SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                        --------------------------------

                                   FORM 10-QSB

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

     For the Quarterly Period ended June 30, 2000

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

     For the Transition Period from _________ to _________

                        Commission File Number 000-27239

                                  EDUVERSE.COM
        (Exact Name of Small Business Issuer as Specified in its Charter)

          Nevada                                       88-0277072
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

                                1135 Terminal Way
                                    Suite 209
                             Reno, Nevada 89502-2168
                    (Address of Principal Executive Offices)

                                 (775) 332-3325
                (Issuer's Telephone Number, Including Area Code)

Check  whether  the issuer  has (1) filed all  reports  required  to be filed by
Section  13 or 15(d) of the  Exchange  Act  during  the past 12 months  (or such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  14,193,382 shares of common stock
outstanding as of June 30, 2000.

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

                                TABLE OF CONTENTS

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

     Item 1. Financial Statements (Unaudited) ............................................1

          Consolidated Balance Sheets at June 30, 2000 and December 31, 1999 .............2

          Consolidated  Statements  of  Operations  for the three months and six
          months ended June 30, 2000 and 1999. ...........................................3

          Consolidated Statements of Cash Flow for the six months ended June 30,
          2000 and 1999. .................................................................4

          Notes to Consolidated Financial Statements - June 30, 2000 .....................5

     Item 2.  Management's Discussion and Analysis of Financial Condition and
              Results of Operations ......................................................8

PART II.  OTHER INFORMATION .............................................................12

     Item 1. Legal Proceedings ..........................................................12

     Item 2. New Agreements .............................................................12

     Item 3. Recent Sales of Unregistered Securities ....................................13

     Item 4. Exhibits and Reports on Form 8-K ...........................................14

Signatures...............................................................................15

PART 1.  FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS

Consolidated Financial Statements

The following historical  consolidated financial data provided as of and for the
three and six month  periods  ended  June 30,  2000 have been  derived  from the
Company's unaudited internal  consolidated interim financial statements and have
been prepared in accordance  with United States  generally  accepted  accounting
principles.  In the opinion of the Company's  management,  contained  within the
financial  statements  are  all  adjustments,  which  are  necessary  for a fair
representation of the information pertaining to the Company's financial position
as of June 30, 2000.

                                       1

eduverse.com

                                   CONSOLIDATED BALANCE SHEETS
=============================================================================================================
As of June 30, 2000                                                         (expressed in U.S. dollars)

                                                                             30-Jun                    31-Dec
                                                                              2000                      1999
                                                                                $                         $
- --------------------------------------------------------------------------------------------------------------
                                                                                                 
ASSETS
Current
Cash                                                                          87,805                   43,584
Accounts receivable less allowance of $4,098 and $6,292
at June 30, 2000 and December 31 1999, respectively                           10,572                    8,826
Finished goods inventory                                                      13,377                   17,296
Other receivable                                                                   0                   10,123
Prepaid expenses and other                                                    84,793                   15,360
- --------------------------------------------------------------------------------------------------------------
Total current assets                                                         196,547                   95,189
Capital assets, net                                                           46,057                   53,096
- --------------------------------------------------------------------------------------------------------------
Total assets                                                                 242,604                  148,285
- --------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current
Accounts payable                                                              94,475                  106,824
Accrued expenses                                                              18,435                   19,585
Loans payable                                                                      0                   10,000
Current portion of royalty payable [note 5]                                  104,400                  104,400
- --------------------------------------------------------------------------------------------------------------
Total current liabilities                                                    217,310                  240,809
Royalty payable                                                               48,900                   48,900
- --------------------------------------------------------------------------------------------------------------
                                                                             266,210                  289,709
- --------------------------------------------------------------------------------------------------------------

Commitment
Shareholders deficit
Share capital [note 4]
Common stock - $0.001 par value
     Authorized shares: 50,000,000
     Issued and outstanding: 14,193,382 shares at June 30,2000
     and 13,185,089 shares at December 31, 1999                               14,193                   13,185
Preferred stock - $0.001 par value
     Authorized shares: 5,000,000
     Issued and outstanding: nil                                                   0                        0
Shares to be issued                                                                0                    3,078
Additional paid in capital                                                 2,095,021                1,384,683
Accumulated deficit                                                       (2,134,493)              (1,544,043)
Accumulated other eomprehensive income                                         1,673                    1,673
- --------------------------------------------------------------------------------------------------------------
Total shareholders' deficit                                                  (23,606)                (141,424)
- --------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' deficit                                  242,604                  148,285
- --------------------------------------------------------------------------------------------------------------

See accompanying notes

                                       2

eduverse.com

                                     CONSOLIDATED STATEMENTS OF OPERATIONS
=======================================================================================================================
                                                                                         (Expressed in U.S. dollars)

                                                    Three Months Ended (unaudited)         Six Months Ended (unaudited)

                                                        30-Jun            30-Jun            30-Jun             30-Jun
                                                        2000               1999              2000               1999
                                                          $                  $                 $                  $
- -----------------------------------------------------------------------------------------------------------------------
                                                                                                   
REVENUE
Software sales                                          9,320              4,519             11,807             95,497
Distribution royalties                                      0             20,000                  0             40,644
- -----------------------------------------------------------------------------------------------------------------------
Total revenues                                          9,320             24,519             11,807            136,141
Cost of goods sold                                     (5,028)            (1,365)              (730)           (35,923)
- -----------------------------------------------------------------------------------------------------------------------
Gross profit                                            4,292             23,154             11,077            100,218
- -----------------------------------------------------------------------------------------------------------------------

EXPENSES
Amortization of deferred charge                             0             31,900                  0             31,900
Foreign currency transaction loss                      (2,708)                 0            (18,464)                 0
Deprecitation                                           5,278              4,369             10,187              7,336
General and administrative [note 6]                   132,906            104,173            278,081            216,185
Marketing                                              97,400             88,694            162,514            127,797
Research and development                               85,139             70,967            176,784            135,966
- -----------------------------------------------------------------------------------------------------------------------
                                                      318,015            300,103            609,102            519,184
- -----------------------------------------------------------------------------------------------------------------------
Operating loss                                       (313,723)          (276,949)          (598,025)          (418,966)
Other income                                            1,071            (55,546)             1,075            (96,945)
- -----------------------------------------------------------------------------------------------------------------------
Net loss for the period                              (312,652)          (221,403)          (596,950)          (322,021)
- -----------------------------------------------------------------------------------------------------------------------

Comprehensive loss
Net loss for the period                              (310,979)          (221,403)          (595,277)          (322,021)
Foreign currency translation                                0                  0                  0                  0
- -----------------------------------------------------------------------------------------------------------------------
Comprehensive loss for the period                    (310,979)          (221,403)          (595,277)          (322,021)
- -----------------------------------------------------------------------------------------------------------------------

Net loss per common share:
             Basic and diluted                          (0.02)             (0.02)             (0.04)             (0.03)
- -----------------------------------------------------------------------------------------------------------------------

Weighted average number of common shares:
             Basic and diluted                     13,873,904         12,694,621         13,685,225         12,366,171
- -----------------------------------------------------------------------------------------------------------------------

                                       3

eduverse.com

CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                              Six Months
                                                                        June 2000    June 1999
- -----------------------------------------------------------------------------------------------
                                                                                 
OPERATING ACTIVITIES
Loss for the period                                                      (590,450)     (322,021)
Adjustment to reconcile net loss to net cash used in
operating activities:

Common shares to be issued for services rendered
Common shares issued for services rendered                                 90,853         9,594
Common shares issued in lieu of interest expense                            7,014        29,999
Write down and amortization of deferred charge                                           31,900
Depreciation                                                               10,187         7,336
Effect of foreign currency
Stock based compensation
Beneficial conversiton feature of inventory loan
Loss on theft of capital assets
Provision for doubtfull accounts                                           (2,194)

Changes in non-cash working capital items:
Accounts receivable                                                           448      (102,225)
Finished goods inventory                                                    3,919        28,957
Other receivables                                                          10,123
Prepaid expenses                                                          (69,433)        5,651
Accounts payable                                                          (12,349)      (49,146)
Accrued expenses                                                           (1,150)
Unearned revenue                                                                        (20,138)
- -----------------------------------------------------------------------------------------------
Net cash used in operating activities                                    (553,032)     (380,093)

FINANCING ACTIVITIES
Cash proceeds of loans payable
Payments of loans payable                                                 (10,000)      (51,295)
Payments under capital lease obligations                                                 (7,041)
Repayments of royalty payable                                                   0
Issuance of common stock                                                  610,401       758,699
Cash received on common stock to be issued
- -----------------------------------------------------------------------------------------------
Net cash provided by financing activities                                 600,401       700,363

INVESTING ACTIVITIES
Purchase of capital assets                                                 (3,148)      (26,294)
Proceeds from insurance company for theft of capital assets                     0             0

Net cash used in investing activities                                      (3,148)      (26,294)
- -----------------------------------------------------------------------------------------------

Effect of foreign exchange rate changes on cash                                 0             0

Net increase in cash                                                       44,221       293,976
- -----------------------------------------------------------------------------------------------
Cash, beginning of period                                                  43,584        37,757
- -----------------------------------------------------------------------------------------------
Cash, end of period                                                        87,805       331,733
- -----------------------------------------------------------------------------------------------

                                       4

eduverse.com

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - JUNE 30, 2000

1.   ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

eduverse.com  (the "Company") was  incorporated  on October 22, 1991,  under the
laws of the State of Nevada,  as Ward's  Futura  Automotive,  Ltd. The Company's
name was subsequently  changed to Perfect Future, Ltd. On June 11, 1998 its name
was changed to Eduverse Accelerated  Learning Systems,  Inc. and on May 19, 1999
to eduverse.com.

Pursuant  to a series of  transactions  on May 28,  1998 and May 29,  1998,  the
Company  acquired  all of the issued and  outstanding  share  capital of ESL Pro
Systems Inc.  ("ESL") and M&M Information and Marketing  Services Inc.  ("M&M"),
both Nevada companies  incorporated on May 5, 1998 and under common control. The
Company exchanged 2,000,000 common shares and 7,000,000 common shares for all of
the outstanding share capital of ESL and M&M, respectively. As a result of these
acquisitions,  the previous  shareholders of ESL and M&M, as a group, owned more
than  50%  of  the  issued  and  outstanding   voting  shares  of  the  Company.
Consequently,  this  business  combination  has been  accounted for as a reverse
acquisition  whereby  ESL and M&M are deemed to have been  combined  in a manner
similar  to  a  pooling  of  interests,   and  to  have  acquired  the  Company.
Accordingly, these transactions represent the recapitalization of the businesses
of ESL and M&M on a combined basis.

These  consolidated  financial  statements  are  issued  under  the  name of the
Company,  but are a continuation of the combined financial statements of ESL and
M&M and reflect  the  accounts  of ESL and M&M since  their  inception  at their
historic  net book  values.  As at May 29,  1998,  the Company had net  monetary
assets  of $1.  For  purposes  of the  acquisition,  the  fair  value of the net
monetary assets of $1 has been ascribed to the 2,250,000 previously  outstanding
common shares of the Company deemed to be issued in the acquisition.

Description of business

The Company is a  technology-based  company  focused on developing and marketing
interactive  multimedia  educational  software  products.  At June 30, 2000, the
Company's  principal  markets  include Canada and U.S.A.  The Company  generates
revenues from the retail sale of its English language tutorial software products
ENGLISH  PRO. In late 1998,  the Company  started  pioneering  a new  e-commerce
educational  delivery  model  that  provides  users  with free  access to online
education.  The Company  expects to generate the majority of its future revenues
from  advertising  revenues by including an advertiser's  message as part of the
ENGLISH  PRO  tutorial.  In 2000,  1999 and  1998,  the  Company  recognized  no
advertising revenues.

Going concern

The Company's  financial  statements  for the year ended June 30, 2000 have been
prepared on a going concern basis which  contemplates  the realization of assets
and the  settlement  of  liabilities  and  commitments  in the normal  course of
business for the foreseeable future. The company incurred a loss of $310,089 and
$590,450 for the three-and  six-months periods respectively ended June 30, 2000,
and as of June 30, 2000 had a working capital deficiency of $23,606.  Management
recognizes  that the  Company  must obtain  additional  financial  resources  by
raising  capital from  shareholders  or other sources or consider a reduction in
operating costs to enable it to continue  operations  with available  resources.
However,  no  assurances  can be given that the Company  will be  successful  in
raising additional  capital.  Further,  there can be no assurance,  assuming the
Company  successfully  raises  additional  funds,  that the Company will achieve
positive  cash  flow.  If the  Company is unable to obtain  adequate  additional
financing,  management  will  be  required  to  sharply  curtail  the  Company's
operating expenses.  Accordingly,  the Company's continuation as a going concern
is in substantial doubt.

These financial statements do not include any adjustments to the carrying values
and  classification  of assets and liabilities,  which may be necessary,  if the
company is unable to continue its operations.

                                       5

2.   MAJOR CUSTOMERS

For the six-month period ended June 30, 2000, 88% of software sales were derived
from two customers.  At June 30, 2000, the aggregate accounts receivable balance
relating to these customers was $9,255.

For the  same  period  in 1999  72% of  software  sales  were  derived  from one
customer.  At June 30, 1999, the aggregate accounts  receivable balance relating
to this customer was $50,077.

3.   CAPITAL ASSETS

                                                             Accumulated          Net Book
                                                Cost        Depreciation            Value
                                                  $               $                   $
- -------------------------------------------------------------------------------------------
                                                                          
June 30, 2000
Computer equipment                             61,662            24,222            37,440
Furniture and office equipment                 13,060             4,443             8,617
- -------------------------------------------------------------------------------------------
                                               74,722            28,665            46,057
- -------------------------------------------------------------------------------------------

June 30, 1999
Computer equipment                             49,398             9,815            39,583
Furniture and office equipment                 12,968             1,819            11,149
- -------------------------------------------------------------------------------------------
                                               62,366            11,634            50,732
- -------------------------------------------------------------------------------------------

4.   SHARE CAPITAL

[a]  Authorized

The  authorized  capital of the Company  consists of  50,000,000  voting  common
shares  with $0.001 par value and  5,000,000  non-voting  preferred  shares with
$.001 par value.

[b]  Stock offering

In March 2000, the Company announced a financing via private placement  offering
under  Regulation D, Rule 506 of the Securities and Exchange  Commission.  Under
this  financing  the Company sold 276,000  units at $1 per unit,  with each unit
consisting  of one  share of  restricted  common  stock and two  warrants.  Each
warrant  entitles  the holder to purchase  one  additional  share of  restricted
common stock at $2.50 per share and $5.00 per share,  respectively.  The Company
has closed this offering.

[c]  Stock options

During the three- month period ended June 30, 2000 the Company cancelled 115,000
employee  stock options and issued  192,500 in new employee  stock  options.  In
addition, 215,000 employee stock options were re-priced to $0.68 per share.

The following table summarizes  information  about stock options under the plans
outstanding at June 30, 2000:

                                    Number
                   Range of     Outstanding at
                   Exercise        June 30,
                    Prices           2000
                --------------------------------
                     $0.38            150,000
                 $0.67 - $0.75      1,490,000
                --------------------------------
                Total               1,640,000

                                       6

5.   INCOME TAXES

At December  31, 1999 the Company  has a net  operating  loss for United  States
income tax purposes of approximately $190,000 which will begin to expire in 2018
if not utilized.

In addition, the Company has non-capital losses for Canadian income tax purposes
of  approximately  $900,000 at December 31, 1999,  which will begin to expire in
2005 if not utilized.

Deferred income taxes reflect the net effects of temporary  differences  between
the carrying value of assets and  liabilities for financial  reporting  purposes
and the amounts  used for income tax  purposes.  The Company  has  recognized  a
valuation  allowance  of $500,000  equal to the  deferred  tax assets due to the
uncertainty of realizing the benefits of the assets.

6. RECENT PRONOUNCEMENTS FOR SAB 101 AND FIN NO. 44

In December 1999 the Securities and Exchange  Commission issued Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101), which
provides guidance on the recognition,  presentation and disclosure of revenue in
financial  statements of all public  registrants.  The provisions of SAB 101 are
effective for  transactions  beginning in the Company's  year ended December 31,
2000.  The Company has not completed its assessment of the impact of SAB 101 and
has not  determined  its  effect,  if any,  on its  future  reported  results of
operations.

On March  31,  2000,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  involving Stock
Compensation"  ("FIN 44"). This statement is effective for certain  transactions
from December 15, 1998 and is to be applied commencing July 1, 2000. The Company
has not completed its  assessment of the impart of FIN 44 and has not determined
its effect, if any, on its future reported results of operations.

7.   SUBSEQUENT EVENTS

(a)  The Company  will be moving its premises in Canada  effective  September 1,
     2000 to 2-70  East 2nd  Avenue,  Vancouver,  British  Columbia.  Rent  will
     increase to approximately $2,400 per month.

(b)  The Company  borrowed  $50,000 from one of its  officers  and  directors in
     July, 2000.

                                       7

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

     The following discussion contains  forward-looking  statements that involve
risks and  uncertainties.  The Company's actual results could differ  materially
from those discussed in these forward-looking  statements as a result of various
factors,  including those set forth in "risk factors" and elsewhere in this Form
10-QSB.  The  following  discussion  should  be read  in  conjunction  with  the
financial  statements and notes thereto included  elsewhere in this Form 10-QSB.
See "Forward-looking Statements" and "Risk Factors."

Forward-looking Statements

     Except for statements of historical  fact,  certain  information  contained
herein constitutes  "forward-looking  statements,"  including without limitation
statements containing the words "believes,"  "anticipates," "intends," "expects"
and words of similar import, as well as all projections of future results.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors which may cause the actual results or  achievements of the Company
to be  materially  different  from any  future  results or  achievements  of the
Company expressed or implied by such  forward-looking  statements.  Such factors
include,  but are not limited to the following:  the Company's limited operating
history,   competition,   management  of  growth  and   integration,   risks  of
technological  change,  the  Company's  dependence on key  personnel,  marketing
relationships and the other risks and uncertainties described under "Description
of Business - Risk Factors" in this Form 10-QSB.  Certain of the forward looking
statements  contained  in  this  registration   statement  are  identified  with
cross-references to this section and/or to specific risks identified under "Risk
Factors."

RESULTS OF OPERATIONS

Three-and  Six-Month Periods Ended June 30, 2000 Compared to Three-and Six-Month
Periods Ended June 30, 1999

     Revenues.  The Company  derives its  revenues  from the retail sales of its
software  products and  royalties  received  from  distributors  of its software
products.  For the  six-month  period ended June 30, 2000,  88% of the Company's
software  sales were  derived  from two  customers.  Revenues for the three- and
six-months  ended June 30, 2000 were $9,320 and $11,807  respectively.  Compared
with  $24,519  and  $136,141  for the same  periods in 1999.  This  decrease  is
primarily  due to the  Company's  decision to  discontinue  retail  sales of its
ENGLISH PRO 6.2. The Company  anticipates  minimal revenues from retail sales of
its  software  products  during  2000.  In  addition,  it  is  anticipated  that
additional  revenues  from the sale of  advertising  embedded  in the  Company's
Internet-enabled  software product will be generated beginning the third quarter
of 2000.

     Cost of Goods Sold. Cost of Goods Sold consists of expenses associated with
the physical  production of the "boxed"  software  packages that are sold in the
retail market.  During the three-month period ended June 30, 2000, cost of goods
sold increased to $5,028 from $1,365 for the same period in 1999. The difference
is attributed to software packages being returned for the quarter ended June 30,
1999.  During the six-month  period ended June 30, 2000, cost of goods decreased
to $730 from $35,923 for the same periods in 1999. This overall  decrease is due
to the Company's decision to discontinue retail sales of its ENGLISH PRO 6.2.

                                       8

     Amortization  and Write  down of  deferred  charge The  amortized  deferred
charge  represents  a license  fee for the use of ENGLISH  PRO 6.2 and was being
amortized  on a  straight-line  basis over the  three-year  minimum  term of the
license  agreement.  As the Company  does not expect to obtain any future  value
from this licensing  agreement,  the entire  deferred charge balance of $159,800
was  written  off to expense in 1999.  The  license  fee for use of  software is
amortized  on a  straight-line  basis over the  three-year  minimum  term of the
license agreement with Boswell.

     Depreciation  Depreciation  expenses  consists of  depreciation on computer
equipment,  office  equipment  and  furniture.  Capital  assets such as computer
equipment and furniture and office  equipment are depreciated on a straight-line
basis over their estimated useful lives, computer equipment over three years and
furniture and office  equipment over five years.  During the three and six-month
periods  ended June 30,  2000,  depreciation  expenses  increased  to $5,278 and
$10,187  respectively  from $4,369 and $7,336 for the same periods in 1999. This
is due to increased depreciation costs associated with the increase in purchases
of computer equipment by the Company.

     General and Administrative  Expenses.  General and administrative  expenses
primarily consist of management, financial and administrative personnel expenses
and related  costs and  professional  service fees.  General and  administrative
expenses were  $132,906 and $278,081 for the three- and six-month  periods ended
June 30, 2000, which represents an increase of 28% and 29% over the same periods
in 1999.  These increases are due primarily to increases in expenses  related to
hiring of personnel, and travel expenses. In addition, legal and accounting fees
associated  with the  filing on the  Company's  Form  10-QSB  and other  matters
relating  to being a fully  reporting  company.  The  Company  anticipates  that
general and administrative expenses will increase significantly in the next year
due to the implementation of its Internet/Intranet  enabled software initiatives
in South East Asia and South America.

     Marketing  Expenses.  Marketing expenses consist primarily of marketing and
promotional costs relating to the development of the Company's brands as well as
personnel,  travel and other costs. Marketing expenses were $97,400 and $162,514
for the three-and six-month periods respectively ended June 30, 2000, which were
10% and 27%  higher  than those  incurred  for the same  periods in 1999.  These
increases were primarily  attributable to increased travel expenses  incurred to
promote the  Company's  Internet-enabled  software  products in South East Asia,
South America and the reallocation of administrative personnel to marketing. The
Company anticipates  marketing expenses will increase over the next 12 months as
a result  of its  current  initiatives  in  Thailand,  China,  Malaysia  and the
Company's  anticipated  growth  throughout  Asia and  Latin  America.  This will
require extensive travel and promotional activities for its marketing staff. The
Company  intends  to  higher  additional  marketing  staff  during  the next two
quarters.

     Research  and  Development  Expenses.  Research  and  development  expenses
primarily include personnel costs relating to developing the Company's  software
and maintaining  and enhancing the features,  content and  functionality  of the
Company's  Internet  Web site and  related  systems.  Research  and  development
expenses  were  $85,139  and  $176,784  for the  three-  and  six-month  periods
respectively ended June 30, 2000 which represents  increases of 20% and 30% over
the same  periods in 1999.  These  increases  were  primarily  due to  increased
staffing in the research and development team. The Company  anticipates that its
research  and  development  staff will  continue  to grow in 2000 as the Company
focuses  on  improving  and  expanding  the  features  and  availability  of its
Internet/Intranet  network-enabled  software products.  Research and development
costs are expensed as incurred. However, computer software

                                       9

development  costs  incurred  after  technological  feasibility  of a product is
established  are  capitalized.   Technological   feasibility  is  generally  not
established until  substantially all related product development is complete and
the product is released.

     Income Taxes.  No provision  for federal  income taxes has been recorded in
2000 or 1999 as a result of losses.  As of June 30,  2000 the  Company had a net
operating loss for United States income tax purposes of  approximately  $190,000
which will begin to expire in 2018 if not utilized. In addition, the Company has
non-capital losses for Canadian income tax purposes of approximately $900,000 at
June 30, 2000,  which will begin to expire in 2005 if not utilized.  The Company
has  recognized  a valuation  allowance  of $500,000  equal to the  deferred tax
assets due to the uncertainty of realizing the benefits of the asset.

     Other Income.  Other income  during the three-and  six- month periods ended
June 30, 2000  decreased to $1,071 and $1,075  respectively  compared to $55,546
and $96,945 for the same  periods in 1999.  Other  Income  consisted of interest
earned by the  Company on its bank  balances.  The Other  Income in 1999 was the
result of the sale of two web domains by the Company.  It is not anticipated the
Company will be selling web domains in the future.

Liquidity and Capital Resources

     Since  inception,  the Company has financed  operations and met its capital
expenditure  requirements  primarily through private sales of equity securities,
which have resulted in net proceeds of $1,498,707 through June 30, 2000. At June
30,  2000,  the Company had $87,805 in cash and cash  equivalents  and a working
capital deficit of $23,606. On March 2000, the Company announced a financing via
private  placement  offering under  Regulation D, Rule 506 of the Securities and
Exchange Commission.  The offering was for up to 1,000,000 units at $1 per unit,
with  each  unit  consisting  of one share of  restricted  common  stock and two
warrants.  The two warrants  entitle the holder to purchase one additional share
of restricted common stock at $2.50 per share and $5.00 per share, respectively.
As of June 30, 2000 the  Company had  received  $276,000 of this  offering.  The
Company will no longer accept any funds under this offering.

     The  Company  has not  yet  generated  positive  cashflows  from  operating
activities.  Cash used in operating activities was $553,032 and $380,093 for the
six-month  period  ended  June  30,  2000  and  for the  same  period  in  1999,
respectively.  The  Company  does not  expect  to  generate  positive  cash from
operations for the year ending December 31, 2000.

     The Company's investing  activities have consisted of capital  expenditures
totaling and $3,148 for the six-month period ended June 30, 2000 and $26,294 for
the same period in 1999 respectively. The capital expenditures related primarily
to the  acquisition of computer  hardware used to support the Company's  growing
employee base.

     Net cash provided by financing activities was $600,401 and $700,363 for the
six-month  period  ended  June  30,  2000  and  for the  same  period  in  1999,
respectively.  Net cash provided by financing activities resulted primarily from
issuance of capital stock,  which was partially offset by principal  payments on
capital  leases and notes  payable.  The  Company  does  foresee an  increase in
operating  expenses  in  order  to  implement  its   Internet/Intranet   enabled
applications  in Thailand,  China and Malaysia or to continue the upgrade of its
software application. Further, the Company expects to sign additional Ministries
of  Education  and begin  implementations  by the fourth  quarter  of 2000.  The
Company expects to fund these  initiatives with further issuance of common stock
of the Company and from  advertising  revenues that are expected to begin in the
third quarter of 2000.

                                       10

     The Company believes that anticipated  private placements of equity capital
and  anticipated  operating  revenues  will be  adequate  to fund the  Company's
operations  over the next six months.  Thereafter,  the Company  expects it will
need to raise additional capital to meet its long-term  operating  requirements.
The Company may encounter  business  initiatives  that require  significant cash
commitments  or  unanticipated  problems  or  expenses  that  could  result in a
requirement  for  additional  cash  before  that  time.  If the  Company  raises
additional  funds through the issuance of equity or convertible debt securities,
other than to current  shareholders,  the  percentage  ownership  of its current
shareholders   would  be  reduced,   and  such  securities  might  have  rights,
preferences or privileges senior to its common stock.  Additional  financing may
not be available  upon  acceptable  terms,  or at all. If adequate funds are not
available or are not available on  acceptable  terms,  the Company's  ability to
fund its expansion, take advantage of business opportunities, develop or enhance
its  products  or  otherwise   respond  to   competitive   pressures   would  be
significantly   limited,   which  could  significantly  restrict  the  Company's
operations.

Foreign Currency Translation and Hedging

     Foreign  exchange gains (losses) have not been  significant to date and the
Company does not, at this time,  engage in forward  exchange  contracts  for the
purpose of hedging  against  fluctuations  in the exchange  rate between  United
States and Canadian dollars.

     During the third and fourth quarters of 2000, the Company intends to engage
in activities in foreign countries, namely Thailand, China, Malaysia,  Columbia,
Hong Kong and  Taiwan.  These  activities  will  likely  result  in  development
expenses  related to the  installation,  support and  maintenance of ENGLISH PRO
Network Edition on educational networks and sales and marketing expenses related
to  generating  advertising  revenues  in  these  regions.  The  Company  has no
immediate plans for hedging against fluctuations in these currencies.

RISK FACTORS

     The  business of the Company  involves a number of risks and  uncertainties
that could cause actual results to differ  materially from results  projected in
any  forward-looking  statement  in this report.  These risks and  uncertainties
include the risks set forth below. The Company's  securities are speculative and
investment  in the Company's  securities  involves a high degree of risk and the
possibility the investor will suffer the loss of the entire amount invested.

Limited Operating History; History of Losses; Increased Expenses

     The Company  incurred a net loss of  $310,089  and  $590,450  for three and
six-month  periods  respectively  ended June 30, 2000.  Compared to $218,673 and
$322,021 for the same periods in 1999. The Company has had minimal revenue since
inception , it has never been  profitable and there can be no assurance that, in
the future,  the Company will be profitable  on a quarterly or annual basis.  In
addition,  the Company  plans to increase its  operating  expenses to expand its
sales and marketing operations, fund greater levels of research and development,
broaden its  customer  support  capabilities  and  increase  its  administration
resources.  In view of the rapidly  evolving  nature of the Company's  business,
markets   and   limited   operating   history,   the   Company   believes   that
period-to-period comparisons of financial results are not necessarily meaningful
and should not be relied upon as an indication of future performance.

                                       11

Need for Additional Financing

     The Company has accumulated  losses of $2,134,493 since it began operations
in May 1998 and will require additional working capital to complete its business
development  activities  and generate  revenue  adequate to cover  operating and
further  development  expenses.  The  Company  incurred a loss of  $310,089  and
$590,450 for the three- and  six-month  periods  ended June 30, 2000. As of June
30, 2000 had a working capital deficiency of $23,606. Management recognizes that
the Company must obtain additional  financial  resources by raising capital from
shareholders  or other  sources or consider a reduction  in  operating  costs to
enable  it  to  continue  operations  with  available  resources.   However,  no
assurances  can be  given  that  the  Company  will  be  successful  in  raising
additional  capital.  Further,  there can be no assurance,  assuming the Company
successfully raises additional funds that the Company will achieve positive cash
flow. If the Company is unable to obtain adequate financing,  management will be
required to sharply curtail the Company's operating expenses.

PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The  Company  is not a party  to,  and none of the  Company's  property  is
subject to, any material pending or threatened legal proceeding.

ITEM 2.  AGREEMENTS

     During  the  period  ended  June 30,  2000  the  Company  entered  into the
following agreements:

         World Wide Wireless Web (W4)
         China Central  Educational  Technology  Center (CCETC)  1to80.com (Acer
         Group) SINA.com China Education Network Inc.

     The CCETC agreement is a continuation of the Company's  strategy to partner
with Ministry of Education to deliver its educational software to that country's
students.

     The SINA.com,  1to80.com,  W4 and China Education Network  agreements are a
continuation of the Company's marketing activities as a content provider whereby
it  provides  its  English  language  programs  and  co-brands  its  product and
educational  games with web portals,  ISP's and PC  manufacturers.  This program
will generate revenues on an equal basis.  With revenues  projected in the third
quarter of 2000.

         The China Central Educational Technology Center operates directly under
the Ministry of Education of China and is solely  responsible  for deploying new
technology to advance China's educational systems.

     SINA.com is a leading Internet  destination network for Chinese communities
worldwide.  As of April 2000  SINA.com  had over 24 million  average  daily page
views and 5 million registered users.

                                       12

     1to80.com is Asia's first  knowledge  portal.  The Company is part of Acer,
the world's  third  largest PC  manufacturing.  The Acer Group employs more than
32,000 in 120 enterprises spanning 37 countries worldwide.

     World  WideWireless  Web (W4) is building a worldwide  wireless  network of
affiliates (ISPs, corporate networks,  cable companies etc.) supported by direct
access to the North American Internet and telecommunications backbone.

     China Education  Network Inc. is a private  Internet content provider which
holds, with its Chinese partner,  the exclusive rights to develop a web site for
the dissemination of information  derived from a state level research project on
the future of the education system in China.

ITEM 3   RECENT SALES OF UNREGISTERED SECURITIES

     On April 19, 2000 the Company  issued 166,666 shares of common stock to Dan
Brimm at a price per share of $0.75 for an aggregate purchase price of $125,000.
The shares were  issued to a holder  outside  the United  States  pursuant to an
exclusion from registration under Regulation S under the Securities Act.

     On April 19, 2000,  the Company issued 922 shares of common stock to Vaughn
Barbon at a price per share of $1.125 for services  rendered of  $1,037.25.  The
shares  were  issued  to a holder  outside  the  United  States  pursuant  to an
exclusion from registration under Regulation S under the Securities Act.

     On June 5, 2000 the Company  issued  94,764  shares of common stock to Marc
Crimeni  at a price  per  share  of $1.00  for an  aggregate  purchase  price of
$94,764.  Attached to each share are two warrants  which  entitles the holder to
purchase one additional share of restricted  common stock at $2.50 per share for
six  months  from  date of issue  and  $5.00 per share for one year from date of
issue,  respectively.  The shares  were  issued to a holder  outside  the United
States pursuant to an exclusion from  registration  under Regulation S under the
Securities Act.

     On June 5, 2000 the Company  issued  181,236 shares of common stock to Mark
Bruk at a price per share of $1.00 for an aggregate  purchase price of $181,236.
Attached to each share are two  warrants  which  entitles the holder to purchase
one  additional  share of  restricted  common  stock at $2.50  per share for six
months  from  date of issue and $5.00 per share for one year from date of issue,
respectively.  The shares  were  issued to a holder  outside  the United  States
pursuant  to an  exclusion  from  registration  under  Regulation  S  under  the
Securities Act.

     On June 22,  2000,  the Company  issued  100,000  shares of common stock to
Lexington Mercantile Corporation Ltd. at a price per share of $0.68 for services
rendered  of  $68,000.  The shares  were  issued to a holder  outside the United
States pursuant to an exclusion from  registration  under Regulation S under the
Securities Act.

                                       13

ITEM 4  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

Exhibit
Number          Description
- ------          -----------

 27.1           Financial Data Schedule

(b)  Form 8-K

     The registrant did not file any reports on Form 8-K during the three months
ended June 30, 2000.

                                       14

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934,  the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on the 14th day of August,
2000.

                                      EDUVERSE.COM

                                      By: /s/ Mark E. Bruk
                                          --------------------------------------
                                          Mark E. Bruk, President, Chief
                                          Executive Officer and Treasurer

                                       15

                                 EXHIBIT INDEX

Exhibit
Number          Description
- ------          -----------

 27.1           Financial Data Schedule

  

                     5

                   6-MOS
                           DEC-31-2000
                                JUN-30-2000
                                          87,805
                                         0
                                   10,572
                                    (4,098)
                                     13,377
                               196,547
                                          46,057
                                  10,187
                                 242,604
                          217,310
                                              0
                                0
                                          0
                                        14,193
                                           0
                   242,604
                                         11,807
                                11,807
                                             (730)
                                  602,602
                                     0
                                     0
                                   0
                               (590,450)
                                         0
                           (590,450)
                                       0
                                      0
                                            0
                                  (590,450)
                                      (0.02)
                                    (0.02)