Filed pursuant to
Rule 424(b)(3)
Registration Statement
No.: 333-86331

Prospectus Supplement No. 7, dated August 9, 2001
(To the Prospectus filed December 28, 2000, as supplemented August 3, 2001, June
16, 2001, May 1, 2001, April 6, 2001, March 15, 2001 and March 14, 2001.)

UNIVERSE2U INC.

2,076,000 Shares of Common Stock

On August 6, 2001, Universe2U Inc. (referred to herein as "we" or the "Company")
filed with the Securities and Exchange Commission a Registration Statement on
Form S-3 registering 6,750,000 shares of Company common stock. The following is
a description of the transaction that the Company entered into in connection
with the registration of such shares.

General

On August 1, 2001, we entered into a common stock purchase agreement with Fusion
Capital Fund II, LLC pursuant to which Fusion agreed to purchase on each trading
day during the term of the agreement, $15,000 of our common stock or an
aggregate of $12.0 million. The $12.0 million of common stock is to be purchased
over a 40 month period, subject to a six month extension or earlier termination
at our discretion. The purchase price of the shares of common stock will be
equal to a price based upon the future market price of the common stock without
any fixed discount to the market price. We have the right to set a minimum
purchase price at any time as described below.

Purchase of Shares under the Common Stock Purchase Agreement

Under the common stock purchase agreement, on each trading day Fusion is
obligated to purchase a specified dollar amount of our common stock. Subject to
our right to suspend such purchases at any time, and our right to terminate the
agreement with Fusion at any time, each as described below, Fusion shall
purchase on each trading day during the term of the agreement $15,000 of our
common stock. This daily purchase amount may be decreased by us at any time. We
also have the right to increase the daily purchase amount at any time, provided
however, we may not increase the daily purchase amount above $15,000 unless our
stock price is above $7.00 per share for five consecutive trading days. The
purchase price per share is equal to the lesser of:

. the lowest sale price of our common stock on the purchase date; or

. the average of the three (3) lowest closing sale prices of our common stock
during the fifteen (15) consecutive trading days prior to the date of a purchase
by Fusion.

The purchase price will be adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, or other similar transaction occurring during
the trading days in which the closing bid price is used to compute the purchase
price. Notwithstanding the foregoing, Fusion may not purchase shares of common
stock under the common stock purchase agreement if Fusion or its affiliates
would beneficially own more than 4.9% of our then aggregate outstanding common
stock immediately after the proposed purchase. If the 4.9% limitation is ever

reached we have the option to increase this limitation to 9.9%. If the 9.9%
limitation is ever reached, this limitation will not limit Fusion's obligation
to fund the daily purchase amount.

The following table sets forth the number of shares of our common stock that
would be sold to Fusion under the common stock purchase agreement at varying
purchase prices:

Percentage
Outstanding After
Number of Shares to be Giving Effect to the
Assumed Purchase Price Issued if Full Purchase Issuance to Fusion(1)

$ 1.00 12,000,000(2) 28%
$ 2.00 6,000,000(2) 14%
$ 2.50 4,800,000(2) 11%
$ 5.00 2,400,000(2) 6%
$ 7.00 1,714,286 4%
$ 10.00 1,200,000 3%

(1) Based on 43,376,747 shares outstanding as of August 1, 2001. Includes the
issuance of 375,000 shares of common stock issued to Fusion as a commitment fee
and the number of shares issuable at the corresponding assumed purchase price
set forth in the adjacent column.

(2) We estimate that we will issue no more than 6,000,000 shares to Fusion under
the common stock purchase agreement, including the shares issuable as a
commitment fee, all of which are included in this offering. If more than
6,000,000 shares are issuable to Fusion under the common stock purchase
agreement, we have the right to terminate the agreement without any payment or
liability to Fusion.

Minimum Purchase Price

We have the right to set a minimum purchase price ("floor price") at any time.
Currently, the floor price is $2.50. We can increase or decrease the floor price
at any time upon one trading day prior notice to Fusion. Fusion shall not be
permitted or obligated to purchase any shares of our common stock in the event
that the purchase price is less than the then applicable floor price as
established by us.

Our Right To Suspend Purchases

We have the unconditional right to suspend purchases at any time for any reason
effective upon one trading day's notice. Any suspension would remain in effect
until our revocation of the suspension. To the extent we need to use the cash
proceeds of the sales of common stock under the common stock purchase agreement
for working capital or other business purposes, we do not intend to restrict
purchases under the common stock purchase agreement.

Our Right To Increase and Decrease the Daily Purchase Amount

We have the unconditional right to decrease the daily amount to be purchased by
Fusion at any time for any reason effective upon one trading day's notice. We
also have the right to increase the daily purchase amount at any time for any
reason; provided however, we may not increase the daily purchase amount above
$15,000 unless our stock price has been above $7.00 per share for five
consecutive trading days. For any trading day that the sale price of our common
stock is below $7.00, the daily purchase amount shall not be greater than
$15,000.

Our Termination Rights

We have the unconditional right at any time for any reason to give notice to
Fusion terminating the common stock purchase agreement. Such notice shall be
effective one trading day after Fusion receives such notice.

Effect of Performance of the Common Stock Purchase Agreement on our Shareholders

All shares registered in this offering will be freely tradable. It is
anticipated that shares registered in this offering will be sold over a period
of up to 40 months from the date of this prospectus. The sale of a significant
amount of shares registered in this offering at any given time could cause the
trading price of our common stock to decline and to be highly volatile. Fusion
may ultimately purchase all of the shares of common stock issuable under the
common stock purchase agreement, and it may sell some, none or all of the shares
of common stock it acquires upon purchase. Therefore, the purchases under the
common stock purchase agreement may result in substantial dilution to the
interests of other holders of our common stock. However, we have the right at
any time for any reason to: (1) reduce the daily purchase amount, (2) suspend
purchases of the common stock by Fusion and (3) terminate the common stock
purchase agreement.

No Short-Selling or Hedging by Fusion

Fusion has agreed that neither it nor any of its affiliates shall engage in any
direct or indirect short-selling or hedging of our common stock during any time
prior to the termination of the common stock purchase agreement.

Events of Default

Generally, Fusion may terminate the common stock purchase agreement without any
liability or payment to the Company upon the occurrence of any of the following
events of default:

. if for any reason the shares offered by this prospectus cannot be sold
pursuant to this prospectus for a period of ten consecutive trading days or for
more than an aggregate of 30 trading days in any 365-day period;

. suspension by our principal market of our common stock from trading for a
period of ten consecutive trading days or for more than an aggregate of 30
trading days in any 365-day period;

. our failure to satisfy any listing criteria of our principal market for a
period of ten consecutive trading days or for more than an aggregate of 30
trading days in any 365-day period;

. the transfer agent's failure for five trading days to issue to Fusion
shares of our common stock which Fusion is entitled to under the common stock
purchase agreement;

. any material breach of the representations or warranties or covenants
contained in the common stock purchase agreement or any related agreements which
has or which could have a material adverse affect on us subject to a cure period
of ten trading days;

. a default by us of any payment obligation in excess of $1.0 million; or

. any participation or threatened participation in insolvency or bankruptcy
proceedings by or against us.

Commitment Shares Issued to Fusion

Under the terms of the common stock purchase agreement Fusion has received
375,000 shares of our common stock, and warrants to purchase 375,000 shares of
our common stock at an exercise price of $4.00 per share, as a commitment fee.
Unless an event of default occurs, Fusion must maintain ownership of 375,000
shares of our common stock (i) for a period of 40 months from the date of the
common stock purchase agreement, or (ii) until such date as the common stock
purchase agreement is terminated.

No Variable Priced Financings

Until the termination of the common stock purchase agreement, we have agreed not
to issue, or enter into any agreement with respect to the issuance of, any
variable priced equity or variable priced equity-like securities unless we have
obtained Fusion's prior written consent.

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