northfield Capital Corporation and 284085 B.C.
Ltd. converted these advances and accrued interest into an aggregate of 414,975
and 302,753 shares, respectively, of i5ive. Such shares of i5ive were exchanged
for 1,969,057 and 1,436,565 shares, respectively, of the Company's Common Stock
or an effective purchase price, based on the amounts advanced by such persons
through June 30, 1998, of approximately $0.14 per share of the Company's Common
Stock.

Subsequent to June 30, 1998, Northfield Capital Corporation and 284085 B.C.
Ltd advanced or incurred additional liabilities on behalf of i5ive aggregating
$92,721 through November 30, 1998. Such amounts are intended to be repaid out
of the proposed private sale of the Company's securities intended to be
completed in the first quarter of 1999.

<PAGE>

BUSINESS OF I5IVE

i5ive's objective is to be a major Member-content created online community
for people on the Web. i5ive's strategies to achieve this objective include:

FOCUS ON MEMBERSHIP GROWTH AND AFFINITY. i5ive intends to seek to increase
the number of its Members and concentrate on Member affinity to become a leading
community of personal Web sites. i5ive intends to seek to grow its Membership
base by: (i) continuing to attract an increasing amount of visitor traffic to
Suite101.com through its free Best of Web guide service. The Suite101.com Best
of Web guide facilitates and attracts a constant flow of new Internet visitors
to the Web site. This, in turn, i5ive believes, will generate membership
growth; (ii) introducing additional classes of Memberships that appeal to a
broader range of Internet users; (iii) offering easier-to-use Web page
publishing tools allowing Members to easily create and enhance personal Web
sites; (iv) promoting its site as a destination point on the Web by seeking to
establish distribution alliances with strategic partners; and (v) launching
brand name promotional campaigns to drive both growth in Membership and traffic
to its Members' personal Web sites. In addition, i5ive intends to introduce
more valued-added Member services and strengthen and expand the number of
affinity programs offered by i5ive. i5ive believes that its focus on the needs
of its Members and enhancing their experience within the Suite 101.com community
will produce continued growth in, and foster loyalty among its Membership base.
i5ive believes that a large and growing base of committed Members organized on a
contextual basis provides potential E-Providers with an attractive market to
target promotion of their products and services, thereby creating marketing and
e-commerce revenue opportunities for i5ive.

BUILD THE SUITE101.COM IDENTITY. Historically, i5ive's growth has been
primarily by word of mouth and the informal promotional efforts of its Members.
i5ive currently intends to promote awareness of the Suite101.com identity
through a variety of means, which may include traditional media, including
print, radio, billboard and television. In addition, i5ive intends to pursue a
variety of distribution arrangements to increase its reach on the Internet and
introduce a number of Suite101.com identity awareness programs on its Web site
to leverage its Membership base and visitor traffic. i5ive believes that a well
recognized Suite101.com identity will be attractive to potential E-Providers.

CONTINUE TO ENHANCE SITE FUNCTIONALITY AND PERFORMANCE. i5ive believes
continually providing Members and visitors with greater functionality and
performance is

<PAGE>

critical to its continued leadership. i5ive introduced a new user
interface in November 1998, which offers substantially improved presentation
of Member-generated content in an intuitive topical format and has been well
received by i5ive's Members and visitors. I5ive also intends, as funds are
available, to continue to upgrade and expand its server and networking
infrastructure, improving its ability to provide fast and reliable access.
i5ive will also continue to provide its Members with enhanced Web page
publishing and communication tools to enhance the community experience.
i5ive believes that continually enhancing site functionality and performance
foster Member and visitor growth and affinity to the community, thereby
providing i5ive with an attractive platform for e-commerce.

ESTABLISH NEW STRATEGIC ALLIANCES. i5ive intends to seek to establish
strategic relationships intended to increase traffic and Memberships of both
partners.

BUILD MULTIPLE E-COMMERCE STREAMS. i5ive believes that its Web community
will offer a scalable business platform from which i5ive plans to generate
revenue from multiple e-commerce sources. i5ive intends to achieve its revenue
objectives by: (i) obtaining marketing revenues through expansion of its Member
base, being able to target its marketing efforts to demographically distinct
groups, increasing its page views, establishing and investing in improving ad
serving and ad targeting technology; (ii) develop revenue-sharing E-Provider
relationships with third-party content providers, and; (iii) provide a means for
small and home business owners to leverage the reach of the Internet through an
e-commercial presence within i5ive's community.

MEMBERSHIP ON SUITE101.COM. Suite101.com offers Members a diverse range of
communities with whom to interact. i5ive also promotes active Member
participation through its Member-focused editorial philosophy - Web pages
created and maintained by contributing their talents and ideas, meeting and
interacting with others with similar interests and creating their own "home on
the Web." Supporting the editorial efforts of its Members are approximately 450
Contributing Editors. As well as being involved in Suite101.com's community
organization, content management and community interaction, Contributing Editors
endeavor to lead Suite101.com Members and the Internet community at large to the
best content on the Internet by writing weekly/bi-weekly/monthly articles,
maintaining a Best of Web list (links to topic related information on the
Internet) and hosting topical discussions in their subject area. i5ive provides
links to the Suite101.com Best of the Web Guidepowerful Web page publishing
tools, Member support, high-speed, high-quality site performance and chat and
on-line discussion services, all free of charge. i5ive emphasizes a sense of
responsibility among community Members by leveraging the characteristics of the
Web that users find most attractive - connection, expression, communication,
entertainment and utility.

<PAGE>

HOW MEMBERS JOIN. Suite101.com's 12 Communities of Interest are based on
familiar themes and provide Web users with a place to connect on the Internet.
Each Member is able to participate in the community that most closely matches
his or her interests. For example, Purebred Dogs, California Gardening or
Children's Health. To join Suite 101.com, Members fill out an application and
commence interacting or publishing content on the site. Members agree to abide
by the community guidelines and Terms of Involvement.

PARTICIPATING IN THE SUITE 101.COM COMMUNITY. After joining, Members are
encouraged to become active in the community. Members can interact with
visitors and other Members, support community building initiatives, and
participate in discussions and chat sessions. i5ive believes that Member
participation is the key to a successful online community. Furthermore, i5ive
believes that Member participation is directly related to community loyalty
which in turn, i5ive believes, will facilitate a greater quantity and higher
quality of Member generated content. Members seeking greater involvement apply
to become Contributing Editors. Contributing Editors are Internet guides who
have a passion for a particular topic and want to share their enthusiasm and
knowledge with other Suite101.com Members and the Internet community at large by
writing weekly/bi-weekly/monthly articles, maintaining a Best of Web list (links
to topic related information on the Internet) and hosting topical discussions in
their subject area. In addition, Contributing Editors coordinate community
activities, interface with i5ive's in-house editorial staff and work to foster
core community values. Managing Editors manage their respective Contributing
Editor teams, recruit new Contributing Editors and support their communities.
i5ive intends to introduce additional community leadership positions in the
future to increase levels of community participation.

HOW TO SURF THE SUITE101.COM COMMUNITY. i5ive believes that it provides
users surfing the Web with a comprehensive, high-quality concentration of
personal Web sites on the Internet. i5ive strives to improve its site for
such users by upgrading the look and feel of its Web site to provide easier
navigation of and to direct greater levels of traffic to Members' Web sites.
In November 1998, i5ive introduced its new user interface designed to be
easier to use and highly intuitive. The new user interface presents the
Suite101.com Web site to visitors in a topical format to facilitate the
aggregation of categories. This format allows easier and more intuitive
access to contact on the Suite101.com Web site and enhances the integration
of Members' content with i5ive's chat, and on-line services.

INFRASTRUCTURE AND OPERATIONS

<PAGE>

i5ive has developed a software system that is built on Microsoft Internet
Information Server, Allaire's Cold Fusion Application Server and Microsoft SQL
Server and is designed to be reliable and responsive. i5ive's architecture is
designed to scale across multiple application servers to handle a continually
growing load. i5ive provides its editors and visitors with a robust content
platform that can support a virtually unlimited number of pages.

i5ive provides an efficient, responsive user experience through
network servers housed in Vancouver, British Columbia. Member-generated content
is stored in a SQL Server database that is backed up daily with a weekly backup
taken off site weekly. i5ive will continue to upgrade and expand its server and
networking infrastructure in an effort to improve its fast and reliable access
to i5ive's community web site.

Site connectivity to the Internet is provided via a shared T-1 provided on
a 24-hour per day, seven days per week basis by Pro.Net Communications inc. Any
interruption in the service that Pro.Net receives from other providers, or any
failure of Pro.Net to handle higher volumes of Internet users to the
Suite101.com site could have a material adverse effect on i5ive's business,
results of operations and financial condition.

E-COMMERCE AND ADVERTISING

The growing adoption of the Web represents a significant opportunity for
businesses to conduct commerce over the Internet. According to IDC, transactions
on the Internet are expected to increase from approximately $12 billion in 1997
to approximately $426 billion in 2002, with the number of users that are buyers
of products and services rising from 26% to 40% in the same period. One factor
in this projected growth is the increasing variety of transactions that take
place on the Web. Initially, companies focused on facilitating Internet
transactions between businesses. More recently, however, a number of companies
have targeted business-to-consumer transactions. These companies typically use
the Internet to offer standard products and services that can be easily
described with graphics and text and that do not necessarily require a physical
presence for purchase, such as software, books, music CDs, videocassettes, home
loans, airline tickets and online banking and stock trading. The Internet allows
these companies to develop one-to-one relationships with customers worldwide
without making significant investments in traditional infrastructure such as
retail outlets, distribution networks and sales personnel.

<PAGE>

Growth in the Web has also created an important new advertising channel.
Tools not available in traditional advertising media, such as real-time
measurement of "click through" on advertising banners, further increase the
attractiveness of Web advertising by giving advertisers real-time feedback on
campaigns. Jupiter Communications projects that the dollar value of advertising
on the Web is expected to increase from approximately $940 million in 1997 to
approximately $7.7 billion in 2002. To date, businesses and advertisers have
typically used traditional navigational sites and professionally-created content
sites for the sale and marketing of their products and services online. In
addition, online community sites provide more detailed demographic data and
self-selected groups of consumers with an affinity for particular products.
Advertisers can thus more easily deliver targeted messages in cost-effective
manner.

THE GROWTH OF ONLINE COMMUNITIES

Traditional use of the Web has consisted largely of one-way communications
in which users "surf" and view different Web sites containing professionally
created content on topics of general interest such as news, sports and weather.
Internet search engines and navigational sites serve a valuable function for
users seeking to browse the Internet and locate Web sites of interest. However,
these services are not primarily focused on providing a platform for publishing
and aggregating the rapidly increasing volume of personalized content created by
users or enabling such users to interact with each other.

In particular, users who publish Web sites have had limited means of
attracting visitors to their sites or interacting with such visitors, and, as a
result, there is a growing demand for online community sites where users can
publish content and engage in community activities. According to statistics,
online community sites have recently been one of the fastest growing sectors of
the Web. Statistics published by Media Metrix indicate that the combined reach
of the four leading Web communities increased from 32% to 62% from May 1997 to
July 1998. Additionally, Web users are increasingly seeking access to unique,
personalized content and interaction with others who share similar interests.
Online communities provide a medium for such access and interaction.

THE I5IVE SOLUTION

<PAGE>

i5ive plans on using the unique characteristics of the Web to
cost-effectively market products and services to its member base. By offering
its Members a variety of compelling free services, a focused Communities of
Interest and a share in the sale of the i5ive's demographic profile, the Company
believes it will acquire and maintain a substantial Membership base of
demographically distinct groups. i5ive believes it has developed an innovative
online sales channel with low customer acquisition and marketing costs.

The generation of e-commerce revenues, to be shared by i5ive, its Members
and its E-Providers is to be a collaborative one-to-one marketing effort.
i5ive's marketing plan is founded on the Members consent, i5ive's role as
custodian of the Members privacy and the E-Provider's commitment to deliver
competitive, quality goods and services on time. i5ive currently intends to
limit its involvement to facilitating the introduction of the buyer to the
seller, the seller to the buyer. As custodian of the Members demographics,
physchographics and the individual Member's annual "Wish" list, i5ive will offer
its E-Providers a unique opportunity to market one-to-one to a very loyal and
focused community. Unlike traditional marketing campaigns, which typically use
print (newspapers, magazines and direct mail) or electronic broadcasting (radio
and television), i5ive's campaigns will use the Member's Personal Home Page or
Web site to communicate marketing material, significantly reducing the cost of
reaching the consumer. The interactive nature of the Web and the ability to
display attractive graphics and to facilitate Members "clicking" through
directly to the E-Providers site, will enable i5ive to present such offerings 24
hours a day 7 days a week in a complete, dynamic and timely manner. The
Internet's interactive properties and i5ive's dynamic software are believed by
management to be compelling reasons why consenting Members and E-Providers will
utilize i5ive's marketing program. Products and services can be marketed and the
transaction can be completed on the site quickly and easily. This capability
offers our Members electronic one-stop-shopping and our E-Providers one-to-one
contact with the consumer, our Member.

EMPLOYEES

As of November 30, 1998, i5ive had six full time employees, including five
in operations and development and one in administration. i5ive's future success
will depend, in part, on its ability to attract, retain and motivate highly
qualified technical and management personnel, for whom competition is intense.
i5ive's employees are not covered by any collective bargaining agreement, and
i5ive has never experienced a work stoppage. i5ive believes its relationship
with its employees is good.

<PAGE>

FACILITIES

i5ive's executive offices and computer operations are currently located in
Vancouver, British Columbia, Canada in approximately 1,046 square feet of office
space. The premises are occupied pursuant to a monthly lease with a
non-affiliated person providing for an annual rental of $14,571. Management of
i5ive considers these premises adequate for its existing operations.

<PAGE>

MANAGEMENT OF I5IVE

The directors and Executive Officers of i5ive and their ages are as
follows:

<TABLE>
<CAPTION>
NAME AGE EMPLOYMENT HISTORY
- -------------------- ------ ------------------------------------------------------------------------------------
<S> <C> <C>
Peter L. Bradshaw 64 Mr. Bradshaw, a co-founder of i5ive, has been the Chairman of the Board, chief
executive officer and a Director of i5ive since April 1996. From April 1993 to
April 1996, he was a Director of Mobile Data Solutions, Inc. ("MDSI"), including
Chairman of the Board from April 1993 to December 1995. MDSI develops and markets
computer aided mobile (wireless) resource management software. Its shares of
common stock are traded on the Nasdaq SmallCap Market. From May 1998 to August
1998, he was Chief Executive Officer and from July 1997 to the present, he has
been Chairman of the Board of eDispatch.com Wireless Data, Inc )formerly IStep
Mobile Communications, Inc.) ("eDispatch.com"), which also develops and market
computer aided mobile (wireless) resource management software. The shares of
common stock of eDispatch.com are listed on the Vancouver Stock Exchange.
Commencing in September 1996 through January 1998, he was Director of Unitec
International Controls Corp. Commencing in 1992 through December 1995, he was
Chairman of the Board and Chief Executive Officer of TeleSoft Mobile Data, Inc., a
venture capital Firm investing in enterprises utilizing wireless data protocol.
Mr. Bradshaw has a B.Com. Degree in Commerce and a major in History from the
University of British Columbia. Mr. Bradshaw is the father of Julie M. Bradshaw.
</TABLE>
39
<PAGE>

<TABLE>
<CAPTION>
NAME AGE EMPLOYMENT HISTORY
- -------------------- ------ ------------------------------------------------------------------------------------
<S> <C> <C>
Julie M. Bradshaw 35 Ms. Bradshaw, a co-founder of i5ive, has been a Director of i5ive since April 1996
and is currently the Managing Director of Real World Relations. Prior thereto she
attended the University of Paris, Sorbonne and the University of British Columbia.
In 1992, Ms. Bradshaw earned her B.A. degree from the University of British
Columbia with a major in French Literature. Ms. Bradshaw is the daughter of Peter
L. Bradshaw.

Sunny H. Hirai 26 Mr. Hirai, a co-founder of i5ive, has been a Director and the Chief Technical
Officer of i5ive since April 1996. Prior thereto, he was, from June 1993 to April
1996, the owner of Salt and Pepper Graphix, a graphic design group, and from June
1994 to April 1995 he was the head of marketing at Artel Educational Resources.
From June 1993 to June 1994, he was engaged in marketing with Sunny Marketing,
Inc., a seafood brokerage firm. Mr. Hirai is a graduate from the British Columbia
Institute of Technology, specializing in Small Business: Marketing Management.
</TABLE>

Each of Mr. Bradshaw, Ms. Bradshaw and Mr. Hirai will serve as Directors
of the Company until its annual meeting of stockholders in 1999 and the
election and qualification of his or her successor.

40
<PAGE>

COMPENSATION OF I5IVE MANAGEMENT

The following sets forth certain information concerning the current compensation
of i5ive's Chief Executive Officer and each of the other executive officers of
i5ive's (collectively, the "Named Executive Officers").

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Current
Annual Compensation
Name and Principal Position Salary Bonus Options
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Peter L. Bradshaw
Chairman of the Board $-0- $-0- -0-
- -----------------------------------------------------------------------------
Julie M. Bradshaw
Director of Real World Relations $-0- $-0- -0-
- -----------------------------------------------------------------------------
Sunny Hirai
Chief Technical Officer $27,344 $-0- -0-
- -----------------------------------------------------------------------------

- -----------------------------------------------------------------------------
</TABLE>

It is intended that the Company will enter into Employment Agreements
with each of Mr. Bradshaw, Ms. Bradshaw and Mr. Hirai. Such Employment
Agreements will each have terms of two years, subject to automatic renewal
thereafter, unless terminated by either party, for additional terms of one
year. The agreements will provide for base salaries of $120,000, $75,000 and
$75,000 respectively, subject to increase, plus an annual bonus as may be
determined by the Company's Board of Directors. In addition, such persons
are intended to be granted options upon execution of the agreements to
purchase 100,000, 50,000 and 50,000 shares, respectively, under the Company's
1998 Option Incentive Plan, with provision for the grant of additional
options thereafter during the term of the agreements. Each person will also
be entitled to participate in all health, retirement and other benefit plans
made available by the Company to its officers or employees. The agreements
will contain confidentiality provisions prohibiting the employee from
disclosing at any time any confidential information regarding the Company and
restricting such persons from engaging in activities in competition with the
Company for the terms of their employment and for a period of two years
thereafter. The agreements will further provide that intellectual property
conceived by the employee during the term of employment and relating to the
business of the Company remains the exclusive property of the Company. The
agreements will provide that if the employment of such person is terminated
by death, disability or voluntary resignation, the employee is entitled to
severance equal to 18 months salary, bonus and benefits, and if employment is
terminated by the Company

41
<PAGE>

without cause, the terminated individual will be entitled to severance equal
to salary, bonus and benefits for the balance of the contract term or three
years, whichever is longer.

THE COMPANY'S 1998 STOCK INCENTIVE PLAN

In December 1998, the Company adopted the 1998 Stock Incentive Plan (the
"Plan"). The Plan was adopted by the Board of Directors of the Company and is
subject to approval by the stockholders of the Company within twelve months
of the date the Board of Directors adopted the Plan. All options currently
outstanding under the Plan are conditioned upon the plan receiving such
approval. Under the Plan, 1,200,000 shares of Common Stock have been reserved
for issuance on exercise of options granted under the Plan. In no event,
however, may any one participant in the Plan receive option grants,
separately exercisable stock appreciation rights or direct stock issuances
for more than 150,000 shares of Common Stock in the aggregate per calendar
year.

On the date of the closing of the Transaction with i5ive, outstanding
options granted under i5ive's 1998 Stock Incentive Plan were assumed by the
Company under the Plan and no further option grants will be made under
i5ive's Plan. The assumed options have substantially the same terms, subject
to anti-dilution adjustment, as will be in effect for grants made under the
Company's Plan.

The Plan is divided into five separate components: (i) the Discretionary
Option Grant Program under which eligible individuals in the Company's employ
or service (including officers and consultants) may, at the discretion of the
Plan Administrator, be granted options to purchase shares of Common Stock at
an exercise price equal to not less than the fair market value of the Common
Stock on the date of grant, (ii) the Stock Issuance Program under which such
individuals may, in the Plan Administrator's discretion, be issued shares of
Common Stock directly, through the purchase of such shares at a price not
less than their fair market value at the time of issuance or as a bonus tied
to the performance of services, (iii) the Salary Investment Option Grant
Program which may, in the Plan Administrator's sole discretion, be activated
for one or more calendar years and, if so activated, will allow executive
officers and other highly compensated employees the opportunity to apply a
portion of their base salary to the acquisition of special below-market stock
option grants, (iv) the Automatic Option Grant Program under which option
grants will automatically be made at periodic intervals to eligible,
non-employee members of the Board of Directors to purchase shares of Common
Stock at an exercise price equal to their fair market value on the grant date

42
<PAGE>

and (v) the Director Fee Option Grant Program which may, in the Plan
Administrator's sole discretion, be activated for one or more calendar years
and, if so activated, will allow non-employee Board members the opportunity
to apply a portion of any annual retainer fee otherwise payable to them in
cash each year to the acquisition of special below-market option grants.

The Discretionary Option Grant Program and the Stock Issuance Program
initially will be administered by the Board of Directors. The Board of
Directors, as Plan Administrator, will have the discretion to determine which
eligible individuals are to receive option grants or stock issuances under
those programs, the time or times when such option grants or stock issuances
are to be made, the number of shares subject to each such grant or issuance,
the status of any granted option as either an incentive stock option or a
non-statutory stock option under the federal tax laws, the vesting schedule
to be in effect for the option grant or stock issuance and the maximum term
for which any granted option is to remain outstanding. The Board of Directors
will also have the authority to select the executive officers and other
highly compensated employees who may participate in the Salary Investment
Option Grant Program in the event that program is activated for one or more
calendar years, but the Board of Directors will not exercise any
administrative discretion with respect to option grants made under the Salary
Investment Option Grant Program or under the Automatic Option Grant Program
or Director Fee Option Grant Program for the non-employee Board members. All
grants under those three latter programs will be made in strict compliance
with the express provisions of each such program.

The exercise price for the shares of Common Stock subject to option
grants made under the Plan may be paid in cash or in shares of Common Stock
valued at fair market value on the exercise date. The option may also be
exercised through a same-day sale program without any cash outlay by the
optionee. In addition, the Plan Administrator may provide financial
assistance to one or more optionees in the exercise of their outstanding
options or the purchase of their unvested shares by allowing such individuals
to deliver a full-recourse, interest-bearing promissory note in payment of
the exercise price and any associated withholding taxes incurred in
connection with such exercise or purchase.

Stock appreciation rights are authorized for issuance under the
Discretionary Option Grant Program which provide the holders with the
election to surrender their outstanding options for an appreciation
distribution from the Company equal to the excess of (i) the fair market
value of the vested shares of Common Stock subject to the surrendered option
over (ii) the aggregate exercise price payable for such shares. Such
appreciation distribution may be made in cash or in shares of Common Stock.
None of

43
<PAGE>

the incorporated options from the Predecessor Plan contain any stock
appreciation rights.

In the event that the Company is acquired by merger or sale of
substantially all of its assets or securities possessing more than 50% of the
total combined voting power of the Company's outstanding securities, each
outstanding option under the Discretionary Option Grant Program which is not
to be assumed by the successor corporation or otherwise continued in effect
will automatically accelerate in full, and all unvested shares under the
Discretionary Option Grant and Stock Issuance Programs will immediately vest,
except to the extent the Company's repurchase rights with respect to those
shares are assigned to the successor corporation or otherwise continued in
effect. The Plan Administrator will have complete discretion to grant one or
more options under the Discretionary Option Grant Program which will become
exercisable on an accelerated basis for all of the option shares upon (i) an
acquisition or other change in control of the Company, whether or not those
options are assumed or continued in effect, or (ii) the termination of the
optionee's service within a designated period (not to exceed 18 months)
following an acquisition or other change in control in which those options
are assumed or continued in effect. The vesting of outstanding shares under
the Stock Issuance Program may be accelerated upon similar terms and
conditions. The Plan Administrator is also authorized under the Discretionary
Option Grant and Stock Issuance Programs to grant options and to structure
repurchase rights so that the shares subject to those options or repurchase
rights will immediately vest in connection with a change in the majority of
the Board of Directors of the Company by reason of one or more contested
elections for Board membership, with such vesting to occur either at the time
of such change in control or upon the subsequent termination of the
individual's service within a designated period following such change in
control.

In the event the Plan Administrator elects to activate the Salary
Investment Option Grant Program for one or more calendar years, each
executive officer and other highly compensated employees of the Company
selected for participation may elect, prior to the start of the calendar
year, to reduce his or her base salary for that calendar year by a specified
dollar amount not less than $12,000 nor more than $60,000. If such election
is approved by the Plan Administrator, the individual will automatically be
granted, on the first trading day in January of the calendar year for which
that salary reduction is to be in effect, a non-statutory option to purchase
that number of shares of Common Stock determined by dividing the salary
reduction amount by two-thirds of the fair market value per share of Common
Stock on the grant date. The option will be exercisable at a price per share
equal to one-third of the fair market value of the option shares on the grant
date. As a result, the total spread on the option shares at the time of grant
(the fair market value of the option shares on the grant date less the
aggregate

44
<PAGE>

exercise price payable for those shares) will be equal to the amount of
salary invested in that option. The option will become exercisable for the
option shares in a series of 12 equal monthly installments over the calendar
year for which the salary reduction is to be in effect and will be subject to
full and immediate vesting upon certain changes in the ownership or control
of the Company.

Under the Automatic Option Grant Program, each individual who first
becomes a non-employee Board member at any time after the January 1, 1999,
whether by appointment by the Board of Directors or election of the
stockholders, will automatically receive an option grant for 50,000 shares as
of the date such individual joins the Board, provided such individual has not
been in the prior employ of the Company. In addition, on the date of each
Annual Stockholders Meeting of the Company held after the Plan Effective
Date, each non-employee Board member who is to continue to serve as a
non-employee Board member will automatically be granted an option to purchase
5,000 shares of Common Stock, provided such individual has served on the
Board for at least six months. Each automatic grant for the non-employee
Board members will have a term of 5 years, subject to earlier termination
following the optionee's cessation of Board service. Each automatic option
will be immediately exercisable for all of the option shares; however, any
unvested shares purchased under the option will be subject to repurchase by
the Company, at the exercise price paid per share, should the optionee cease
Board service prior to vesting in those shares. The shares subject to each
initial 51,000-share automatic option grant will vest over a three-year
period in successive equal annual installments upon the individual's
completion of each year of Board service measured from the option grant date.
Each 5,000-share automatic option grant will vest upon the individual's
completion of one year of Board service measured from the option grant date.
However, the shares subject to each automatic grant will immediately vest in
full upon certain changes in control or ownership of the Company or upon the
optionee's death or disability while a Board member.

Should the Director Fee Option Grant Program be activated in the
future, each non-employee Board member will have the opportunity to apply all
or a portion of any annual retainer fee otherwise payable in cash to the
acquisition of a below-market option grant. The option grant will
automatically be made on the first trading day in January in the year for
which the retainer fee would otherwise be payable in cash. The option will
have an exercise price per share equal to one-third of the fair market value
of the option shares on the grant date, and the number of shares subject to
the option will be determined by dividing the amount of the retainer fee
applied to the program by two-thirds of the fair market value per share of
Common Stock on the grant date. As a result, the total spread on the option
(the fair market value of the option shares on the grant date less the
aggregate exercise price payable for those shares) will be equal to

45
<PAGE>

the portion of the retainer fee invested in that option. The option will
become exercisable for the option shares in a series of 12 equal monthly
installments over the calendar year for which the election is to be in
effect. However, the option will become immediately exercisable for all the
option shares upon (i) certain changes in the ownership or control of the
Company or (ii) the death or disability of the optionee while serving as a
Board member.

The shares subject to each option under the Salary Investment Option
Grant and Automatic Option Grant and Director Fee Option Grant Programs will
immediately vest upon (i) an acquisition of the Company by merger or asset
sale, (ii) the successful completion of a tender offer for more than 50% of
the Company's outstanding voting stock or (iii) a change in the majority of
the Board effected through one or more contested elections for Board
membership. Limited stock appreciation rights will automatically be included
as part of each grant made under the Automatic Option Grant, Salary
Investment Option Grant and Director Fee Option Grant Programs and may be
granted to one or more officers of the Company as part of their option grants
under the Discretionary Option Grant Program. Options with such a limited
stock appreciation right may be surrendered to the Company upon the
successful completion of a hostile tender offer for more than 50% of the
Company's outstanding voting stock. In return for the surrendered option, the
optionee will be entitled to a cash distribution from the Company in an
amount per surrendered option share equal to the excess of (i) the highest
price per share of Common Stock paid in connection with the tender offer over
(ii) the exercise price payable for such share.

The Board of Directors of the Company may amend or modify the Plan at
any time, subject to any required stockholder approval. The Plan will
terminate on the earliest of (i) 10 years after the Plan Effective Date, (ii)
the date on which all shares available for issuance under the Plan have been
issued as fully-vested shares or (iii) the termination of all outstanding
options in connection with certain changes in control or ownership of the
Company.

As a consequence of assuming options granted under the i5ive Plan, the
Company has outstanding under the Plan options to purchase an aggregate of
333,110 shares of Common Stock at an exercise price of $1.50.

46
<PAGE>

CERTAIN TRANSACTIONS WITH I5IVE MANAGEMENT
AND PRINCIPAL SHAREHOLDERS

In April 1996, i5ive issued an aggregate of 100 Class A common shares to
Northfield Capital Corporation and 284085 B.C. Ltd. for an aggregate purchase
price of $73.

From its inception in April 1996 through June 30, 1998 Northfield
Capital Corporation and 284085 B.C. Ltd. advanced to i5ive the sums of
$270,156 and $197,098 used for general corporate purposes and working
capital. Such amounts accrued interest at the rate of 6.5% per annum. At the
closing of the sale of the i5ive shares to the Company, Northfield Capital
Corporation and 284085 B.C. Ltd. converted these advances and accrued
interest into an aggregate of 414,975 and 302,753 shares, respectively, of
i5ive. Such shares of i5ive were exchanged for 1,969,057 and 1,436,565
shares, respectively, of the Company's Common Stock or an effective purchase
price, based on the amounts advanced by such persons through June 30, 1998,
of approximately $0.14 per share of the Company's Common Stock.

Subsequent to June 30, 1998, Northfield Capital Corporation and 284085
B.C. Ltd. advanced or incurred additional liabilities on behalf of i5ive
aggregating $92,721 through November 30, 1998. Such amounts are intended to
be repaid out of the proposed private sale of the Company's securities
intended to be completed in the first quarter of 1999.

47
<PAGE>

PRINCIPAL STOCKHOLDERS OF THE COMPANY

The following table sets forth, as of November 13, 1998, after reflecting the
one-for-six reverse stock split effective November 25, 1998, both before
reflecting the completion of the Transaction and on a pro forma basis after
reflecting the completion of the Transaction as if the Transaction had been
completed on November 13, 1998, information regarding the beneficial ownership
of the Company's common stock, by (i) each stockholder known by the Company to
be or that will become the beneficial owner of more than 5% of the Company's
outstanding shares of capital stock, (ii) each existing Director and each
Director to be elected, (iii) the Named Executive Officers, and (iv) all
Directors and executive officers of the Company as a group before and after the
Transaction. After the closing of the Transaction, the Company will have
10,061,244 shares of common stock outstanding. The following table does not
reflect the proposed issuance of up to approximately 1.8 million shares of the
Company's common stock in a proposed private offering to occur subsequent to the
closing of the Transaction.

<TABLE>
<CAPTION>
Pro Forma
Before Completion of After Completion of the
the Transaction Transaction
--------------------------------------------------------------------

Number of Number of
Shares Percentage of Shares Percentage of
Beneficially Outstanding Beneficially Outstanding
Name and Address of Beneficial Owner(1) Owned(2) Common Stock Owned Common Stock
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Brian Bayley (3) 210,262 3.1% 210,262 2.1%

A. Murray Sinclair, Jr. (3) 210,262 3.1% 210,262 2.1%

Peter L. Bradshaw -0- -0- 1,436,565(4) 14.3%

Julie M. Bradshaw -0- -0- 807,571 8.0%

Sunny Hirai -0- -0- 1,122,068 11.2%

Benitz & Partners Limited (5)
94 Mount Street - First Floor
London, England W1Y 5H5 5,000,000 75.0% 2,500,000 24.8%

Northfield Capital Corporation
350 Bay Street - Suite 1100
Toronto, Ontario, Canada M5H 2S6 -0- -0- 2,244,136 22.3%

284085 B.C. Ltd.
1122 Mainland Street - suite 390
Vancouver, BC, Canada V6B 5L1 -0- -0- 1,436,565 14.3%

All officers and directors as a group
(3 persons) 210,262 3.1% 3,366,204 33.5%

</TABLE>
- ----------------

<PAGE>

(1) Unless otherwise indicated, the address of such person is c/o the Company.
(2) For purposes of the above table, a person is considered to "beneficially
own" any shares with respect to which he or she exercises sole or shared
voting or investment power or of which he or she has the right to acquire
the beneficial ownership within 60 days following the Record Date.
(3) Consists of 210,262 shares of Common Stock owned by Quest Ventures Ltd. of
which Mr. Sinclair is President and Mr. Bayley is a Director and of which
each holds 50% of the outstanding capital stock.
(4) Shares held by 284085 B.C. Ltd. of which Mr. Bradshaw is an officer,
Director and principal shareholder.
(5) Benitz & Partners Limited is an investment dealer regulated in England by
the Securities and Futures Authority and holds the shares as a portfolio
manager as an agent for accounts fully managed by it. Benitz & Partners
Limited disclaims a beneficial interest in such shares.

<PAGE>

GENERAL

i5ive was organized under the laws of British Columbia on April 9, 1996.
Its address is 1122 Mainland Street, Suite 390, Vancouver, British Columbia,
Canada V6B 5L1, and its telephone number is (604) 682-1400.

This Current Report may contain statements which constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the plans, intentions, beliefs and current
expectations of the Company, its directors, or its officers with respect to the
future business activities and operating performance of the Company and its
acquisition of i5ive. Investors are cautioned that any such forward-looking
statements are not guarantees of future business activities or performance and
involve risks and uncertainties, and that the Company's future business
activities may differ materially from those in the forward-looking statements as
a result of various factors, including, among others, the inability of the
Company to raise additional capital. Additional important factors that could
cause such differences are described in the Company's periodic filings with the
Securities and Exchange Commission, including the Company's annual report on
Form 10-KSB, quarterly reports on Form 10-QSB and current reports on Form 8-K.

<PAGE>

ITEM 5. OTHER EVENTS

Effective November 25, 1998, the Company effected a one-for-six reverse
stock split of its outstanding shares of common stock.

Effective December 4, 1998, the Company changed its corporate name to
Suite101.com, Inc.

The reverse stock split and the change of the Company's corporate name had
been authorized by stockholders at a meeting held on July 2, 1998.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS:

(a) Financial statements of businesses acquired

The following financial statements of the business acquired are filed as
exhibits hereto:

Audited financial statements of i5ive communications, inc. as of and
for the years ended December 31, 1997 and 1996

Audited Balance Sheets as of December 31, 1997 and 1996

Statement of Operations for the years ended December 31, 1997 and 1996

Statement of Cash Flows for the years ended December 31, 1997 and
1996.

Notes to Audited Financial Statements

Unaudited financial statements of i5ive communications, inc. as of and
for the nine months ended September 30, 1998.

Unaudited Balance Sheets as of September 30, 1998 and 1997.

Unaudited Statement of Operations for the nine month periods ended
September 30, 1998 and 1997.

Unaudited Statement of Cash Flows for the nine month periods ended
September 30, 1998 and 1997.

Notes to Unaudited Financial Statements

<PAGE>

Pro Forma financial information

Pro Forma Condensed Income Statement for the Year Ended December 31,
1997

Pro Forma Condensed Income Statement for the Nine Month Period Ended
September 30, 1998

Pro Forma Condensed Balance Sheet - September 30, 1998

EXHIBIT # Description of Document
<S> <C>

3.1 Certificate of Amendment filed with the State of Delaware on
November 25, 1998

3.2 Certificate of Amendment filed with the State of Delaware on
December 4, 1998

10.1 Amendment dated November 18, 1998 to Purchase Agreement among
Registrant and Northfield Capital Corporation, 284085 B.C. Ltd.
and i5ive communications inc.

10.2 Amendment dated December 1,1998 to Purchase Agreement Among
Registrant and Northfield Capital Corporation, 284085 B.C. Ltd.
and i5ive Communications inc.

<PAGE>

10.3 Amendment dated December 3, 1998 to Purchase Agreement Among
Registrant and Northfield Capital Corporation, 284085 B.C. Ltd.
and i5ive Communications inc.

99.1 Press Release dated December 14, 1998
</TABLE>
53

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused thus report to be signed on its behalf by the
undersigned hereunto duly authorized.

Suite101.com, Inc.

Dated: December 14, 1998 By: /s/ PETER BRADSHAW
----------------------------------
Peter Bradshaw, President

54
<PAGE>

I5IVE COMMUNICATIONS INC.

FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND DECEMBER 31, 1996

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
i5ive communications inc.

We have audited the accompanying balance sheets of i5ive communications inc.
as of December 31, 1997 and December 31, 1996, and the related statements of
income and deficit and cash flows for the two years then ended. The
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of i5ive communications inc. as
of December 31, 1997 and December 31, 1996, and the results of their
operations and their cash flows for the two years then ended, in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from
operations, and, at the date of this report, has no liquidity resources. The
Company's ability to continue as a going concern is dependent upon its
ability to raise additional capital or to merge with a revenue producing
venture partner. These matters raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

N.I. Cameron Inc. (signed)

F-2
<PAGE>

VANCOUVER, B.C. CHARTERED ACCOUNTANTS
November 18, 1998
I5IVE COMMUNICATIONS INC.
BALANCE SHEET
DECEMBER 31, 1997 AND DECEMBER 31, 1996
(U.S. DOLLARS)

1997 1996
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ - $ 11,628
Accounts receivable (Note 3) 7,177 9,233
--------- ---------
7,177 20,861
PROPERTY, PLANT AND EQUIPMENT,
at cost (Notes 2 and 3)
Computer equipment 42,612 24,968
Furniture and fixtures 740 -
Leasehold improvements 17,727 16,287
--------- ---------
61,079 41,255
Less: accumulated amortization 17,485 5,374
--------- ---------
43,594 35,881
--------- ---------
TOTAL ASSETS $ 50,771 $ 56,742
---------- ---------
---------- ---------

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Checks written in excess of funds on deposit $ 1,578 $ -
Accounts payable 14,528 10,825
--------- ---------
16,106 10,825
DUE TO SHAREHOLDERS (Note 3) 335,203 142,201
DUE TO AFFILIATED COMPANIES (Note 4) 69,606 38,633
--------- ---------
TOTAL LIABILITIES 420,915 191,659
--------- ---------

CAPITAL STOCK
Authorized:
100 Class A common shares with a par
value of $1 Cdn each
49,900 Class B preferred shares with a
par value of $1 Cdn each
Issued:
100 Class A common shares 73 73

DEFICIT (383,564) (135,683)

EQUITY ADJUSTMENT FROM FOREIGN
CURRENCY TRANSLATION (Note 8) 13,347 693
--------- ---------
TOTAL STOCKHOLDERS' DEFICIT (370,144) (134,917)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 50,771 $ 56,742
--------- ---------
--------- ---------
</TABLE>

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

F-3
<PAGE>

I5IVE COMMUNICATIONS INC.
STATEMENT OF INCOME AND DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996
(U.S. DOLLARS)

1997 1996
--------- ---------
(Note 1)
<S> <C> <C>
REVENUE
Software licensing $ 6,751 $ 3,427
Other 3,623 1,369
--------- ---------
10,374 4,796
--------- ---------

EXPENSES
Selling, general and administrative expenses 245,556 135,077
Amortization 12,699 5,402
--------- ---------
258,255 140,479
--------- ---------
NET LOSS FOR THE YEAR (247,881) (135,683)

DEFICIT AT BEGINNING OF THE YEAR (135,683) -
--------- ---------
DEFICIT AT END OF THE YEAR $(383,564) $(135,683)
--------- ---------
--------- ---------
</TABLE>

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

F-4
<PAGE>

I5IVE COMMUNICATIONS INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996
(U.S. DOLLARS)

<TABLE>
<CAPTION>
1997 1996
---------- ----------
(Note 1)
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net loss $(247,881) $(135,683)
Adjustment to reconcile net loss to net cash
used in operating activities
Amortization 12,699 5,402
---------- ----------
(235,182) (130,281)
Changes in operating assets and liabilities
Accounts receivable 1,745 (9,281)
Accounts payable 4,254 10,881
---------- ----------
Net cash used in operating activities (229,183) (128,681)
---------- ----------
Cash flows used in investing activities
Purchase of capital assets (22,102) (41,467)
---------- ----------
Net cash used in investing activities (22,102) (41,467)
---------- ----------
Cash flows provided by financing activities
Advances from shareholders 204,661 142,930
Advances from affiliated companies 33,485 38,832
Issuance of capital stock - 73
---------- ----------
Net cash provided by financing activities 238,146 181,835

Effect of exchange rate changes on cash (67) (59)
---------- ----------
Net increase (decrease) in cash (13,206) 11,628

Cash at beginning of year 11,628 -
---------- ----------
Cash (deficiency) at end of year $ (1,578) $ 11,628
---------- ----------
---------- ----------
</TABLE>

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

F-5
<PAGE>

I5IVE COMMUNICATIONS INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND DECEMBER 31, 1996

1. INCORPORATION

The Company was incorporated under the laws of the Province of British
Columbia, Canada on April 9, 1996 and commenced operations on that date.
The 1996 comparative figures are for the nine-month period ended December
31, 1996.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles. Because a precise
determination of many assets and liabilities is dependent upon future
events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.

The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality and within the framework
of the significant accounting policies summarized below:

a) Going Concern
The accompanying financial statements have been presented assuming the
Company will continue as a going concern. At December 31, 1997 the
Company had accumulated $383,564 in losses and had no material
revenue-producing operations. At the date of this report, the Company
has almost no liquidity and its ability to continue as a going concern
is dependent upon its ability to raise additional capital or merge
with a revenue producing venture partner. These matters raise
substantial doubt about the Company's ability to continue as a going
concern. No adjustments have been made in the accompanying financial
statements to provide for this uncertainty.

b) Property, Plant and Equipment
Property, plant and equipment are capitalized at original cost and
amortized over their estimated useful lives at the following annual
bases and rates:

<TABLE>
<S> <C>
Computer equipment 30% declining balance
Furniture and fixtures 20% declining balance
Leasehold improvements 20% straight-line
</TABLE>

One-half the normal amortization is taken in the year of acquisition.

c) Research and Development
Research and development costs are expensed as incurred.

F-6
<PAGE>

I5IVE COMMUNICATIONS INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND DECEMBER 31, 1996

2. SIGNIFICANT ACCOUNTING POLICIES (cont'd)

d) Foreign Exchange
Unless otherwise stated, all amounts are stated in United States
dollars. The functional currency of the Company is the Canadian
dollar. Hence, all asset and liability accounts have been translated
using the exchange rate as at December 31, 1997 and December 31, 1996
and all revenues and expenses have been translated using the average
exchange rate for each period. The rates used were as follows:

(in Cdn $ per U.S.$)

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
December 31 rate .7009 .7296
Average rate for the year .7223 .7333

</TABLE>

By September 30, 1998 the exchange rate had dropped to .6573.

3. DUE TO SHAREHOLDERS

The amounts due to shareholders are payable on demand and, effective
December 30, 1997, bear interest at the rate of 6.5% per annum calculated
annually not in advance. The Company has pledged all its assets as
security for the amounts due to shareholders.

4. DUE TO AFFILIATED COMPANIES

Amounts due to affiliated companies have no specific terms of repayment and
are interest-free. The affiliated companies are 100% - owned subsidiaries
of a 40% shareholder of the Company.

5. CAPITAL STOCK

During the period ended December 31, 1996 , the Company issued 100 Class A
Common shares for cash of $73 U.S. There were no shares issued during the
year ended December 31, 1997.

6. RELATED PARTY TRANSACTIONS

The Company has incurred consulting fees of $7,585 (1996 - $28,414) and
salaries of $22,754 (1996 - Nil) to a minority shareholder of the Company.

F-7
<PAGE>

I5IVE COMMUNICATIONS INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND DECEMBER 31, 1996

7. INCOME TAXES

The Company has available losses for Canadian income tax purposes which may
be carried forward as follows:

<TABLE>
<S> <C> <C>
Up to and including 2003 $135,173
(Cdn $) 2004 326,197
--------
$461,370
--------
--------
</TABLE>

8. EQUITY ADJUSTMENT FROM FOREIGN CURRENCY TRANSLATION

Opening balance of cumulative translation adjustments $ 69 $ -
Translation adjustments for the period 12,654 693
-------- -------
Closing balance of cumulative translation adjustments $ 13,347 $ 693
-------- -------
-------- -------
</TABLE>

9. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using Year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the entity,
including those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.

F-8
<PAGE>

I5IVE COMMUNICATIONS INC.

FINANCIAL STATEMENTS

SEPTEMBER 30, 1998

(UNAUDITED - SEE ACCOUNTANTS' COMPILATION REPORT)

F-9

<PAGE>

ACCOUNTANTS' COMPILATION REPORT

We have compiled the accompanying balance sheets of i5ive communications inc. as
of September 30, 1998 and September 30, 1997 and the related statements of
income and deficit and cash flows for the years then ended in accordance with
Statements on Standards for Accounting and Review services issued by the
American Institute of Certified Public Accountants.

A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and accordingly, do not express
an opinion or any form of assurance on them.

N.I. Cameron Inc. (signed)

VANCOUVER, B.C. CHARTERED ACCOUNTANTS
November 19, 1998

F-10

<PAGE>

I5IVE COMMUNICATIONS INC.
BALANCE SHEET
SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED - SEE ACCOUNTANTS' COMPILATION REPORT)
(U.S. DOLLARS)

ASSETS

<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash $ - $ 11,227
Accounts receivable (Note 2) 4,003 6,116
-------- --------
4,003 17,343
-------- --------
PROPERTY, PLANT & EQUIPMENT, at cost(Notes 1 and 2)
Computer equipment 43,199 40,220
Furniture and fixtures 694 761
Leasehold improvements 16,625 18,236
-------- --------
60,518 59,217
Less: accumulated amortization 25,701 14,410
-------- --------
34,817 44,807
-------- --------

TOTAL ASSETS $ 38,820 $ 62,150
-------- --------
-------- --------

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Checks written in excess of funds on deposit $ 12,779 $ -
Accounts payable 21,790 9,076
-------- --------
34,569 9,076
DUE TO SHAREHOLDERS (Note 2) 490,408 290,744
DUE TO AFFILIATED COMPANIES (Note 3) 69,879 66,221
-------- --------
TOTAL LIABILITIES 594,856 366,041
-------- --------

CAPITAL STOCK
Authorized:
100 Class A common shares with a par value of $1 Cdn each
49,900 Class B preferred shares with a par value of $1 Cdn each
Issued:
100 Class A common shares 73 73

ACCUMULATED DEFICIT (600,666) (306,550)

EQUITY ADJUSTMENT FROM FOREIGN
CURRENCY TRANSLATION (Note 5) 44,557 2,586
-------- --------
TOTAL STOCKHOLDERS' DEFICIT (556,036) (303,891)
-------- --------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 38,820 $ 62,150
-------- --------
-------- --------
</TABLE>

F-11

<PAGE>

I5IVE COMMUNICATIONS INC.
STATEMENT OF INCOME AND DEFICIT
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED - SEE ACCOUNTANTS' COMPILATION REPORT)
(U.S. DOLLARS)

<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
REVENUE
Software licensing $ 20,115 $ 6,751
Other 578 1,482
-------- --------

20,693 8,233
-------- --------

EXPENSES
Selling, general and administrative 228,127 169,984
Amortization 9,668 9,116
-------- --------
237,795 179,100
-------- --------

NET LOSS FOR THE PERIOD (217,102) (170,867)

DEFICIT AT BEGINNING OF THE PERIOD (383,564) (135,683)
-------- --------

DEFICIT AT END OF THE PERIOD $(600,666) $(306,550)
-------- --------
-------- --------
</TABLE>

F-12

<PAGE>

I5IVE COMMUNICATIONS INC.
STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED - SEE ACCOUNTANTS' COMPILATION REPORT)
(U.S. DOLLARS)

<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net loss $ (217,102) $ (170,867)
Adjustment to reconcile net loss to net cash
used in operating activities
Amortization 9,668 9,116
--------- ---------
(207,434) (161,751)
Changes in operating assets and liabilities
Accounts receivable 2,835 3,014
Accounts payable 8,486 (1,625)
--------- ---------
Net cash used in operating activities (196,113) (160,362)
--------- ---------

Cash flows used in investing activities
Purchase of capital assets (3,364) (18,481)
--------- ---------
Net cash used in investing activities (3,364) (18,481)
--------- ---------

Cash flows provided by financing activities
Advances from shareholders 182,953 150,486
Advances from affiliated companies 4,782 28,092
--------- ---------
Net cash provided by financing activities 187,735 178,578
--------- ---------

Effect of exchange rate changes on cash 541 (136)
--------- ---------
Net decrease in cash (11,201) (401)

Cash (deficiency) at beginning of period (1,578) 11,628
--------- ---------

Cash (deficiency) at end of period $ (12,779) $ 11,227
--------- ---------
--------- ---------
</TABLE>

F-13

<PAGE>

I5IVE COMMUNICATIONS INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED - SEE ACCOUNTANTS' COMPILATION REPORT)

1. SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements reflect all adjustments that, in the
opinion of management, are necessary for a fair presentation of the
financial position of i5ive communications inc. Such adjustments are of a
normal recurring nature. The results of operations for the interim period
are not necessarily indicative of the results to be expected for the full
year.

a) Going Concern
The accompanying financial statements have been presented assuming the
Company will continue as a going concern. At September 30, 1998 the
Company had accumulated $600,666 in losses and had no material
revenue-producing operations. At the date of this report, the Company
has almost no liquidity and its ability to continue as a going concern
is dependent upon its ability to raise additional capital or merge
with a revenue producing venture partner. These matters raise
substantial doubt about the Company's ability to continue as a going
concern. No adjustments have been made in the accompanying financial
statements to provide for this uncertainty.

b) Property, Plant and Equipment
Property, plant and equipment are capitalized at original cost and
amortized over their estimated useful lives at the following annual
bases and rates:

Computer equipment 30% declining balance
Furniture and fixtures 20% declining balance
Leasehold improvements 20% straight-line

One-half the normal amortization is taken in the year of acquisition.

c) Research and Development
Research and development costs are expensed as incurred.

F-14

<PAGE>

I5IVE COMMUNICATIONS INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED - SEE ACCOUNTANTS' COMPILATION REPORT)

1. SIGNIFICANT ACCOUNTING POLICIES (cont'd)

(in Cdn $ per U.S.$)

<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
September 30 rate .6573 .7210
Average rate for the period .6831 .7223
</TABLE>

2. DUE TO SHAREHOLDERS

3. DUE TO AFFILIATED COMPANIES

Amounts due to affiliated companies have no specific terms of repayment and
are interest-free. The affiliated companies are 100% - owned subsidiaries
of a 40% shareholder of the Company.

4. RELATED PARTY TRANSACTIONS

The Company has incurred consulting fees and salaries of $21,518 (1997 -
$22,752) to a minority shareholder of the Company.

F-15

<PAGE>

I5IVE COMMUNICATIONS INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED - SEE ACCOUNTANTS' COMPILATION REPORT)

5. EQUITY ADJUSTMENT FROM FOREIGN CURRENCY TRANSLATION

<TABLE>
<CAPTION>
1998 1997
------ -----
<S> <C> <C>
Opening balance of cumulative translation adjustments $13,347 $ 693
Translation adjustments for the period 31,210 1,893
------ -----

Closing balance of cumulative translation adjustments $44,557 $2,586
------ -----
------ -----
</TABLE>

6. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

F-16
<PAGE>

PRO FORMA FINANCIAL INFORMATION

The accompanying pro forma financial information reflects the purchase by
Suite 101.com Inc. (formerly Kinetic Ventures Ltd.) of all the issued and
outstanding shares of i5ive communications inc. The transaction will be
accounted for as a pooling of interests. The pro forma information presented
consists of condensed income statements for the year ended December 31, 1997
and 9 month period ended September 30, 1998 as if the transaction had
occurred on January 1, 1997. In addition, a pro forma balance sheet as at
September 30, 1998 is presented.

PRO FORMA CONDENSED INCOME STATEMENT
FOR YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)

Historical Statements
---------------------
Kinetic Ventures i5ive Adjustments Pro Forma
Ltd. communications inc. (Note 1) Statement
---------------- ------------------- ----------- ---------
<S> <C> <C> <C> <C>
Sales $ 345,450 $ 8,959 $ (345,450) $ 8,959
Cost of Goods Sold (253,973) - 253,973 -
Selling, General and Administration (691,894) (258,255) 635,583 (314,566)
Interest expense (67,841) - 67,841 -
Gain on sale of assets 1,810,619 - (1,810,619) -
Other income 12,800 1,415 (12,800) 1,415
---------- ---------- ----------- ---------
Income Before Income Tax Expense 1,155,161 (247,881) (1,211,472) (304,192)

Income taxes (25,553) - 22,553 (3,000)
---------- ---------- ----------- ---------

Net Income (loss) $ 1,129,608 $ (247,881) $(1,188,919) $(307,192)
---------- ---------- ----------- ---------
---------- ---------- ----------- ---------

Net Income (loss) per common share (Basic and diluted) $ (0.06)
-----------
-----------
Adjusted weighted average number of
common shares issued (Note 2) 5,269,578
---------
---------
</TABLE>

NOTES TO THE PRO FORMA CONDENSED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER
31, 1997

Note 1 The adjustments above reflect the removal from the historical figures
of the sale by Kinetic Ventures Ltd. of all of its operating assets
on March 20, 1997 to Ballard Medical Products.

Note 2 The adjusted weighted average number of common shares issued has been
adjusted to reflect the 1:6 reverse stock split of shares.

F-17

<PAGE>

PRO FORMA CONDENSED INCOME STATEMENT
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1998
(UNAUDITED)

Income (Loss) Before Income Tax Expense (38,768) (217,102) (255,870)
----------- ------------ ----------- -----------
Income taxes (907) - (907)

Net Income (loss) $ (39,675) $ (217,102) $ - $ (256,777)
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------

Net Income (loss) per common share
(Basic and Diluted) $ (0.03)
-----------
-----------
Adjusted weighted average number of
common shares issued 10,061,244
-----------
-----------
</TABLE>

F-18

<PAGE>

PRO FORMA CONDENSED BALANCE SHEET
SEPTEMBER 30, 1998
(UNAUDITED)

Historical Statements
---------------------
Kinetic Ventures i5ive Adjustments Pro Forma
Ltd. communications inc. Statement
---------------- ------------------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash $ 1,032 $ (12,779) $ 65,000 (Note 3) $ 53,253
Accounts receivable - 4,003 4,003
Furniture and Equipment - 34,817 34,817
Total Assets $ 1,032 $ 26,041 $ 65,000 $ 92,073
-------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Loan payable $ - $ - $ 65,000 (Note 3) $ 65,000
Accounts payable 36,444 21,790 58,234
-------------------------------------------------------------------------
36,444 21,790 65,000 123,234
Due to shareholders - 490,408 (429,394)(Note 1) 61,014
Due to affiliated companies - 69,879 (42,375)(Note 1) 27,504
-------------------------------------------------------------------------
Total Liabilities 36,444 582,077 (406,769) 211,752
-------------------------------------------------------------------------
568 (Note 2) 471,769 (Note 1)
Common Stock 39,934 73 (471,842)(Note 2) 40,502
Additional paid in capital 15,895,073 - 471,274 (Note 2) 16,366,347
Accumulated deficit (15,970,419) (556,109) (16,526,528)
-------------------------------------------------------------------------
Total Stockholders' Deficit (35,412) (556,036) 471,769 (119,679)
-------------------------------------------------------------------------
Total Liabilities and Stockholders'
Deficit $ 1,032 $ 26,041 $ 65,000 $ 92 073
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>

NOTES TO THE PRO FORMA CONDENSED BALANCE SHEET DATED SEPTEMBER 30, 1998

Note 1 This adjustment is for the conversion of $717,702 (Cdn) on amounts due
to shareholders and affiliated companies into common shares of i5ive
communications inc. prior to the transaction.

Note 2 This adjustment reflects the share issuance by Suite 101.com for the
acquisition of i5ive shares and removes i5ive's capital stock from the
equity.

Note 3 This adjustment reflects the $65,000U.S. working capital loan received
subsequent to September 30, 1998 in anticipation of the business
combination. The funds were received from an arms'-length party and
the intention is to repay the loan out of proceeds from a future
private placement.

F-19

<PAGE>

EXHIBIT 3.1

CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION

Kinetic Ventures Ltd., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:

First: That at a meeting of the Board of Directors of Kinetic Ventures
Ltd., resolutions were duly adopted setting forth proposed amendments of the
Certification of Incorporation of said corporation, declaring said amendments to
be advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolutions setting forth the proposed amendments
are as follows:

RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered First so that, as
amended, said Article shall be and read in its entirety as follows:

First: The name of the corporation (hereinafter sometimes called
the "Corporation") is Suite101.com, Inc.

RESOLVED, that the Certificate of Incorporation of this corporation be
amended by adding a new paragraph (a) to the end of the Article Fourth
thereof to read as follows:

(a) On the date and at the time a Certificate of Amendment to
the Certificate of Incorporation of the Corporation is filed with the
Secretary of State of the State of Delaware (the "Effective Date"),
each share of the Corporation's Common Stock, $.001 par value, issued
and outstanding immediately prior to the Effective Date (the "Old
Common Stock"), shall automatically and without any action on the part
of the holder thereof be reclassified as and changed, pursuant to a
one-for-six reverse stock split of the Corporation's Common Stock,
$.001 par value (the "New Common Stock"), subject to the treatment of
fractional share interests as described below. Each holder of a
certificate or certificates which immediately prior to the Effective
Date represented outstanding shares of the Old Common Stock (the "Old
Certificates," whether one or more) representing the number of whole
shares of the New Common Stock into which and for which the shares of
the Old Common Stock formerly represented by such Old Certificates so
surrendered are reclassified under the terms hereof. From and after
the Effective Date, Old Certificates shall represent only the right to
receive new certificates (the "New Certificates") pursuant to the
provisions hereof. No certificates or scrip

<PAGE>

representing fractional share interests in New Common Stock will be
issued, and no such fractional share interest will entitle the holder
thereof to vote, or to any rights of a stockholder of the Corporation.
Any fraction of a share of New Common Stock to which the holder would
otherwise be entitled will be adjusted upward to the nearest whole
share. If more than one Old Certificate shall be surrendered at one
time for the account of the same stockholder, the number of full shares
of the New Common Stock for which New Certificates shall be issued shall
be computed on the basis of the aggregate number of shares represented
by the Old Certificates so surrendered. In the event that the
Corporation's Transfer Agent determines that a holder of the Old
Certificates has not tendered all his certificates for exchange, the
Transfer Agent shall carry forward any fractional share until all
certificates of that holder have been presented for exchange such that
payment for fractional shares to any one person shall not exceed one
share. If any New Certificate is to be issued in a name other than that
in which the Old Certificates surrendered for exchange are issued, the
Old Certificates so surrendered shall be properly endorsed and otherwise
in proper form for transfer, and the person or persons requesting such
exchange shall affix any requisite stock transfer tax stamp to the Old
Certificates surrendered, to provide funds for their purchase, or
establish to the satisfaction of the Transfer Agent that such taxes are
not payable. From and after the Effective Date, the amount of capital
represented by the shares of the New Common Stock into which and for
which the shares of the Old Common Stock are classified under the terms
hereof shall be the same as the amount of capital represented by the
shares of Old Common Stock so reclassified, until thereafter reduced or
increased in accordance with applicable law. As a result of this
Amendment, the authorized stock of the Corporation shall not change and
thereafter shall remain 41,000,000 shares in aggregate, comprised of
40,000,000 shares of Common Stock, $.001 par value per share, and
1,000,000 shares of Preferred Stock, $.01 par value, until thereafter
reduced or increased in accordance with applicable law.

Second: That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware, at which meeting the necessary number of shares as
required by statute were voted in favor of the amendments.

Third: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

-2-
<PAGE>

IN WITNESS WHEREOF, said Kinetic Ventures Ltd., has caused this Certificate
to be signed by Brian E. Bayley, its authorized officer, this 24th day of
November, 1998.

/s/ Brian E. Bayley
--------------------------------------------------
Brian E. Bayley, President, Kinetic Ventures Ltd.

-3-

<PAGE>

EXHIBIT 3.2

CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION

Kinetic Ventures Ltd., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:

First: That at a meeting of the Board of Directors of Kinetic Ventures
Ltd., a resolution was duly adopted setting forth a proposed amendment of the
Certification of Incorporation of said corporation, declaring said amendment to
be advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:

First: The name of the corporation (hereinafter sometimes called
the "Corporation") is Suite101.com, Inc.

Third: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

IN WITNESS WHEREOF, said Kinetic Ventures Ltd., has caused this Certificate
to be signed by Brian E. Bayley, its authorized officer, this 4th day of
December, 1998.

/s/ Brian E. Bayley
--------------------------------------------------
Brian E. Bayley, President, Kinetic Ventures Ltd.

<PAGE>

EXHIBIT 10.1

KINETIC VENTURES LTD.
SUITE 850, 1095 WEST PENDER STREET
VANCOUVER, B.C.
V6E 2M6

November 18, 1998

NORTHFIELD CAPITAL 284085 B.C. LTD.
CORPORATION Suite 390, 1122 Mainland Street
Suite 1100, 350 Bay Street Vancouver, B.C.
Toronto, Ontario V6B 5L1
M5H 2S6

(collectively the "Vendors")

I5IVE COMMUNICATIONS INC.
Suite 390, 1122 Mainland Street
Vancouver, B.C.
V6B 5L1

Dear Sirs:

RE: PURCHASE OF SHARES OF I5IVE COMMUNICATIONS INC. (THE "COMPANY")

When signed by each of the Vendors and the Company this letter will evidence the
amendment to that agreement dated October 9, 1998 and accepted effective October
30, 1998 (the "Share Purchase Agreement") with us (the "Purchaser") in respect
of the acquisition by the Purchaser of all of the shares of the Company (the
"Shares") from the Vendors. Capitalized terms in this agreement shall have the
same meaning as in the Share Purchase Agreement.

For valuable consideration paid by each party to the other, the receipt of which
is hereby acknowledged, the Share Purchase Agreement is amended as follows:

1. Section D of the Share Purchase Agreement is deleted and replaced with the
following:

"D. WORKING CAPITAL LOAN

Upon the execution and delivery of this agreement by the Vendors and
the Company, the Purchaser shall advance to the Company the sum of
Cdn$ 100,000 as an interest free loan to be used for working capital
in the Company's business (the "Loan"). The Loan shall only be used to
finance the Business in the ordinary course and shall not be used to
repay any outstanding non-arms length indebtedness of the Company or
pay any dividends,

<PAGE>

-2-

bonuses or payouts. The Loan shall be repayable on demand without
interest if (i) it is not used for the foregoing purposes; or
(ii) the acquisition of the Shares by the Purchaser from
the Vendors does not close on or before January 29, 1999. If (i)
occurs the Company shall repay the Loan in cash and if (ii) occurs the
Purchaser, at its option, may require the Company to repay the Loan in
cash or to issue to or as directed by the Purchaser that number of
common shares of the Company equal to 3% of the common shares of the
Company then outstanding on a fully diluted basis for an aggregate
purchase price of Cdn$ 100,000."

The Company acknowledges receipt of the Loan and delivers to the Purchaser
herewith a promissory note evidencing such indebtedness.

2. The first part of paragraph (a) of section F of the Share Purchase
Agreement respecting the conditions precedent for the Vendors to close is
amended as follows:

(a) The Purchaser does not need to have completed the Private Placement
referred to in paragraph F(a)(2) prior to closing; and

(b) Quotations for the Purchaser's common stock do not need to have
appeared on the OTC bulletin board for at least the five consecutive
trading days before the Closing Date as referred to in paragraph F(a)(9).

3. If the acquisition of the Shares does not complete by January 29, 1999 the
Purchaser shall forthwith change its name to one which does not contain the
words "Suite 101.com" and which does not indicate or imply an association
with the Company or Business;

4. Notwithstanding the provisions of section B.34 and the second paragraph 2
of part F(a) of the Share Purchase Agreement the parties acknowledge that
as at June 30, 1998 the accounts payable of the Company as shown on the
June 30, 1998 balance sheet included not more than Cdn$ 70,000 of
liabilities owed by the Company to one or more of the shareholders and
their affiliates and that these accounts payable are to be repaid in the
normal course and are not included in the Cdn$ 717,702 which is to forgiven
or converted into shares of the Company prior to closing; and

5. The closing shall take place on December 8, 1998 or as soon as possible
thereafter.

Except as amended hereby the Share Purchase Agreement shall continue in full
force and effect. This agreement may be signed in one or more counterparts which
shall together comprise one and the same document. This agreement may also be
delivered by telecopier which delivery shall be deemed to be valid and
sufficient.

<PAGE>

-3-

If the foregoing correctly reflects our agreement please sign below where
indicated.

Yours truly,

KINETIC VENTURES LTD.

Per:

Brian E. Bayley,
President

AGREED AND ACCEPTED

NORTHFIELD CAPITAL 284085 B.C. LTD.
CORPORATION

per: per:

Signature Signature

Name Position Name Position

Date Date

I5IVE COMMUNICATIONS INC.

per:

Signature

Name Position

Date

<PAGE>

EXHIBIT 10.2

KINETIC VENTURES LTD.
850 - 1095 WEST PENDER STREET
VANCOUVER, B.C. V6E 2M6

December 1, 1998

NORTHFIELD CAPITAL CORPORATION
Suite 1100, 350 Bay Street
Toronto, Ontario M5H 2S6

284085 B.C. LTD.
Suite 390, 1122 Mainland Street
Vancouver, B.C. V6B 5L1

I5IVE COMMUNICATIONS INC.
Suite 390, 1122 Mainland Street
Vancouver, B.C. V6B 5L1

Dear Sirs:

Re: Purchase of Shares of i5ive communications inc. (the "Company")
- --------------------------------------------------------------------

Kinetic Ventures Ltd. hereby agrees that notwithstanding the provisions of the
last paragraph contained under the heading "G. Post Closing Transactions" in
the Share Purchase Agreement dated October 9, 1998, as amended, among Kinetic
Ventures Ltd., Northfield Capital Corporation, 284085 B.C. Ltd. and i5ive
communications inc. the indebtedness owing to the Company's shareholders,
directors and officers referred to in such paragraph may be repaid in the normal
course.

KINETIC VENTURES LTD.

Per: /s/ Brian E. Bayley
-----------------------------
Signature

Brian E. Bayley
-----------------------------
Name Position

<PAGE>

EXHIBIT 10.3

KINETIC VENTURES LTD.850 - 1095 WEST PENDER STREETVANCOUVER, B.C. V6E 2M6

December 3, 1998

NORTHFIELD CAPITAL CORPORATION Suite 1100, 284085 B.C. LTD. Suite 390,
350 Bay Street 1122 Mainland Street
Toronto, Ontario M5H 2S6 Vancouver, B.C. V6B 5L1

I5IVE COMMUNICATIONS INC. Suite 390,
1122 Mainland Street
Vancouver, B.C. V6B 5L1

Dear Sirs:

RE: PURCHASE OF SHARES OF I5IVE COMMUNICATIONS INC.("I5IVE") BY KINETIC
VENTURES LTD. (THE "PURCHASER") PURSUANT TO THAT SHARE PURCHASE AGREEMENT
DATED OCTOBER 9, 1998, AS AMENDED, (THE "AGREEMENT") AMONG KINETIC VENTURES
LTD., NORTHFIELD CAPITAL CORPORATION, 284085 B.C. LTD. AND I5IVE
COMMUNICATIONS INC.

The Purchaser hereby acknowledges that:

1. notwithstanding the provisions of paragraph B. 3 of the Agreement i5ive has
or, prior to closing, will have granted options to purchase 70,202 Class A
common shares in its capital at a price of US$ 7.12 per share and:

(a) consents thereto pursuant to paragraph B. 4 of the Agreement: and

(b) agrees it will assume such options and issue, in their place, stock
options to purchase shares of the Purchaser's common stock on the
basis of an option to purchase one share of i5ive being equivalent to
an option to purchase 4.745 shares of the Purchaser at an exercise
price of US$ 1.50 per share.

2. paragraphs A. 3 and B. 2 of the Agreement regarding the representations and
warranties share capital are amended to reflect that the authorized capital
of i5ive now consists of 90,000,000 Class A common shares and 10,000,000
Class B common shares of which 717,803 Class A shares and no Class B shares
are issued and outstanding and that Northfield Capital Corporation now owns
415,018 Class A shares and 284085 B.C. Ltd now owns 302,785 Class A shares
.

KINETIC VENTURES LTD.

Per: Authorized Signature
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EXHIBIT 99.1

SUITE101.COM
Real People Helping Real People.

FOR IMMEDIATE RELEASE
- ---------------------

NEWS RELEASE

KINETIC VENTURES, LTD. ANNOUNCES COMPLETION OF ACQUISITION OF I5IVE
COMMUNICATIONS INC. AND CHANGES TO BOARD OF DIRECTORS

CHANGES CORPORATE NAME TO SUITE101.COM, INC.

Vancouver, British Columbia, December 14, 1998 - Suite101.com (formerly Kinetic
Ventures Ltd.) (OTC-BOWGF) announced today that it has completed the purchase
all of the issued and outstanding common shares of i5ive communications inc., a
British Columbia corporation, with its principal office in Vancouver, British
Columbia, Canada. On November 25, 1998, the Company effected a one-for-six
reverse stock split and, as a consequence of the transaction and reflecting the
reverse stock split, has 10,061,244 shares of Common Stock outstanding. The
Company also announced that in completing the transaction it had changed its
corporate name to Suite101.com, Inc.

Concurrently with the closing of the transaction, the Company's existing three
Directors resigned and Peter L. Bradshaw, CEO and a Director of i5ive, Julie M.
Bradshaw, Managing Director and a Director of i5ive, and Sunny H. Hirai, Chief
Technical Officer and Director of i5ive, were elected as the three members of
the Company's Board of Directors. Mr. Bradshaw was also appointed the President
of the Company.

ABOUT SUITE101.COM
i5ive is an Internet Company engaged in the creation, operation and maintenance
of a World Wide Web based community, known as "Suite101.com" where Internet
users are able to express themselves, share ideas, interests and expertise, and
to publish content accessible to other users with common interests. Suite101.com
can be found on the Internet at the following address http://www.suite101.com.
The community includes its visitors, Members and Contributing Editors organized
topically into eleven major "Communities of Interest". By establishing a free
service enabling Internet users to create their own Web sites in Communities of
Interest, the Company further believes that the users will in turn write about
their experiences and offer their knowledge to other Internet users as a means
to find the best content and information on the Internet - quickly and easily.
These Communities of Interest provide the context and tools for Web users to
publish content, to communicate with other users, and to access a centralized
and easy-to-navigate destination for the Best of the Web content.

- more -

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This Press Release may contain statements which constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the plans, intentions, beliefs and current
expectations of the Company, its directors, or its officers with respect to the
future business activities and operating performance of the Company and its
acquisition of i5ive. Investors are cautioned that any such forward-looking
statements are not guarantees of future business activities or performance and
involve risks and uncertainties, and that the Company's future business
activities may differ materially from those in the forward-looking statements as
a result of various factors, including, among others, the inability of the
Company to raise additional capital necessary for the fulfillment of its
business plan. Additional important factors that could cause such differences
are described in the Company's periodic filings with the Securities and Exchange
Commission, including the Company's annual report on Form 10-KSB, quarterly
reports on Form 10-QSB and current report on Form 8-K. The filings may be viewed
at http://www.sec.gov

For more information contact:
Nancy McLeod, Investor Relations, Suite101.com
email: [email protected]
telephone: 604.682.1400
or visit our site at http://www.suite101.com

PRESSRELEASES\12-10-98