As filed with the Securities and Exchange Commission on May 6, 1999
                                                     Registration No. 333-67871
===============================================================================
    
                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC  20549
                              __________________________

                                      FORM SB-2
                                Registration Statement
                           Under the Securities Act of 1933
                              __________________________

                            HOUSTON INTERWEB DESIGN, INC.
               (Exact name of Registrant as specified in its charter) 
   
                                  (AMENDMENT NO. 2)
    

          TEXAS                          7310                   76-0532709   
(State or other jurisdiction      (Primary Standard          (I.R.S. Employer
     of incorporation or      Industrial Classification   Identification Number)
        organization)               Code Number)       

                                                       HARRY L. WHITE
    HOUSTON INTERWEB DESIGN, INC.               HOUSTON INTERWEB DESIGN, INC.
   1770 ST. JAMES PLACE, SUITE 420                1770 ST. JAMES, SUITE 420
        HOUSTON, TEXAS 77056                        HOUSTON, TEXAS 77056
           (713) 627-9494                              (713) 627-9494
   (Address and telephone number            (Name, address and telephone number
  of principal executive offices)                  of agent for service)

                                      Copies To:
                                MARGARET C. FITZGERALD
                               BREWER & PRITCHARD, P.C.
                                1111 BAGBY, 24TH FLOOR
                                HOUSTON, TEXAS  77002
                                 PHONE (713) 209-2911
                               FACSIMILE (713) 209-2921
                                  _________________

     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective. 

     If this Form is filed to register additional securities for an offering 
pursuant to Rule 462(b) under the Securities  Act, check the following box 
and list the Securities Act registration statement number of earlier 
effective registration statement for the same offering.  [ ]

     If this Form is a post-effective amendment filed pursuant to Rule 462(c) 
under the Securities Act, check the following box and list the Securities Act 
registration statement number of the earlier effective registration statement 
for the same offering.  [ ]

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) 
under the Securities Act, check the following box and list the Securities Act 
registration statement number of the earlier effective registration statement 
for the same offering.  [ ]

     If delivery of the prospectus is expected to be made pursuant to Rule 
434, please check the following box. [ ]

                           CALCULATION OF REGISTRATION FEE
   


 TITLE OF EACH CLASS OF     AMOUNT    PROPOSED MAXIMUM     PROPOSED MAXIMUM       AMOUNT OF
    SECURITIES TO BE        BEING      OFFERING PRICE         AGGREGATE         REGISTRATION
       REGISTERED         REGISTERED    PER SHARE(1)     OFFERING PRICE(1)(2)       FEE(3)
                                                                   
  Common Stock              252,633       .0156799            $18,334.51            $100.00
  TOTAL . . . . . . .       252,633       .0156799            $18,334.51            $100.00

                                  _________________

(1)  Estimated solely for the purpose of calculating the registration fee
     pursuant to Rule 457.
(2)  The book value of the Common Stock, calculated pursuant to Rule 457(f).
(3)  Previously paid with the original filing of the Form SB-2 on November 24,
     1998. 
    
                                  _________________

     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

   
                       SUBJECT TO COMPLETION, DATED MAY 6, 1999



                            HOUSTON INTERWEB DESIGN, INC.

        RESALE OF 252,633 SHARES OF COMMON STOCK HELD BY SELLING STOCKHOLDERS

     This prospectus relates to the resale of 252,633 shares of company 
common stock currently outstanding, which may be sold by the selling 
stockholders. 

     The company has been advised that 166,667 shares of company common stock 
which were sold on February 1999 were sold without having filed a 
registration statement which may have been required.  Accordingly, those 
people who purchased those shares may have the right to rescind those 
purchases.  Our liability, if any, under the Securities Act of 1933, as 
amended (the "1933 Act") for the sale of those shares may not be limited by 
this rescission offer.  We offer to each purchaser of those shares the right 
to rescind this purchase upon the terms and conditions as set forth below.  
See "The Rescission Offer."  The rescission offer will expire on __________, 
1999, unless we extend it.

     We do not make any recommendation about whether those purchasers should 
accept or reject the rescission offer.  Acceptance or rejection of this offer 
may not terminate a purchaser's right to bring a civil action against the 
Company for its prior failure to register the Common Stock, as the case may 
be, under federal and applicable state securities laws.

     Currently, there is no market for the company's shares.
    

                                 ____________________

     THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.  SEE "RISK FACTORS" 
BEGINNING ON PAGE 2.
                                 ____________________

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES 
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF 
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.  ANY REPRESENTATION TO THE CONTRARY 
IS A CRIMINAL OFFENSE.

                                 ____________________

     WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY 
REPRESENTATION ABOUT THE COMPANY THAT DIFFERS FROM, OR ADDS TO, THE 
INFORMATION IN THIS PROSPECTUS OR IN OUR DOCUMENTS THAT WE FILED WITH THE 
SEC.  ACCORDINGLY, IF ANYONE DOES GIVE YOU DIFFERENT OR ADDITIONAL 
INFORMATION YOU SHOULD NOT RELY ON IT.  IF YOU ARE IN A JURISDICTION WHERE IT 
IS UNLAWFUL TO BUY THE SECURITIES OFFERED BY THIS PROSPECTUS, OR IF YOU ARE A 
PERSON TO WHOM IT IS UNLAWFUL TO DIRECT SUCH ACTIVITIES, THEN THE OFFER 
PRESENTED BY THIS PROSPECTUS DOES NOT EXTEND TO YOU.  THE INFORMATION IN THE 
PROSPECTUS SPEAKS ONLY AS OF THIS DATE UNLESS THE INFORMATION SPECIFICALLY 
INDICATES THAT ANOTHER DATE APPLIES.  

   
                   The date of this prospectus is May 6, 1999. 
    

   
                                  TABLE OF CONTENTS


                                                                                 PAGE
                                                                                 ----
                                                                              
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

   POSSIBLE VIOLATION OF SECURITIES LAWS; RESCISSION OFFER . . . . . . . . . . . . .2
   WE HAVE A LIMITED OPERATING HISTORY WITH A HISTORY OF LOSSES AND
   WE ANTICIPATE LOSSES UNTIL AT LEAST THE YEAR 2000 . . . . . . . . . . . . . . . .2
   OUR WORKING CAPITAL REQUIREMENTS MAY REQUIRE US TO PURSUE ADDITIONAL
   FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
   OUR FINANCIAL STATEMENTS HAVE BEEN PREPARED ASSUMING WE WILL BE ABLE TO
   CONTINUE AS A GOING CONCERN . . . . . . . . . . . . . . . . . . . . . . . . . . .3
   AS AN ADVERTISING MEDIUM THE INTERNET IS STILL AN EVOLVING MARKET . . . . . . . .3
   OUR BUSINESS MODEL IS UNPROVEN AND DEPENDS ON THE MARKET'S ACCEPTANCE OF OUR
   SITEBLAZER NETWORK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
   ACCEPTANCE OF OUR SITEBLAZER NETWORK. . . . . . . . . . . . . . . . . . . . . . .3
   RISK OF SYSTEM FAILURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
   OUR ABILITY TO ADAPT TO RAPIDLY CHANGING TECHNOLOGY . . . . . . . . . . . . . . .3
   VARIOUS FACTORS RELATING TO COMPETITION IN THE INTERNET INDUSTRY. . . . . . . . .4
   OUR ABILITY TO EFFECTIVELY MANAGE GROWTH IN OUR OPERATIONS. . . . . . . . . . . .5
   WE ARE DEPENDENT ON CERTAIN KEY PERSONNEL . . . . . . . . . . . . . . . . . . . .5
   WE DEPEND ON THIRD PARTIES TO DISTRIBUTE OUR PRODUCTS AND SERVICES. . . . . . . .5
   OUR BUSINESS IS DEPENDENT ON THE MAINTENANCE OF THE INTERNET INFRASTRUCTURE . . .5
   WE ARE DEPENDENT ON OUR PROPRIETARY RIGHTS. . . . . . . . . . . . . . . . . . . .5
   RISKS OF INFRINGEMENT IN INTERNET-RELATED INDUSTRIES. . . . . . . . . . . . . . .6
   POSSIBLE ADDITIONAL TAX BURDENS . . . . . . . . . . . . . . . . . . . . . . . . .6
   GOVERNMENT REGULATION OF INTERNET ACTIVITIES. . . . . . . . . . . . . . . . . . .6
   SHARES ELIGIBLE FOR FUTURE SALE . . . . . . . . . . . . . . . . . . . . . . . . .6
   THERE IS NO MARKET FOR OUR COMMON STOCK AND IF ONE DEVELOPS IT WILL LIKELY BE
   VOLATILE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
   PENNY STOCK REGULATIONS MAY DECREASE YOUR ABILITY TO SELL OUR COMMON STOCK. . . .6
   CONTINUED CONTROL BY PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS . . . . . . .7
   LACK OF DISINTERESTED, INDEPENDENT DIRECTORS. . . . . . . . . . . . . . . . . . .7

Note Regarding Forward-looking Statements. . . . . . . . . . . . . . . . . . . . . .7
Rescission Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Management's Discussion And Analysis of Financial Condition And Results of
Operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Principal Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Description of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Shares Eligible For Future Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-1

    



                                  PROSPECTUS SUMMARY

     To understand this offering fully, you should read the entire prospectus 
carefully, including the risk factors and financial statements.  The 
company's principal executive office is located at 1770 St. James Place, 
Suite 420, Houston, Texas 77056, (713) 627-9494.  Unless otherwise indicated, 
this prospectus reflects a 165-for-one forward stock split that occurred in 
August 1998, and assumes purchasers being offered the right to rescind will 
elect to retain their shares.

   
                                     KEY FACTS

                                         
The Company . . . . . . . . . . . . . . . . Houston Interweb Design is a web
                                            site development company
                                            specializing in the design,
                                            creation and marketing of cost-
                                            effective Internet products.

Common stock to be resold . . . . . . . . . 252,633 shares by selling stockholders.

Common stock subject to rescission offer. . 166,667 shares

Common stock outstanding  . . . . . . . . . 16,448,300 shares

Risk factors  . . . . . . . . . . . . . . . An investment in the shares of common
                                            stock involves a high degree of risk.
                                            Prospective investors should review
                                            carefully the information set forth
                                            under "Risk Factors" beginning on page 2.

No proceeds . . . . . . . . . . . . . . . . The resale will result in no proceeds
                                            to the company.

Lack of market. . . . . . . . . . . . . . . There is currently no market for the
                                            common stock, and there is no
                                            assurance that any market will
                                            develop. If a market develops for the
                                            company's securities, it will likely
                                            be limited, sporadic and highly
                                            volatile. 

    

SUMMARY FINANCIAL DATA

     THE FINANCIAL INFORMATION PRESENTED BELOW IS DERIVED FROM THE AUDITED 
FINANCIAL STATEMENTS OF THE COMPANY  FOR THE PERIOD FROM INCEPTION (AUGUST 9, 
1996) THROUGH JULY 31, 1997, AND FOR THE YEAR ENDED JULY 31, 1998, AND 
UNAUDITED INFORMATION FOR THE SIX MONTHS ENDED JANUARY 31, 1998, AS COMPARED 
TO THE SIX MONTHS ENDED JANUARY 31, 1999.


                                                   AUDITED                                UNAUDITED              
                                                   -------                                ---------
                                       PERIOD ENDED       YEAR ENDED       SIX MONTHS ENDED      SIX MONTHS ENDED
                                      JULY 31, 1997      JULY 31, 1998     JANUARY 31, 1998      JANUARY 31, 1999
                                      -------------      -------------     ----------------      ----------------
                                                                         
Revenues  . . . . . . . . . . . .       $185,994           $628,070             $262,437              $258,747
Total Expenses  . . . . . . . . .        225,824          1,402,169              277,069               770,029
                                        --------          ---------             --------             ---------
   Income (Loss) Before 
   Federal Income Tax . . . . . .        (69,830)          (774,099)             (14,632)             (511,282)
Federal Income Tax (Benefit)  . .         (4,998)             7,496                1,045                 2,498
Net Loss  . . . . . . . . . . . .       $(64,832)          $(81,595)            $(13,587)            $(508,784)
                                        --------          ---------             --------             ---------
                                        --------          ---------             --------             ---------




BALANCE SHEET DATA
                                   JULY 31, 1997           JULY 31, 1998          JANUARY 31, 1999
                                   -------------           -------------          ----------------
                                                                         
Working Capital Deficits  . .        $(74,061)              $(106,092)              $(297,219)
Total Assets  . . . . . . . .          88,338                 159,369                 113,235
Long-Term Liabilities . . . .              --                      --                      --
Shareholders' Deficit . . . .         (60,832)                (92,427)               (278,870)


   
                                 RISK FACTORS

POSSIBLE VIOLATION OF SECURITIES LAWS; RESCISSION OFFER

     The company sold 166,667 shares of common stock in February 1999.  The 
securities sold in February did not have a registration statement on file 
with the SEC.  The federal securities laws require registration of securities 
unless an appropriate exemption from the registration requirements of those 
laws is available.  If an exemption did not exist for the sale of these 
securities, the company may have violated the registration requirements.  If 
so, purchasers could seek rescission of their purchase and recover money paid 
for the securities.  The company makes no admission of any violation of 
federal securities laws and no investor has sought rescission of any 
purchase.  However, the company intends to make a rescission offer to the 
February investors by means of this prospectus.  Should those purchasers 
accept the rescission offer, the company would need to pay those investors up 
to approximately $250,000 (plus interest and other costs).  

WE HAVE A LIMITED OPERATING HISTORY WITH A HISTORY OF LOSSES AND WE 
ANTICIPATE LOSSES UNTIL AT LEAST THE YEAR 2000

     We were incorporated in August 1996, and our prospects must be 
considered in light of the risks, expenses and difficulties frequently 
encountered by companies with limited operating histories, particularly 
companies in the new and rapidly evolving markets for the Internet and 
Internet services.  Although we have experienced revenue growth, growth rates 
may not be sustained and are not necessarily indicative of future operating 
results.  Since our inception, we have had an accumulated deficit of 
$1,355,211 and as of January 31, 1999, had cash in the amount of $43,640.  
Given the level of planned operating and capital expenditures, we anticipate 
that we will continue to incur operating losses at least into the year 2000.  
If revenues do not grow at anticipated rates, if increases in operating 
expenses precede or are not subsequently followed by commensurate increases 
in revenues, or if we are unable to adjust operating expense levels 
accordingly, our business, results of operations, and financial condition 
will be materially and adversely affected.

OUR WORKING CAPITAL REQUIREMENTS MAY REQUIRE US TO PURSUE ADDITIONAL FINANCING

     At January 31, 1999, we had a working capital deficit of $297,219.  Our 
ability to maintain adequate working capital will be largely dependent upon 
our results of operations.  Net cash used in the operation of our business 
was $275 for the period from inception (August 9, 1996) to July 31, 1997, as 
compared to net cash provided by operating activities of $3,169 for the year 
ended July 31, 1998.  For the six-month period ended January 31, 1998, net 
cash provided in the operation of our business was $39,228 and as compared to 
net cash used in the operation of our business of $182,992 for the six months 
ended January 31, 1999. We may need to raise additional capital to fund 
future operations and to satisfy future capital requirements.  If we are 
unable to secure sufficient capital in the future, our ability to pursue our 
business strategy will be limited and our results from operations may be 
impaired.  The failure to raise any needed additional funds will likely have 
a material adverse effect on our company.  In addition, it is possible that 
raising additional funds will result in substantial additional dilution.

                                       2


OUR FINANCIAL STATEMENTS HAVE BEEN PREPARED ASSUMING WE WILL BE ABLE TO 
CONTINUE AS A GOING CONCERN

     The financial statements included herein have been prepared assuming the 
company will be able to continue as a going concern.  The company had a 
working capital deficit of $106,092 and a stockholders' deficit of $92,427 at 
July 31, 1998, and experienced significant losses in fiscal 1998 which raise 
doubts about the Company's ability to generate sufficient cash flow to meet 
its obligations on a timely basis, to obtain additional financing or capital 
and to refinance its debt and ultimately attain profitable operations.  

AS AN ADVERTISING MEDIUM THE INTERNET IS STILL AN EVOLVING MARKET

     The market for the development and design of web sites has only recently 
begun to develop, is rapidly evolving and is characterized by an increasing 
number of market entrants.  As is typical of a new and rapidly evolving 
industry, demand and market acceptance for recently introduced products and 
services are subject to a high level of uncertainty.  Since we expect to 
derive substantially all of our revenues in the foreseeable future from the 
development and design of web sites, our future success is highly dependent 
on the increased use of the Internet.  The Internet as an advertising medium 
has not been available for a sufficient period to gauge its effectiveness as 
compared with traditional advertising media.  The utilization of Internet web 
sites, particularly by those entities that have historically relied upon 
traditional media for advertising, requires the acceptance of a new way of 
conducting business and exchanging information.  If the market for the 
development and design of web sites fails to develop or develops more slowly 
than expected, our business, results of operations and financial condition 
could be materially and adversely affected.  There are no widely accepted 
standards for the measurement of the effectiveness of an Internet web site as 
an advertising medium.

OUR BUSINESS MODEL IS UNPROVEN AND DEPENDS ON THE MARKET'S ACCEPTANCE OF OUR 
SITEBLAZER NETWORK

     Our business model is to generate revenues by designing and developing 
Internet web sites and placing these web sites in the SITEBLAZER network.  
The profit potential of our business model is unproven, and, to be 
successful, we must, among other things, develop and market programs that 
achieve broad market acceptance and recognition by our customers, Internet 
advertisers, commerce partners and Internet users.  Market acceptance of the 
SITEBLAZER network will depend, in large part, on the market's acceptance of 
our search engine.  Our ability to generate significant revenues from 
SiteBlazer.com will depend, in part, on the development of the SITEBLAZER 
network and our ability to attract search engines and have web sites generate 
sufficient user traffic with characteristics that are attractive to such 
search engines.  

RISK OF SYSTEM FAILURE

     The performance of our servers and networking hardware and the Internet 
infrastructure is critical to our business and reputation and our ability to 
attract web users, new customers and commerce partners to our web sites.  Any 
system failure that causes an interruption in service or a decrease in 
responsiveness of our web sites could result in less traffic on our web sites 
and, if sustained or repeated, could impair our reputation and the 
attractiveness of our brand name.

     Our servers are vulnerable to computer viruses, break-ins, and similar 
disruptions from unauthorized tampering.  In addition, our operations are 
dependent upon our ability to protect our computer systems against damage 
from fire, power loss, telecommunications failures, vandalism and other 
malicious acts, and similar unexpected adverse events.  Finally, to the 
extent we do not effectively address any capacity constraints, such 
constraints could cause system failure.  The occurrence of any of these 
events could result in interruptions, delays or cessation in services.

OUR ABILITY TO ADAPT TO RAPIDLY CHANGING TECHNOLOGY

     The market in which we compete is characterized by rapidly changing 
technology, evolving industry standards, frequent new products and services 
and changing customer demands.  Accordingly, our success will depend on our 
ability to adapt to rapidly changing technologies and industry standards, and 
our ability to continually improve the speed, performance, features, ease of 
use and reliability of our server and networking system in response to both 
evolving demands of the marketplace and competitive service and product 
offerings.  

     We continually strive to incorporate new technology into our web sites 
for the benefit of our customers, visitors and commerce partners.  
Introducing new technology into our systems involves numerous technical 
challenges, substantial amounts of personal resources and often times takes 
many months to complete. The continuing and uninterrupted performance of our 
computer system is critical to the success of our business.

                                       3



VARIOUS FACTORS RELATING TO COMPETITION IN THE INTERNET INDUSTRY

     The market for customers, visitors and related products and services is 
intensely competitive and such competition is expected to continue to 
increase. There are no substantial barriers to entry in this market and we 
believe that our ability to compete depends upon many factors within and 
beyond our control, including:

     -    the timing and market acceptance of new product and services 
          developed by us and our competitors,

     -    customer service and support,

     -    sales and marketing efforts,

     -    the ease of use,

     -    performance,

     -    price, and

     -    reliability of our products and services.

     -    We also compete with:

     -    Internet content providers and Internet service providers, 

     -    web directories,

     -    search engines,

     -    shareware archives,

     -    content sites,

     -    commercial online services and sites maintained by Internet service
          providers,

     -    thousands of Internet sites operated by individuals, and

     -    government and educational institutions.

     We believe that the number of Internet companies relying on revenues 
from their company web sites will increase substantially in the future.  
Accordingly, we will likely face increased competition, resulting in 
increased pricing pressures on our web site design rates.

     Many of our existing and potential competitors, including web site 
designers have longer operating histories in the Internet market, greater 
name recognition, larger customer bases and significantly greater financial, 
technical and marketing resources.  As a result, they may be able to respond 
more quickly to new or emerging technologies and changes in customer 
requirements, or to devote greater resources to the development, promotion 
and sale of their products and services.  Such competitors are able to 
undertake more extensive marketing campaigns for their brands and services, 
adopt more aggressive pricing policies and make more attractive offers to 
potential employees, distribution partners and commerce companies.

     We also expect that competition may increase as a result of industry 
consolidation.  In addition, current and potential competitors have 
established or may establish cooperative relationships among themselves or 
with third parties to increase the comprehensive set of services offered to 
customers. Accordingly, it is possible that new competitors or alliances 
among existing or potential competitors may emerge and rapidly acquire 
significant market share. Increased competition is likely to result in price 
reductions, reduced gross margins and loss of market share, any of which 
would have a material adverse effect on our business, results of operations 
and financial condition.

                                       4



OUR ABILITY TO EFFECTIVELY MANAGE GROWTH IN OUR OPERATIONS

     We have experienced rapid growth in our operations.  This rapid growth 
has placed, and is expected to continue to place, a significant strain on our 
managerial, operational and financial resources.  We have grown from three 
employees as of August 31, 1996, to 21 employees as of May 3, 1999.  We 
expect that the number of employees will continue to increase for the 
foreseeable future, including the hiring of new programmers, graphic 
designers and other personnel.  Furthermore, we must continue to improve our 
financial and management controls, reporting systems and procedures, and 
expand, train and manage our work force.   

WE ARE DEPENDENT ON CERTAIN KEY PERSONNEL

     Our future success depends, in significant part, upon the continued 
service of our key technical, sales and senior management personnel, 
particularly Harry L. White, chief executive officer and chairman of the 
board of directors, Lee A. Magness, chief financial officer, and Richard J. 
Finn, chief technology officer, all of whom have entered into employment 
agreements which expire in August 2001. The loss of the services of one or 
more of the our key personnel could have a material adverse effect on our 
business, results of operations and financial condition.  We do not maintain 
"key man" life insurance policies for Messrs. White, Magness and Finn.  Our 
future success also depends on our continuing ability to attract and retain 
highly qualified technical, sales and marketing, customer support, financial 
and accounting, and managerial personnel. 

WE DEPEND ON THIRD PARTIES TO DISTRIBUTE OUR PRODUCTS AND SERVICES

     We rely on arrangements with independent resellers and licensees to 
market and distribute our software products.  Under our arrangements with 
independent resellers and licensees, we typically grant a non-exclusive 
license to distribute our software technology and restrict the 
reseller's/licensee's ability to distribute software programs in competition 
with us.  These independent resellers and licensees have only recently begun 
to offer our products and, as such, have extremely limited experience in 
distributing our software technology.  We currently have agreements with 
Websource Media, L.L.C. Harry Bauge, Eduardo F. Azcoitia, West Marketing 
Services Corp. and Axis Technologies Corp.  For the fiscal year ended July 
31, 1998, Websource Media and Bauge accounted for an aggregate of $288,572 or 
46% of revenues.  The loss of one or more of the licensees or resellers that 
represent a material portion of our revenues could have a material adverse 
effect on our business, results of operations and financial condition.  In 
addition, the non-payment or late payment of amounts due by a significant 
licensee or reseller could have a material adverse effect on our business.  
We cannot accurately predict the timing or the extent of the success of these 
resellers and licensees.  

OUR BUSINESS IS DEPENDENT ON THE MAINTENANCE OF THE INTERNET INFRASTRUCTURE

     Our success will depend, in large part, upon the maintenance of the 
Internet infrastructure, such as a reliable network backbone with the 
necessary speed, data capacity and security.  To the extent that the Internet 
continues to experience increased numbers of users, and frequency of use or 
increased requirements of users, the Internet infrastructure may not continue 
to be able to support the demands placed on it and the performance or 
reliability of the Internet may be adversely affected.  Furthermore, the 
Internet has experienced a variety of outages and other delays as a result of 
damage to portions of its infrastructure, and such outages and delays could 
adversely affect the web sites of customers utilizing our programs and the 
level of traffic on such web sites. In addition, the Internet could lose its 
viability as a form of media due to delays in the development or adoption of 
new standards and protocols that can handle increased levels of activity.  If 
the necessary infrastructure, standards or protocols or complimentary 
products, services or facilities are not developed, or if the Internet does 
not become a viable commercial medium, our business will be materially and 
adversely affected.  If such infrastructures, standards or protocols or 
complimentary products, services or facilities are developed, we may be 
required to incur substantial expenditures in order to adapt our solutions to 
changing or emerging technologies.

WE ARE DEPENDENT ON OUR PROPRIETARY RIGHTS

     We regard our intellectual property as critical to our success, and we 
expect to rely upon trademark, service mark, copyright and trade secret laws 
in the United States and other jurisdictions to protect our proprietary 
rights.  If our trademark registrations are not approved or granted due to 
the prior issuance of trademarks to third parties or for other reasons, we 
may not be able to enter into arrangements with such third parties on 
commercially reasonable terms allowing the company to continue to use such 
trademarks. Trademark, copyright and trade secret protection may not be 
available in every country in which our programs are available.  In addition, 
although we plan to protect our proprietary rights through confidentiality 
agreements with employees, consultants, advisors, licensees, resellers and 
others, the confidentiality agreements may not provide adequate protection 
for our proprietary rights.

                                       5



RISKS OF INFRINGEMENT IN INTERNET-RELATED INDUSTRIES

     Legal standards relating to the validity, enforceability and scope of 
protection of certain proprietary rights in Internet-related industries are 
uncertain and still evolving, and accordingly, the future viability or value 
of any of our proprietary rights is unknown.   Any infringement or 
misappropriation by third parties, should it occur, could have a material 
adverse effect on our business.  Furthermore, our business activities may 
infringe upon the proprietary rights of others and other parties may assert 
infringement claims against us.  From time to time we expect to be subject to 
claims in the ordinary course of our business, including claims of alleged 
infringement of the trademarks and other intellectual property rights of 
third parties by us or our commerce partners.  Any such future litigation 
could have a material adverse effect on our business.  Claims of infringement 
and any resultant litigation could subject us to significant liability for 
damages and could result in invalidation of our proprietary rights.  Even if 
not meritorious, claims of infringement could be time-consuming and expensive 
to defend, and could result in the diversion of management time and 
attention, any of which could have a material adverse effect on our business.

POSSIBLE ADDITIONAL TAX BURDENS

     We do not currently collect sales or other similar taxes in states other 
than Texas.  However, one or more states may seek to impose sales tax 
collection obligations on out-of-state companies which engage in or 
facilitate online commerce, and a number of proposals have been made at the 
state and local levels that would impose additional taxes on the sale of 
goods and services through the Internet.  These proposals, if adopted, could 
substantially impair the growth of electronic commerce and could adversely 
affect our opportunity to derive financial benefit from our activities.

     Legislation limiting the ability of the states to impose taxes on 
Internet-based transactions has been proposed by Congress.  Failure to enact 
this legislation could allow various states to impose taxes on Internet-based 
commerce and the imposition of taxes could have a material adverse effect on 
our business.

GOVERNMENT REGULATION OF INTERNET ACTIVITIES

     Due to concerns arising in connection with the increasing popularity and 
use of the Internet, a number of laws and regulations may be adopted covering 
issues such as: user privacy, pricing, characteristics, acceptable content, 
taxation and quality of products and services.  With the adoption of these 
laws or regulations, the costs of communicating on the Internet could 
increase substantially, potentially adversely affecting the growth in use of 
the Internet.  Further, due to the global nature of the Internet, it is 
possible that, although transmissions relating to our programs originate in 
the State of Texas, the governments of other states or foreign countries may 
attempt to regulate our transmissions.  Any of the foregoing developments 
could have a material adverse effect on our business.

SHARES ELIGIBLE FOR FUTURE SALE

     As of May 3, 1999, a total of 16,448,300 shares of common stock were 
outstanding.  The 252,633 shares of common stock held by the selling 
shareholders will be eligible for immediate resale in the public market.  All 
of the remaining 16,195,667 shares of common stock outstanding will be 
subject to resale pursuant to the provisions of Rule 144.  Sales of common 
stock in the public market may have an adverse effect on prevailing market 
prices for the common stock.

THERE IS NO MARKET FOR OUR COMMON STOCK AND IF ONE DEVELOPS IT WILL LIKELY BE 
VOLATILE

     Prior to this offering, there has been no public market for the 
company's common stock and there can be no assurance that an active public 
market for the common stock will develop.  The market prices for securities 
of Internet related companies have been highly volatile and the market has 
experienced significant price an volume fluctuations that are unrelated to 
the operating performance of Internet related companies.  In the past, 
following periods of volatility in the market place of a specific company's 
securities, securities class action litigation has often been brought against 
that company.  In the event such litigation were to be brought against the 
company it could result in substantial costs and divert management's 
attention and resources, which could have a material adverse effect upon the 
company's business, financial condition and result of operations.

PENNY STOCK REGULATIONS MAY DECREASE YOUR ABILITY TO SELL OUR COMMON STOCK

     If our common stock trades below $5.00 per share, it may become subject 
to the penny stock regulations.  If our shares are subject to the penny stock 
regulations, the market liquidity in them could be adversely affected because 
the rules require broker-dealers to make a special suitability determination 
for the purchaser and have received the purchaser's written consent prior to 
the sale.  This makes it more difficult administratively for broker-

                                       6



dealers to buy and sell stock subject to the penny stock regulations on 
behalf of their customers. Consequently, the regulations may affect the 
ability of broker-dealers to sell our shares and may affect the ability of 
holders to sell them in the secondary market.

CONTINUED CONTROL BY PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS

     Mr. White owns 4,448,000 shares of company common stock, Mr. Finn owns 
4,448,000 shares of company common stock, and Mr. Magness owns 4,207,000 
shares of company common stock, which is collectively approximately 81% of 
the outstanding common stock.  As a result, these stockholders could exercise 
control over all matters requiring stockholder approval, including the 
election of directors and approval of significant corporate transactions.  
This concentration of ownership may have the effect of delaying or preventing 
a change in control.  

LACK OF DISINTERESTED, INDEPENDENT DIRECTORS

     All of our directors have a direct financial interest in the company. 
While we believe that our current directors will be able to exercise their 
fiduciary duty, we intend to add independent, disinterested directors to 
serve on the board of directors in the near future.

     FOR ALL OF THESE REASONS, AND OTHERS SET FORTH BELOW, ANY PURCHASE OF 
THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK.  YOU SHOULD CONSIDER 
CAREFULLY THESE RISK FACTORS TOGETHER WITH ALL OF THE OTHER INFORMATION 
INCLUDED IN THIS PROSPECTUS BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR 
COMMON STOCK.  OUR FAILURE TO ADDRESS ANY OF THESE RISKS COULD HAVE AN 
ADVERSE EFFECT ON OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL 
CONDITION.  
    

                      NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Some of the statements contained in this prospectus, in particular in 
the "Risk Factors" and "Business sections, discuss future expectations, 
contain projections of results of operation or financial condition or state 
other "forward-looking" information.  These statements are subject to known 
and unknown risks, uncertainties, and other factors that could cause the 
actual results to differ materially from those contemplated by the 
statements.  The forward-looking information is based on various factors and 
is derived using numerous assumptions.  In our opinion, important factors 
which may cause actual results to differ from projections include:

     -    the success or failure of our management's efforts to implement their
          business strategy;

     -    our ability to enter into joint ventures or partnerships with
          established industry participants;

     -    our ability to raise sufficient capital to meet operating
          requirements;

     -    the uncertainty of consumer demand for our technology;

     -    our ability to protect our intellectual property rights;

     -    our ability to compete with major established companies;

     -    the effect of changing economic conditions;

     -    the effect of changing technology;

     -    our ability to attract and retain quality employees; and

     -    other risks which may be described in future filings with the SEC.

     We do not promise to update forward-looking information to reflect 
actual results or changes in assumptions or other factors that could affect 
those statements.

                                       7



   
                                 THE RESCISSION OFFER

BACKGROUND

     In February, 1999, the company sold 166,667 shares of common stock (the 
"Rescission Securities") to two purchasers in a private offering (the 
"Rescission Offerees").  The Rescission Securities were sold to the 
Rescission Offerees in order to provide the company with working capital.  
The Rescission Securities were not registered under the 1933 Act or the 
securities laws of any state, therefore, the Rescission Offerees may have the 
right under the 1933 Act and applicable state securities laws to rescind 
their purchases of the Rescission Securities to the extent an exemption from 
registration was not available.  The Company estimates that if all Rescission 
Offerees accept the Rescission Offer, the Company would pay approximately 
$250,000, exclusive of interest, to repurchase all of the Rescission 
Securities.  

LEGAL RIGHTS OF RESCISSION OFFEREES AND CONSEQUENCES OF ACCEPTANCE OR 
NON-ACCEPTANCE

     Under federal and state securities laws, the sale of securities, such as 
the Rescission Securities, must either be registered or exempt from 
registration.  Absent the availability of an exemption from registration, the 
sale of securities in an unregistered transaction is a violation of federal 
and state securities laws; the purchaser's remedy for this violation is to 
bring an action against the seller for rescission within the period specified 
under the applicable statute of limitations.  If successful, a purchaser 
would receive the price paid for the security plus interest at the statutory 
rate less any distributions made with respect to the security or, if the 
purchaser previously sold the security, the purchaser would receive the price 
paid for the security plus interest at the statutory rate less the proceeds 
received upon sale.  Under federal law, an action for rescission must be 
brought within one year of the issuance of the shares in violation of the 
registration provisions, but in no event more than three years after the 
shares were offered to investors.  State statutes of limitation vary.

     The company is making the Rescission Offer in an attempt to insulate the 
company from future civil liability for rescission.  Under many state 
statutes, the Rescission offer, if carried out in compliance with the 
applicable statutes, extinguishes civil liability for rescission, regardless 
of whether the rescission offer is accepted.

     The company may not be able to insulate itself from liability  under 
federal securities laws because the SEC has taken the position that liability 
under federal law is not avoided because a potentially liable person makes a 
registered rescission offer.  Rescission Offerees should be aware, however, 
that because the company, pursuant to the Rescission Offer, is 
unconditionally offering to Rescission Offerees exactly what they could 
receive in an action for rescission, under relevant case law there is 
authority that suggests that Rescission Offerees may be estopped from 
bringing any future claim for rescission.  The company expects to defend any 
future action for rescission on this basis.  Alternatively, there is some 
authority that holds that Rescission Offerees may be deemed to have released 
the company from future liability.  In any event, Rescission Offerees who 
subsequently bring a rescission action may be limited in their recovery to no 
more than they would have received had they accepted the Rescission Offer.  
Thus, a Rescission Offeree who accepts the Rescission Offer may retain a 
federal cause of action but may not be entitled to additional damages and, in 
the view of the SEC, a Rescission Offeree who does not accept the Rescission 
Offer may retain a federal cause of action for rescission but any action may 
be subject to the defenses described above.  In addition, in making a 
decision to accept or reject the Rescission Offer, Rescission Offerees should 
be cognizant of the statute of limitations and the possibility that the 
company may claim that an exemption from registration was available with 
respect to a given sale of Rescission Securities.

     Rescission Offerees should also be aware that if they successfully 
allege that a material misrepresentation or omission occurred in connection 
with the sale of the Rescission Securities, they may have additional causes 
of action with respect to the sale of the Rescission Securities under the 
antifraud provisions of state and federal securities laws.  If a material 
misrepresentation of fact or omission of fact occurred in connection with the 
sale of the Rescission Securities, causes of action for common law fraud may 
also exist.

TAX CONSEQUENCES

     The federal income tax consequences of accepting the Rescission Offer 
are uncertain, and the consequences to each Rescission Offeree will depend, 
in part, on the circumstances and status of the Rescission Offeree.  
Generally, Rescission Offerees who transfer their Rescission Securities to 
the company in exchange for the price paid by the Rescission Offeree for the 
Rescission Securities, plus interest at the statutory rate, less any 
distributions with respect to the Rescission Securities, will realize gain 
equal to the excess of (a) the aggregate amount paid by the company to the 
Rescission Offeree for the Rescission Securities, over (b) the price 
originally paid by the Rescission Offeree for such securities.  If the 
Rescission Offeree previously sold the Rescission Securities, the Rescission 
Offeree who accepts the Rescission Offer will realize gain an amount equal to 
the aggregate amount paid by the company to the Rescission Offeree.

                                       8



     Any gain realized as a result of accepting the Rescission Offer must be 
recognized.  There is no direct authority, however, regarding the character 
of the gain for federal income tax purposes.  Nevertheless, under general 
federal income tax principles, Rescission Offerees who hold their Rescission 
Securities as a capital asset on the date of the exchange (or, in the case of 
a prior sale of Rescission Securities, Rescission Offerees who held their 
Rescission Securities as a capital asset on the date of the prior sale or 
exchange), should be entitled to report gain recognized as a result of 
accepting the Rescission Offer as a distribution in redemption of, or in 
exchange for, the Rescission Securities, subject to the provisions and 
limitations of Section 302 of the Internal Revenue Code of 1986, as amended.

     The discussion concerning certain federal income tax matters does not 
address all potentially relevant federal income tax matters, or the 
consequences to persons who, because of their circumstances or status are 
subject to special federal income tax treatment.  The discussion does not 
address state, local or foreign tax issues, and is not intended as tax advice 
to any person. Consequently, RESCISSION OFFEREES ARE URGED TO CONSULT THEIR 
OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF ACCEPTING THE 
RESCISSION OFFER, INCLUDING TAX REPORTING REQUIREMENTS, THE APPLICATION AND 
EFFECT OF FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS, AND THE 
IMPLICATIONS OF ANY CHANGES IN THE TAX LAWS.

RESCISSION OFFER

     The company hereby offers the Rescission Offerees the right to rescind 
their purchases of the Rescission Securities.  Rescission Offerees who accept 
the Rescission Offer shall be entitled to exchange their Rescission 
Securities for cash in the amount of the price paid, plus simple interest at 
the rate of 9% per annum, from the date the Rescission Securities were 
purchased, less the Rescission Securities.  Rescission Offerees who accept 
the Rescission Offer but disposed of their Rescission Securities at a price 
less than the original purchase price paid to the company are entitled to 
receive cash in the amount of such difference, plus simple interest at the 
rate of 9% per annum on the difference from the date of disposition.  As of 
the effective date of the prospectus $250,000 will be held in escrow with Texas
Commerce Bank, N.A. for payment to Rescission Offerees who elect to rescind 
their purchases.

     The Rescission Offer will terminate at 5:00 p.m. local time, Houston, 
Texas on _________, 1999 (the "Rescission Expiration Date").  Accordingly, 
Rescission Offerees will have thirty (30) business days to respond to the 
Rescission Offer. Rescission Offerees who have not previously disposed of 
their Rescission Securities may accept the Rescission Offer only be 
completing the Rescission Agreement accompanying this prospectus as 
Attachment A and returning it to the company by 5:00 p.m. on the Rescission 
Expiration Date, together with the certificates and documents evidencing the 
Rescission Securities, as adjusted to give effect to any distributions paid 
with respect to such Rescission Securities, properly endorsed for transfer.  
Rescission Offerees who have previously disposed of their Rescission 
Securities may accept the Rescission Offer only by completing the Rescission 
Agreement accompanying this prospectus and returning it to the company by 
5:00 p.m. on the Rescission Expiration Date.

     Any Rescission Offeree who fails to return a signed Rescission Agreement 
or, if required, fails to tender the Rescission Securities by the Rescission 
Offer Expiration Date shall be deemed to have rejected the Rescission Offer.

     All questions as to the validity, form, eligibility (including time of 
Receipt) and acceptance of the Rescission Agreement will be determined by the 
company, which determination will be final and binding.  The company reserves 
the absolute right to reject any or all Rescission Agreements not properly 
completed or if their acceptance, in the opinion of the counsel to the 
company, would be unlawful.  The company also reserves the right to waive any 
irregularity in the Rescission Agreement.  The company's interpretation of 
the terms and conditions of the Rescission Agreement (including the 
instructions in the Rescission Agreement) shall be final and binding.  The 
company shall not be under any duty to give notification of defects in 
connection with Rescission Agreements or incur any liability for failure to 
give such information.

     Upon the terms and subject to the conditions of the Rescission Offer, 
payment of the purchase price and interest to Rescission Offerees who elect 
to rescind will be made as soon as practicable after receipt by the Company 
of the Rescission Agreement and the certificates and/or documents evidencing 
the Rescission Securities.

     Rescission Offerees who elect not to accept the Rescission Offer need 
not submit a response to the Rescission Offer.  Rescission Offerees who do 
not respond to the Rescission Offer will continue to be the owners of the 
Rescission Securities and will hold Rescission Securities subject to the 
restrictions which were in effect at the time of their issuance.

                                       9



     UNDER TEXAS LAW, RESCISSION OFFEREES MAY NOT SUE FOR LIABILITY UNDER 
ARTICLE 581-33 OF VERNON'S ANN. TEXAS CIV. ST. UNLESS THEY ACCEPT THE 
RESCISSION OFFER AND DO NOT RECEIVE THE AMOUNT OF THE OFFER, OR THEY REJECT 
THE RESCISSION OFFER IN WRITING WITHIN 30 DAYS OF ITS RECEIPT AND EXPRESSLY 
RESERVE IN THE REJECTION THE RIGHT TO SUE, IN WHICH CASE THEY MAY SUE WITHIN 
ONE YEAR FROM THE REJECTION. 
    

                                   USE OF PROCEEDS

     The company will not receive any proceeds from the resale of common 
stock by the selling stockholders.

                                   DIVIDEND POLICY

     The company has not paid any dividends on its common stock and expects 
to retain any future earnings for use in its business.  Future dividend 
policy will be determined by the board of directors and will depend on a 
number of factors, including the company's future earnings, capital 
requirements, financial condition and future prospects, restrictions on 
dividend payments pursuant to any of the company's future credit or other 
agreements, and such other factors as the board of directors may deem 
relevant.

                                    CAPITALIZATION

     The following table sets forth the capitalization of the company at 
January 31, 1999.  This table should be read in conjunction with the 
company's financial statements and notes included elsewhere in this 
prospectus.


                                                             JANUARY 31, 1999
                                                          
   Long-term debt . . . . . . . . . . . . . . . . . . . . . .     $     -    

   Shareholders deficit:

       Common Stock, no par value,
       50,000,000 shares authorized; 16,281,633
       shares issued and outstanding. . . . . . . . . . . . .       1,090,950

       Stock subscription receivables . . . . . . . . . . . .         (14,609)

       Accumulated deficit. . . . . . . . . . . . . . . . . .      (1,355,211)
                                                                  -----------
                                                                  -----------
       Total shareholders' equity (deficit) . . . . . . . . .     $  (278,870)
                                                                  -----------
                                                                  -----------
   Total capitalization . . . . . . . . . . . . . . . . . . .     $  (812,080) 

                              __________________________

                      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                     FINANCIAL CONDITION AND RESULTS OF OPERATION

     The following discussion should be read in conjunction with the financial 
statements and notes contained in this prospectus. 

GENERAL

     The following analysis compares the financial condition of the company 
for the period from inception (August 9, 1996) to July 31, 1997 and the year 
ended July 31, 1998, and for the six months ended January 31, 1998, as 
compared to the six months ended January 31, 1999.

                                       10


     The company recognizes revenue as services are provided, in accordance 
with customer agreements.  For the year ended July 31, 1998, approximately 
24% and 22% of the company's total revenues were derived from Websource 
Media, a company licensee, and Bauge, an independent reseller, respectively.  
Royalty income from software licensing agreements is recognized as it is 
earned per the individual terms of each royalty agreement, and is generally 
comprised of a minimum amount plus a stated percentage of the applicable 
licensee's sales.  The company uses the direct write-off method in accounting 
for bad debts, the results of which are not materially different from the 
allowance method.

     The company accounts for property and equipment at cost with 
depreciation calculated using the straight-line method over its estimated 
useful lives ranging from five to ten years.  When assets are retired or 
otherwise removed from the accounts, any resulting gain or loss is reflected 
in income for the period.  The cost of maintenance and repairs is charged to 
expense as incurred and significant renewals and improvements are 
capitalized. 

     The company utilizes the liability method in accounting for income 
taxes. Under the liability method, deferred tax assets and liabilities are 
determined based on differences between financial reporting and tax bases of 
assets and liabilities and are measured using anticipated tax rates and laws 
that will be in effect when the differences are expected to reverse.  The 
realizability  of deferred tax assets are evaluated annually and a valuation 
allowance is provided if it is likely that the deferred tax assets will not 
give rise to future benefits in the company's tax returns.

RESULTS OF OPERATIONS

     RESULTS OF OPERATIONS FOR THE PERIOD FROM INCEPTION TO JULY 31, 1997 
COMPARED WITH THE RESULTS OF OPERATIONS FOR THE YEAR ENDED JULY 31, 1998, AND 
FOR THE SIX MONTHS ENDED JANUARY 31, 1998 COMPARED WITH THE SIX MONTHS ENDED 
JANUARY 31, 1999.

     Revenues increased from $185,994 for the period from inception through 
July 31, 1997 to $628,070 for the year ended July 31, 1998.  The increase of 
$442,076 or 238% was primarily due to growth in web sites developed and 
SITEBLAZER license sales.  Revenues decreased from $262,437 for the six 
months ended January 31, 1998, to $258,797 for the six months ended January 
31, 1999.  The decreased amount is $3,690 and is attributable to decreased 
dial up resales.  

     Consulting expense increased from $-0- for the period from inception 
through July 31, 1997 to $749,990 for the year ended July 31, 1998.  The 
increase of $749,990 reflects the issuance of common stock to PinkMonkey.com 
in exchange for consulting services.  The fair value of these issued shares 
totaling $749,990 was recorded as a consulting expense by the company in July 
1998.  

     Advertising expense increased from $12,173 for the six months ended 
January 31, 1998, to $33,173 for the six months ended January 31, 1999.  The 
increase of $21,000 or 173% primarily reflects costs of print advertising for 
the launch of Political Net.com.

     General and administrative expenses increased from $3,605 for the period 
from inception through July 31, 1997 to $20,096 for the year ended July 31, 
1998.  The increase in general and administrative expenses of $16,491 or 457% 
primarily reflects the company's emergence from its development stage.  
General and administrative expenses increased from $3,152 for the six months 
ended January 31, 1998 to $47,803 for the six months ended January 31, 1999.  
The increase in general and administrative expenses of $44,651 or 1,417% 
primarily reflects the company's emergence from its development stage.

     The company had a ($64,832) net loss for the period from inception 
through July 31, 1997 compared with a net loss of ($781,595) for the year 
ended July 31, 1998.  The increased net loss of $716,763 or 1,106% is due 
primarily to the promotional expense recorded by the company in July 1998 for 
the fair value of common stock issued to PinkMonkey.com.  The company had a 
($13,587) net loss for the six months ended January 31, 1998 compared with a 
net loss of ($508,784) for the six months ended January 31, 1999.  The 
increased net loss of $495,197 or 3,644% is due primarily to the increase in 
professional fees associated with this registration statement and an increase 
in salaries of $197,816.

     Net loss per share of common stock increased from $(.00) to $(.05) for 
the period from inception (August 9, 1996) through July 31, 1997, compared to 
the year ended July 31, 1998. 

     The company may in the future experience significant fluctuations in its 
results of operations.  Such fluctuations may result in volatility in the 
price and/or value of the company's common stock if any market develops.  
Results of operations may fluctuate as a result of a variety of factors, 
including demand for the company's design and creation of Internet web sites, 
the introduction of new products and services, the timing of significant 

                                       11



marketing programs, the success of reseller and license agreements, the 
number and timing of the hiring of additional personnel, competitive 
conditions in the industry and general economic conditions.  Shortfalls in 
revenues may adversely and disproportionately affect the company's results of 
operations because a high percentage of the company's operating expenses are 
relatively fixed. Accordingly, the company believes that period to period 
comparisons of results of operations should not be relied upon as an 
indication of future results of operations.  There can be no assurance that 
the company will be profitable.  Due to the foregoing factors, it is likely 
that in one or more future periods the company's operating results will be 
below the expectations of the investor. 

     The financial statements included herein have been prepared assuming the 
company will be able to continue as a going concern.  The company has a 
working capital deficit of $106,092 and a stockholders' deficit of $92,427 at 
July 31, 1998, and experienced significant losses in fiscal 1998 which raise 
doubts about the Company's ability to generate sufficient cash flow to meet 
its obligations on a timely basis, to obtain additional financing or capital 
and to refinance its debt and ultimately attain profitable operations.  

LIQUIDITY AND CAPITAL RESOURCES

     As of January 31, 1999, the company's primary source of liquidity was 
$43,640 of cash and $51,246 of accounts receivable.  The company's working 
capital deficit and shareholders' deficit was $81,969 and $74,419 at January 
31, 1998, as compared to a working capital deficit of $297,219 and a 
shareholders' deficit of $278,870 at January 31, 1999.

     Net cash provided by operating activities during the year ended July 31, 
1998 was $3,169 compared with net cash used in operating activities of $275 
for the period from inception through July 31, 1997.  The increase in net 
cash provided by operating activities was primarily due to the decreased net 
loss after backing out the effect of the consulting expenses recorded in July 
1999 described herein.  Net cash used in operating activities during the six 
months ended January 31, 1999 was $182, 992 compared with net cash provided 
by operating activities of $39,228 for the six months ended January 31, 1998. 
 The increase in net cash used in operating activities was primarily due to 
the increase in net loss for the six months ended January 31, 1999 of 
$495,187, offset by common stock issued as compensation and a decrease in 
accounts receivable.  

     Net cash used in investing activities the year ended July 31, 1998, was 
$2,332 compared with net cash used in investing activities of $14,796 for the 
period from inception to July 31, 1997, respectively.  The decrease in the 
net cash used in investing activities is attributed to the decrease in the 
purchase of property and equipment.  Net cash used in investing activities 
was $2,332 and $5,954 for the six months ended January 31, 1998 and the six 
months ended January 31, 1999, respectively.  The increase in the net cash 
used in investing activities was  attributed to an increase in purchases of 
property and equipment.

     Net cash provided by financing activities was $25,275 for the period 
from inception (August 9, 1996) through July 31, 1997 compared with net cash 
provided by financing activities of $7,947 for the year ended July 31, 1998.  
The decrease in net cash provided by financing activities was primarily due 
to the repayment of a note.  Net cash provided by financing activities was 
$5,414 for the six months ended January 31, 1998 compared with net cash 
provided by financing activities of $213,598 for the six months ended January 
31, 1999.  The increase in net cash provided by financing activities was 
primarily due to proceeds from issuance of common stock of $198,200.
   
     The company's internally generated cash flows from operations have 
historically been and continue to be insufficient for its cash needs.  As of 
May 3, 1999, the company's sources of external and internal financing were 
limited. It is not expected that the internal source of liquidity will 
improve until significant net cash is provided by operating activities, and 
until such time, the company will rely upon external sources for liquidity.  
The company has an unsecured revolving line of credit in the amount of 
$30,000 with Texas Commerce Bank, and to date has $30,000 available.  The 
company will have to obtain additional financing of approximately $250,000, 
exclusive of interest and costs for payment to the Rescission Offerees. There 
can be no assurance that the company will be able to obtain additional 
financing on reasonable terms, if at all.   Until the company can obtain 
monthly sales levels of approximately $90,000 which would be sufficient to 
fund current working capital needs, there is uncertainty as to the ability of 
the company to expand its business and continue its current operations.  The 
company believes that it will be able to satisfy its cash requirements for 
the next 12 months. Historically, revenues have covered costs.  Management 
believes that projected revenues from licensees will cover costs.  There is 
no assurance that the current working capital will be sufficient to cover 
cash requirements for the balance of the current fiscal year or to bring the 
company to a positive cash flow position.  Lower than expected earnings 
resulting from adverse economic conditions or otherwise, could restrict the 
company's ability to expand its business as planned, and if severe enough may 
shorten the period in which the current working capital may be expected to 
satisfy the company's requirements, force curtailed operations, or cause the 
company to sell assets.  The 
    
                                       12

   
financial statements included herein have been prepared assuming the company 
will be able to continue as a going concern.  The company has a working 
capital deficit of $106,092 and a stockholders' deficit of $92,427 at July 
31, 1998, and experienced significant losses in fiscal 1998 which raise 
doubts about the Company's ability to generate sufficient cash flow to meet 
its obligations on a timely basis, to obtain additional financing or capital 
and to refinance its debt and ultimately attain profitable operations.  
    

IMPACT OF YEAR 2000

     The Year 2000 Issue is the result of computer programs being written 
using two digits rather than four to define the applicable year.  Any of the 
company's computer programs that have time-sensitive software may recognize a 
date using "00" as the year 1900 rather than the year 2000.  This could 
result in a system failure or miscalculations causing disruptions of 
operations, including, among other things, a temporary inability to process 
transactions, send invoices, or engage in similar normal business activities. 

     The company's board of directors has developed a Year 2000 strategy and 
has established a committee to determine the extent to which the company's 
operations are vulnerable to Year 2000 Issues.  The company believes its 
operations are Year 2000 compliant.  However, variability of definitions of 
"compliance" with the Year 2000 and of different combinations of software, 
firmware, and hardware may lead to lawsuits against the company.  The 
outcomes of any such lawsuits and the impact of the company are not estimable 
at this time.  The Year 2000 may affect the company's internal systems, 
however management believes the effect will be minimal as the company 
purchased its hardware systems within the last two years from name 
manufacturers who have certified the equipment year 2000 compliant in their 
manufacturer's warranty. Management believes out of pocket costs associated 
with Year 2000 will be minimal.  The company has reviewed its internal 
programs and has determined there are no significant Year 2000 issues within 
its systems or services. However, although the company believes its systems 
are Year 2000 compliant, the equipment and software used by its licensees, 
resellers or customers may not be Year 2000 compliant.  Failure of such 
third-party equipment or software to properly process dates for the year 2000 
could result in unanticipated expenses and loss of revenues, which could have 
an adverse effect on the company's business.  There can be no guarantee that 
the systems of other companies on which the company's operations rely will be 
timely converted.  Any Year 2000 compliance problems of the company could 
have a material adverse effect on the company's business.

                                      BUSINESS

THE COMPANY

     The company was incorporated in the State of Texas in August 1996.  The 
company is a web development company that specializing in the design, 
creation and marketing of cost-effective Internet products.  The company 
strives to provide businesses, of all sizes, with interactive Internet web 
sites along with marketing services, to create long-term value for its 
customers worldwide.  Some of the company's marketing services include:

     -    search engine marketing, which is marketing via advertisements that
          post findings on the results page of a search on the Internet,

     -    news group postings,

     -    custom statistical counters which provide statistical information
          about the visitors to a web site, 

     -    web site tracking logs which record the number of visitors to a web
          site, and

     -    other traditional marketing methods.

In addition, the company develops customized software programs, on various 
platforms, that are Internet compatible (i.e. accounting/finance interfaces, 
online databases and Oracle/Lotus Internet database interfaces).  The 
company's long-term strategy is to create valuable interactive web sites, 
e-commerce interfaces/sites and Intranets and Extranets, which will empower 
companies to utilize the super-efficiencies of the Internet worldwide.  The 
company assists its customers in improving their Internet presence for 
products or services offered.  The company uses proprietary technology for 
the creation of web sites which increases the chances that the company's 
customers' web sites are seen by an Internet user irrespective of the search 
engine used.  Most of the company's custom web sites have password protected 
administrative areas that allow the company's customers to update their site 
with little or no programming skills. Although the majority of the company's 
current revenues are derived from custom web site design and search engine 
marketing, the company is expanding its operations to include a wider variety 
of interactive databases, electronic commerce sites, and network security.

                                       13



     The company offers instant web presence through SiteBlazer.com by 
offering its customers a tool to build customized, updateable web sites.  The 
company developed SiteBlazer.com as a solution for mass production of 
affordable custom/dynamic web sites.  Management expects SiteBlazer.com to 
provide an avenue for timely web site production at a reduced cost.  The 
company's business divisions utilize SiteBlazer.com and the company's 
proprietary technology. Customers' web sites are included in the 
SiteBlazer.net network search engine if the monthly hosting fee is 
maintained. 

THE INTERNET AND WORLD WIDE WEB

     The Internet is a global collection of thousands of computer networks 
interconnected to enable commercial organizations, educational institutions, 
government agencies and individuals to communicate electronically, access and 
share information and conduct business.  The Internet was historically used 
by a limited number of academic institutions, defense contractors and 
government agencies.  It was used primarily for remote access to host 
computers and for sending and receiving electronic mail.  Presently, 
commercial organizations and individuals are dominating the use of the 
Internet.  Recent technological advances, improved microprocessor speed and 
the development of easy-to-use graphic user interfaces, combined with 
cultural and business changes, have enabled the Internet to be integrated 
into the operations, strategies, and activities of countless commercial 
organizations and individuals. 

     The Internet and the World Wide Web have introduced fundamental and 
structural changes in the way information can be produced, distributed and 
consumed, lowering the cost of publishing information and extending its 
potential reach.  Companies from many industries are publishing product and 
company information or advertising materials, collecting customer feedback 
and demographic information interactively, and offering their products for 
sale on the web.  The structure of web documents allows organizations to 
publish significant quantities of product information, while simultaneously 
allowing each user to view only those elements of the information which are 
of particular interest to them.  This feature makes possible the dynamic 
tailoring of information delivery, to each user's interests, timely and cost 
effective.  The web, by facilitating the publishing and exchange of 
information, is dramatically increasing the amount of information available 
to users.

BUSINESS STRATEGY

     The mission of each company division is to become one of the predominant 
service providers within each division's respective market niche.  The 
critical success factors are:

     -    understanding, developing and applying information technology to    
          the Internet, interactive media markets, and data access and software
          tools;

     -    narrowing market focus while consummating strategic alliances to 
          complement product and service offerings;

     -    investing in strategic Internet or interactive media investments or
          acquisitions, and

     -    most importantly, a continued understanding of customers' needs.

     Management expects to utilize its expertise in database 
design/development and project management to create new database management 
products, and a suite of product and service offerings, that will enable 
sophisticated direct interactive marketing environments.  Management believes 
these new products will enable the company to take advantage of the demand 
for data management services created from the Internet and interactive media, 
while continuing to grow and invest in its design and development of web 
sites.

     The company has adopted a strategy of seeking opportunities to realize 
gains through the selective investment in companies whose web sites are 
designed and developed by the company.  The company believes that this 
strategy provides the ability to increase shareholder value, as well as 
provide diversification within the company.  Additionally, the company plans 
to continue to develop and refine the products and services of its 
businesses, with the goal of increasing revenue as new products are 
commercially introduced.

     With respect to its businesses, the company will seek to expand its 
participation in Internet, and interactive media industries, and increase its 
market share.  Key elements of this strategy include:

     -    UTILIZE THE LATEST TECHNOLOGY AVAILABLE TO THE INTERNET, INCLUDING
          JAVA, JAVASCRIPT, NEOWEB SCRIPT, TCL/TK AND SHOCKWAVE, TO ACHIEVE
          OPTIMUM INTERNET PRESENCE.  The company builds web sites without the
          use of editors based on hypertext markup language (HTML), which is an
          authoring language used to create documents on the World Wide Web. 
          Such editors often do not support many 

                                       14



          new additions to the web and use codes designed for one particular 
          kind of web server that could present problems.  The company is 
          constantly increasing its technological capabilities through the 
          enhancement of existing software and the re-engineering of the 
          company's proprietary database software in order to allow the 
          company's customers greater ability to access, analyze and update 
          their own databases through the use of the company's computer 
          services and software.

     -    CONTINUE TO ENHANCE AND EXPAND THE COMPANY'S PRODUCTS AND SERVICES. 
          The company has invested significant resources in new business ideas
          or investments which seek to capitalize on opportunities surrounding
          the growth of the Internet and the interactive marketing industry. 
          The company intends to continue to pursue the growth and development
          of its technologies and services and to introduce its products
          commercially.

     -    PROVIDE THE HIGHEST LEVEL OF CUSTOMER SERVICE.  Management plans to
          create an Internet presence that adds value to its clients
          organizations.

     -    PURSUE INNOVATIVE ADVERTISING SOLUTIONS.  The company is actively
          seeking to develop innovative ways for advertisers to effectively
          reach their target audiences through the Internet.  The company
          designs and offers customized packages which include the ability to
          change advertisements quickly and frequently, to link a specific
          search term to an advertisement, to conduct advertising test campaigns
          with rapid result delivery and to track daily usage statistics.  The
          company is continuing its development of software that will provide it
          with the ability to target ads based on demographics and usage
          patterns.

     -    CROSS-SELL PRODUCTS AND SERVICES. The company is involved in many
          aspects of the direct marketing sales cycle. The company has
          experienced initial success in increasing the number of products and
          services purchased by its existing clients and intends to further this
          expansion.

                                     DIVISIONS

CUSTOM WEB SITE DEVELOPMENT

     The company develops high-end custom web sites, encompassing original 
graphics and innovative layouts.  The company's business strategy is to 
develop and design web sites that achieve growth and organizational 
optimization for the company's customers by creating more efficient 
navigation, utilizing interactive databases, and by using proprietary 
technology to increase the likelihood of being found at or near the top of 
search engines. Management believes that its web site pricing is very 
competitive.  The interactive databases enable customers to self-manage their 
web sites internally.  Many of the company's proprietary scripting programs 
are adapted and included in individual web sites, allowing customers to 
manage, modify, and maintain their web sites with little or no programming 
knowledge.  The company currently hosts one hundred eighty custom web sites 
which it has developed.  

     SITEBLAZER.COM
   
     The focus of SiteBlazer.com is to allow companies to build customized, 
updateable web sites, within minutes, at a reduced cost.  According to 
ADVERTISING AGE'S NETMARKETING April 1999 Web Price Index, the median price 
for small interactive web sites is $78,000, which does not include fees for 
hosting or changes.  For approximately $450 plus a $20 per month hosting fee, 
SiteBlazer.com offers customers a three page web site.  Also through 
SiteBlazer.com, the company offers additional options for customers to 
purchase and add to their site, i.e., products page, what's new page, press 
release page, services page, calendar of events page, interactive forum page 
and a wide variety of counters, statistic programs, and shopping cart or 
e-commerce solutions.  The individual makes changes to the web site, 
eliminating any fees for changes.  SiteBlazer.com sites also offer an 
economic avenue to broaden a client's Internet exposure.  SiteBlazer.com 
offers hundreds of professional images, templates, and graphic designs.  
SiteBlazer.com's templates are constantly replaced, giving web site visitors 
an appearance of the site being constantly updated.  These changes are 
randomly selected from a large collection of templates which are custom 
designed for specific business categories.  With client-related information 
and content, SiteBlazer.com can build a site. SITEBLAZER sites can be built 
individually on-line, or data can be collected and uploaded in batches.  With 
SiteBlazer.com, the company's customers are given a password which allows 
them to change information on their site at any time, at no extra charge.  In 
addition, when web sites are created, description, title, and keyword tags 
are automatically embedded in them to attract major search engines.  
Management believes SiteBlazer.com's templates and databases are easily 
adapted to other SITEBLAZER applications and the company plans to license its 
technology with a desire to reach a large number of customers.  A web site 
may be in existence 

                                       15



for testing purposes to a limited audience.  The launch of a web site is the 
date the web site becomes available to the general public. SiteBlazer.com has 
been in existence since January 1998 and was launched May 1998.  The company 
has developed one thousand five hundred ninety five SiteBlazer.com web sites. 
The company's licensees have developed approximately forty-five thousand 
SiteBlazer.com web sites.  
    

     SITEBLAZER NETWORK

     The SITEBLAZER network is a business-to-business web guide/search engine 
designed to increase sales for its customers.  The SiteBlazer.com program 
allows a business to have a stand-alone customized web site and still be part 
of the SITEBLAZER network.  The company believes that the SITEBLAZER network 
contains up-to-date information, as each web site must pay a monthly hosting 
fee in order to continue to be on the SITEBLAZER network.  The company is 
populating the SITEBLAZER network with SiteBlazer.com web sites and expects 
to launch the SITEBLAZER network as a search engine.  At the time of launch, 
the SITEBLAZER network will allow non-SiteBlazer.com web sites to be included 
in the SITEBLAZER network search engine for a nominal fee.

     INTERACTIVE DATABASES

     The company has developed proprietary technology involving interactive 
databases.  The interactive databases enable customers to self-manage their 
web sites internally.  Many of the company's proprietary scripting programs 
are adapted and included in individual web sites, allowing customers to 
manage and modify their web sites.  The company's interactive databases offer 
a cost-effective alternative to products and services offered by its 
competitors, and have been successfully implemented in a wide range of 
applications and by Fortune 500 companies, like Union Carbide and CSX.

     POLITICAL NET.COM

     The company's Political Net.com provides what management believes will 
be a rapidly growing network of political web sites by including links to 
existing sites in the database which are updated on an on-going basis. 
Visitors can search for politician's sites, participate in online political 
discussions, keep up-to-date with the most recent news or political events, 
or even cast their vote in weekly polls.  Political Net.com also has chat 
rooms that focus on topics of interest ranging from family and education 
issues to foreign affairs. The company believes that Political Net.com 
provides politicians with a tool to build web sites for themselves quickly 
and more economically than ever before. Besides offering politicians 
inexpensive custom web sites, Political Net.com supplies sites to political 
parties at the county level and above, free of charge. Politicians are 
already operating sites on Political Net.com.

     Political Net.com provides candidates with an opportunity to employ 
online questionnaires.  Candidates can post up to twenty customized questions 
on their site which saves the costs associated with printing and mailing 
questionnaires. Potential voters can fill out the questionnaires and submit 
them with a keystroke.  Candidates receive realtime information on what their 
constituents think about the issues, and can tailor their approaches 
accordingly.  For $500, politicians get a web site with six pages (home page, 
more info, newsletter, press releases, a contact form for voters to fill out 
for more information, and an interactive forum page where readers can post 
their comments or questions) and candidates can post their answers or views.  
For additional charges, politicians can load up to three pages of their 
existing literature or brochures into their sites.  They can also have their 
own photo gallery of up to 20 pictures or include up to five minutes of video 
clips or campaign commercials. Political Net.com's technology is derived from 
the adaptability of SiteBlazer.com and the SITEBLAZER network.  Political 
Net.com provides a gateway for users to search for their local politicians or 
candidates and interact with them.  Management believes current issues, 
on-line voting, news feed and resource links make Political Net.com 
attractive to the average Internet user as well as political parties.  
Political Net.com has been in existence since July 1998 and was launched in 
August 1998.  The company has developed one hundred ten Political Net.com web 
sites.  

     ONLINE ACCOUNTING FINANCIAL PACKAGE

     The company is currently developing an online accounting financial 
package to utilize the Internet to perform accounting work anywhere in the 
world.  The online accounting financial package will allow a company to 
maintain its records online, including receipts and invoices.  The online 
accounting financial package entails scanning invoices and receipts offsite 
by existing employees of the particular company.  The online accounting 
financial package utilizes the Internet, and its inexpensive costs, to 
transmit all of its data throughout the world.  All data is archived in a 
securable database on a secure Internet server.  This system may reduce, or 
even eliminate, the traveling expenses of accountants/bookkeepers.  Online 
accounting has been 30% developed.  Expected launch is the fourth quarter of 
1999.  The company is not aware of any material conditions or uncertainties 
which need to be resolved prior to commercialization.

                                       16

   
     ONLINE AUCTION SYSTEM

     The company has developed an online auction system which will allow 
traditional sealed bids or bids that can be viewed online.  The online 
auction system allows dealers to view and bid on items online with products 
being sold to the highest bidder.  The online auction system is adaptable and 
can be altered from a silent auction, to an auction where the highest bid and 
bidder are known.  In order to utilize the online auction system, a person 
will need to be pre-approved by the company based on standards provided by 
the entity hosting the auction. Beta-testing is the last stage of testing for 
a computer product prior to its commercial release.  Beta-testing usually 
involves sending the product to test sites outside the company for real world 
exposure.  Online auction was successfully beta-tested by CSX in December 
1998.  Online auction was launched in February 1999.  Online auction needs no 
additional development prior to commercialization, and there are no material 
conditions or uncertainties which need to be resolved prior to 
commercialization.
    

     CAMPUS NETWORK

     The company developed Campus Network to allow individuals of 
organizations to build customized, up-datable web sites.  Management expects 
to offer Campus Network to alumni,  student groups and organizations, and 
fraternities and sororities.  Campus Network will allow each individual to 
have his own customized web site, and also to be a part of a group web site.  
Campus Network utilizes the SiteBlazer.com program and the SITEBLAZER 
network.  Campus Network was fully beta-tested in November 1998.  Campus 
Network was launched in January 1999.  Campus Network needs no additional 
development prior to commercialization, and there are no material conditions 
or uncertainties which need to be resolved prior to commercialization.

     HUNTING AND FISHING.COM

     The company is developing Hunting and Fishing.com and expects it to 
become one of the most comprehensive collections of hunting and fishing 
resources on the Internet.  The company plans to utilize SiteBlazer.com and 
the SITEBLAZER network technology for classified advertisements on Hunting 
and Fishing.com's searchable catalogs to search for: merchandise, hunting and 
fishing equipment, hunting and fishing licenses/leases, locations to visit 
and where to stay, state parks and wildlife, hunting seasons and hunting and 
fishing regulations. Hunting and Fishing.com will allow users to maintain an 
independent web site, while at the same time being part of a network.  
Hunting and Fishing.com is 60 % complete.  The expected launch date is Fall 
1999. The company is not aware of any material conditions or uncertainties 
which need to be resolved prior to commercialization.

     LEGAL NET

     The company is developing a legal network to utilize the technology of 
the SITEBLAZER network to offer web sites to attorneys and law firms.  The 
company expects attorneys and law firms to utilize Legal Net to increase the 
exposure of their web sites by targeting specific topics which will raise the 
likelihood of placement/selection on search engines.  Legal Net is complete, 
but has not been beta-tested.  The expected launch date is summer 1999.  The 
company is not aware of any material conditions or uncertainties which need 
to be resolved prior to commercialization.

COMMERCE PARTNER

     ARFRA

     The company owns a 30% interest in ARFRA, an Internet provider of pet 
medical records.  ARFRA provides documented medical records detailing a pet's 
medical history in the event that an unexpected medical emergency should 
arise, or simply to provide a more organized record of a pet's medical 
history. ARFRA provides all participating veterinarians from anywhere in the 
continental United States, timely access to a pet's medical history. With 
ARFRA, pet-owners have the ability to offer timely, life-saving information 
to all emergency veterinary personnel by presenting an ARFRA access card to 
any veterinarian and the pet's medical history will be available twenty-four 
hours a day, three hundred and sixty-five days a year.  Each record is 
securely protected by a personal identification number.  The annual 
cardmember fee is only $25 per year.  Nominal update fees may be assessed 
depending upon the veterinarian visited.  ARFRA also offers a unique service 
called pet-locator.  By simply contacting any participating veterinarian, 
pet-owners now have the unique ability to immediately post a "Lost Pet" 
bulletin to the network.  The bulletin will remain a part of the network 
records until ARFRA is notified of a pet's recovery.  To further assist in 
the recovery effort, ARFRA will broadcast a personal e-mail message about a 
missing pet to all ARFRA cardmembers in a member's specific area.  In 
addition, ARFRA allows pet-owners the ability to identify a veterinarian 
through "Vet Locator."  Vet Locator is a network catalog of licensed 
veterinarians throughout the United States that is provided on a 
complimentary basis to all members.  The company expects to 

                                       17



utilize SITEBLAZER technology, allowing pet owners and prospective pet owners 
to design web sites for:  the purchase and sale of pets, grooming/breeding 
and care of pets, and a pet cemetery. The sites will be indexed in a search 
engine specific to ARFRA and with the same restrictions as the SITEBLAZER 
network.  ARFRA currently does not have any revenues, and has not distributed 
any dividends.  In addition, other than test participants, there are 
currently no participating pets or vets in the ARFRA system.  The company can 
provide no assurance that ARFRA will become profitable in the future.  The 
majority shareholder of ARFRA has granted the company an option to purchase 
the remaining 70% of ARFRA in exchange for 10,000 shares of company common 
stock.

                                AFFILIATED TRANSACTION
   
NETTRADE ONLINE, L.L.C.

     In November 1997, the company entered into an agreement with NetTrade 
Online, L.L.C., a Texas limited liability company, to design, develop, 
produce and install a computer program and related materials consisting of an 
interactive web site providing real time/on-line trading of various 
commodities, incorporating functions commercially available at the time.  The 
company agreed to provide all system engineering services necessary to 
design, develop, produce, install, and maintain the program and the hardware. 
These services include, but are not limited to, special studies, programming 
and application design and development, systems analysis and design, 
conversion and implementation planning, and installation evaluation.  The 
company intends to expand this technology to other commodities.  NetTrade 
paid the company $80,000 in connection with this agreement.  Webvest, Inc., a 
company owned by Messrs. White, Magness and Finn, has a 20% ownership 
interest in NetTrade.

     NetTrade has been fully beta-tested, and was launched in April 1999. 
NetTrade needs no additional development prior to commercialization, and 
there are no material conditions or uncertainties which need to be resolved 
prior to commercialization.  Over three hundred individuals have listed for 
trading on NetTrade, and transactions have been consummated.
    

SALES AND MARKETING

     The company markets its products and services through a marketing staff 
using both telemarketing and direct sales.  The company advertises its 
products and services through several media sources including trade journals 
and radio advertising.  The company is in the process of developing a 
television media campaign.  The company attends numerous trade shows in the 
Internet, high technology, and business markets, while further supplementing 
its sales efforts with space advertising and product and services listings in 
appropriate directories.

COMPETITION

     The market for customers, visitors and related products and services are 
intensely competitive and such competition is expected to continue to 
increase. There are no substantial barriers to entry in this market and the 
company believes that its ability to compete depends upon many factors within 
and beyond its control, including:

     -    timing and market acceptance of new products and services developed by
          the company and its competitors,

     -    customer service and support,

     -    sales and marketing efforts, and

     -    the ease of use, performance, price and reliability of the company's
          products and services.
     
     The company competes with:

     -    Internet content providers and ISPs, including web directories,

     -    search engines,

     -    shareware archives,

     -    content sites,

     -    commercial online services and sites maintained by Internet service
          providers,

                                       18



     -    as well as thousands of Internet sites operated by individuals and
          government and educational institutions.

The company believes that the principal competitive factors in attracting 
customers include the amount of traffic on its web site, brand recognition, 
customer service, the demographics of the company's customers and viewers, 
the company's ability to offer targeted audiences and the overall 
cost-effectiveness of the products and services offered by the company.  The 
company believes that the principal competitive factors in attracting search 
engines to a customer's web site include the company's design, title, meta 
tags descriptions and key words.  The company believes that the number of 
Internet companies relying on revenues from their company web site will 
increase substantially in the future. In turn, the company will likely face 
increased competition, resulting in increased pricing pressures on its web 
site design rates which could in turn have a material, adverse effect on the 
company's business.

RESEARCH AND DEVELOPMENT

     The company develops and markets a variety of Internet related products 
and services, as well as a number of database software technologies.  These 
industries are characterized by rapid technological development.   The 
company believes that its future success will largely depend upon its ability 
to continue the enhancement of its existing products and services and the 
development of other products and services which complement existing ones.  
To date, the company has incurred nominal research and development expenses.  
In order to respond to rapidly changing competitive and technological 
conditions, the company expects to incur significant research and development 
expenses during the initial development phase of new products and services as 
well as on an on-going basis with established products.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

     The company 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. 
The company currently has no patents or patents pending and has not filed 
for patent protection, and does not anticipate that patents will become a 
significant part of the company's intellectual property in the future. 

     The company pursues the registration of its trademarks in the United 
States and internationally.  The company has applied for the registration of 
the service mark and trademark SITEBLAZER and is in the process of applying 
for the registration of the trademark Politicalnet in the United States.  The 
company is applying for a European Community Trademark for international 
protection of SITEBLAZER in every country in the European Community.  
Effective trademark, service mark, copyright and trade secret protection may 
not be available in every country in which the company's services are 
distributed or made available through the Internet, and policing unauthorized 
use of the company's proprietary information is difficult.

     The company currently licenses certain technologies to other companies 
and utilizes an independent reseller to market and distribute the company's 
products and services.  The company has entered into the following material 
agreements: 

     -    In September 1997, the company entered into an agreement with
          Websource Media in which the company agreed to transport Internet
          protocol packets from Websource Media to the Internet and from the
          Internet to Websource Media.  Websource Media paid a setup fee of $480
          in connection with this agreement and pays the company fees based on
          the number of hits per day. This agreement automatically renews for
          successive one-month terms at the company's then month-to-month rates.

     -    In June 1998, the company entered into a software reseller agreement
          with Bauge in which the company granted Bauge a non-exclusive license
          to market and distribute software products manufactured and hosted by
          the company in return for royalty payments based on gross revenues of
          basic web sites and various other royalty payments.  In June 1999, the
          agreement will automatically renew for successive one-year terms upon
          Bauge achieving certain sales levels.

     -    In January 1999, the company entered into a software reseller
          agreement Eduardo F. Azcoitia, dba Proses, in which the company
          granted Proses the non-exclusive right to market and distribute
          software products manufactured by the company in Mexico, Columbia and
          the Untied States.  The company receives a percentage of products sold
          by Proses. 

                                       19



     -    In March 1999, the company entered into a three year joint marketing
          agreement with West Marketing Services Corporation in which the
          company granted West the exclusive right to direct telemarketing of
          the company's Internet web site services in North America.  In order
          to retain the exclusivity provision of the agreement, West is required
          to maintain certain minimum volume requirements.  The company receives
          a percentage of any sales made by West.  The agreement automatically
          renews for successive three year terms.

     -    In April 1999, the company entered into a license and service
          agreement with Axis Technologies Corp. In which the company agreed to
          grant Axis a non-exclusive license to utilize the company's Internet
          web site generation application and market and sell the company's
          products to Axis existing and future customers in the United States. 
          The company is entitled to receive a percentage of monthly gross
          revenues generated by Axis.

The company enters into confidentiality agreements with respect to its 
proprietary technology and limits access to, and distribution of its 
proprietary information.

   
EMPLOYEES

     As of May 3, 1999, the company employed approximately 21 persons on a 
full-time basis.  None of the company's employees are represented by a labor 
union. The company has entered into non-disclosure and non-competition 
agreements with its key personnel which provide that upon the termination of 
employment with the company for any reason, the individual will not compete 
with the company for two years.  The company believes the non-compete 
covenants comply with state law, however, the company can provide you no 
assurances that a state court may determine not to enforce or only partially 
enforce such covenants.  The company believes that its relations with its 
employees are good.
    

                               DESCRIPTION OF PROPERTY

     The company currently leases approximately 6,643 square feet of office 
space in Houston, Texas.  The lease expires in October 2000 and the monthly 
rental is currently $7,196.  The company believes that its existing 
facilities are adequate to meet its current needs and to accommodate 
anticipated growth.

                               AVAILABLE INFORMATION

     The SEC maintains a web site on the Internet that contains reports, 
proxy and information statements and other information regarding companies 
that file electronically with the SEC.  The address of the site is 
http:\\www.sec.gov. Visitors to the site may access such information by 
searching the EDGAR data base on the site.

     Prior to the date of this prospectus, the company was not subject to the 
information and reporting requirements of the Securities Exchange Act of 
1934. As a result, the company will become subject to such requirements and 
begin filling periodic reports, proxy materials and other information with 
the SEC. The company will provide its shareholders with annual reports 
containing audited financial statements and, if determined to be feasible, 
quarterly reports for the first three quarters of each fiscal year containing 
unaudited financial information.  The company has filed a registration 
statement on Form SB-2 under the Securities Act, with respect to the 
securities being registered.  This prospectus does not contain all the 
information set forth in the registration statement and its exhibits and 
schedules, to which reference is made.  Copies of the registration statement 
and its exhibits are on file at the offices of the SEC and may be obtained 
upon payment of the fees prescribed by the SEC or may be examined, without 
charge, at the public reference facilities of the SEC, 450 Fifth Street, 
N.W., Washington D.C. 20549.  The public may obtain information on the 
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. 
Upon request, the company will provide without charge to each person who 
receives a copy of the prospectus, a copy of any of the information that is 
incorporated by reference in this prospectus (not including exhibits to the 
information that is incorporated by reference unless the exhibits are 
themselves specifically incorporated by reference).  Any request for 
information should be directed to the company, attention Harry L. White, at 
1770 St. James, Suite 420, Houston, Texas 77056, (713) 627-9494.

                                       20



                                     MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     The company's directors and executive officers are: 

     NAME                      AGE  POSITION
     ----                      ---  --------
     Harry L. White            40   Chairman, Chief Executive Officer,
                                    President, Treasurer and Secretary

     Richard J. Finn           22   Chief Technical Officer and Director

     Lee A. Magness            34   Chief Financial Officer, General Counsel
                                    and Director

     HARRY L. WHITE has served as chairman, chief executive officer, 
president, secretary and treasurer of the company since inception.  Since May 
1998, Mr. White has served as a director of PinkMonkey.com, Inc., an Internet 
publisher of educational study aids.  From December 1986 through February 
1997, Mr. White worked at Air Products and Chemicals, a hydrogen production 
company, as the senior plant technician from December 1996 to February 1997.  
Mr. White also served as an ISO 9000 Manager from January 1994 to February 
1997.

     RICHARD J. FINN has served as chief technical officer and director of 
the company since inception.  From December 1995 through February 1997, Mr. 
Finn served as the assistant webmaster for Neosoft, Inc., an Internet service 
provider.  From August 1995 through December 1995, Mr. Finn served as the 
assistant network administrator of Cybersim, an Internet service provider. 
From October 1994 through August 1995, Mr. Finn served as an assistant 
network administrator for Triconex Systems, Inc.

     LEE A. MAGNESS has served as chief financial officer, general counsel 
and director of the company since inception.  Since August 1993, Mr. Magness 
has served as a financial consultant to various individuals and corporations. 
Prior to receiving his law degree from Thurgood Marshall School of Law, Mr. 
Magness served as a senior economic analyst at Transco Energy Corporation.

     All executive officers of the company are chosen by the board of 
directors and serve at the board's discretion.  There are no family 
relationships among the company's officers and directors.  The company plans 
to reimburse directors for any expenses incurred in attending board of 
directors and Year 2000 board committee meetings.

                               EXECUTIVE COMPENSATION

     The following table sets forth information with respect to the chief 
executive officer of the company for the fiscal year ended July 31, 1998 and 
from inception (August 9, 1996) through July 31, 1997.  No other executive 
officers of the company received total annual salary and bonus for the fiscal 
years ended July 31, 1998 or July 31, 1997 in excess of $100,000. 

                              SUMMARY COMPENSATION TABLE
   


                                                                           LONG-TERM
   NAME AND PRINCIPAL    FISCAL                           OTHER ANNUAL    COMPENSATION     ALL OTHER
        POSITION          YEAR      SALARY     BONUS    COMPENSATION(1)     OPTIONS      COMPENSATION
        --------          ----      ------     -----    ---------------     -------      ------------
                                                                       
Harry L. White,           1998     $70,000
Chief Executive           1997     $30,000(2)
Officer and President

    
______________
(1)  The named executive officer did not receive perquisites or other benefits
     valued in excess of 10% of the total reported annual salary and bonus.
(2)  This amount has not been paid to date and is currently being accrued. 

                                       21



EMPLOYMENT AGREEMENTS

     In August 1996, Messrs. White, Finn and Magness entered into five year 
written employment contracts that provide for a base salary of $30,000 for 
the first year, $70,000 for the second year, and $120,000 annually for years 
three through five.  In addition, these employment agreements entitle each of 
these individuals to an annual bonus of 1% of the company's earnings before 
income taxes and depreciation in excess of $5,000,000.  In addition to 
salary, beginning in August 1998, Messrs. White, Finn and Magness each 
receive $600 per month as a car allowance and $200 per month for 
miscellaneous expenses.  If the company terminates an employment contract 
with cause, such executive will not engage in certain activities in 
competition with the company for a period of six months following such 
termination.  The company believes the non-compete covenants comply with 
state law, however, the company can provide you no assurances that a state 
court may determine not to enforce or only partially enforce such covenants.

STOCK OPTIONS

     In August 1998, the Board of Directors and stockholders adopted a stock 
option plan under which 500,000 shares of common stock have been reserved for 
issuance.  As of the date of this prospectus, options to purchase 288,000 
shares of company common stock have been granted pursuant to the plan.  The 
company does not have a defined benefit plan or any retirement or long-term 
incentive plans.

                                PRINCIPAL STOCKHOLDERS

     The following table presents certain information regarding the 
beneficial ownership of all shares of the company common stock by (i) each 
person who owns beneficially more than five percent of the outstanding shares 
of common stock, (ii) each director of the company, (iii) each named 
executive officer, and (iv) all directors and officers as a group. 


                                     SHARES          
                                  BENEFICIALLY       PERCENTAGE OF
NAME OF BENEFICIAL OWNER(1)          OWNED           VOTING POWER 
                                               
Harry L. White                      4,488,000            27.3%

Richard J. Finn                     4,488,000            27.3%

Lee A. Magness                      4,207,500            25.6%

All directors and officer as       13,183,500            80.2%
a group (3 persons)

____________
(1)  The business address of each individual is the same as the address of the
company's principal executive offices.

   
                                CERTAIN TRANSACTIONS

     In August 1996, the company issued 4,488,000 shares of common stock to 
Harry L. White, 4,488,000 shares of common stock to Richard J. Finn, 
4,207,500 shares of common stock to Lee A. Magness, 726,000 shares of common 
stock to Essitam Capital, Ltd., 709,500 shares of common stock to Sonsonate 
Capital, Ltd., and 660,000 shares of common stock to Seyat Capital, Ltd. for 
nominal consideration in connection with the company's formation.  Peter 
Eberly is president and director of Essitam Capital Ltd., Timur Pulatoe is 
president and director of Sonsonate Capital, Ltd., and Woodward L. Terry is 
president and director of Seyat Capital, Ltd.

     In July 1997, Messrs. White and Magness loaned the company $5,378 and 
$15,897, respectively.  These loans bore interest at the rate of 6% per annum 
and were repaid as of July 31, 1998.

     In November 1997, the company entered into an agreement with NetTrade 
for the design, development, production and installation of a computer 
program consisting of an interactive web site on the Internet providing 

                                       22



real time/on-line trading of commodities.  The company received $80,000 in 
connection with this agreement.  Webvest, Inc., a company owned by Messrs. 
White, Magness and Finn, has a 20% ownership interest in NetTrade. 

     In April 1998, Mr. Magness purchased 70,000 shares of PinkMonkey.com 
common stock in a private placement for an aggregate purchase price of 
$35,000.

     In April 1998, Harry L. White, a director of PinkMonkey.com, was issued 
a three year warrant to purchase 100,000 shares of PinkMonkey.com common 
stock at an exercise price of $.625 per share in consideration for services 
rendered. 

     In September 1998, the company issued 750,000 shares of common stock to 
PinkMonkey.com in consideration for $10 and services rendered. The company 
designed PinkMonkey.com's web page and has continued to provide hosting, 
maintenance and marketing services for PinkMonkey.com  To date, 
PinkMonkey.com has paid the company approximately $266,492 for these 
services, which was comprised of $127,025 in marketing and advertising fees, 
$14,250 in monthly site hosting, $6,050 in monthly maintenance and $119,167 
in web site design, web site programming, licenses, set up and equipment 
fees.  PinkMonkey.com has been a customer of the company since October 1997, 
and as such assisted in the company's development.   Principals of  
PinkMonkey.com have provided ongoing business advice to the company 
including: (1) assistance in the development of the company's business plan, 
(2) budget design, (3)market opportunity identification, and (4) 
identification of acquisition and/or merger candidates. For the provision of 
these ongoing services by principals of PinkMonkey.com, the company initially 
issued PinkMonkey.com approximately 4,550 shares of company common stock.  
The issuance was made in July 1998.  On August 19, 1998, the company effected 
a forward stock split of 165 for 1 for shareholders of record as of that 
date.  Accordingly, the shares of company common stock held by PinkMonkey.com 
increased from 4,550 to 750,000.  The company's accountants valued the common 
stock issued to PinkMonkey.com at $749,990 in accordance with the Financial 
Accounting Standards Board Statement in its Emerging Issues Task Force Issue 
96-18, ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE ISSUED OTHER THAN TO 
EMPLOYEES FOR ACQUIRING OR IN CONJUNCTION WITH SELLING, GOODS OR SERVICES 
which requires that shares issued for services rendered be valued similarly 
to shares sold by the company within the same time period.
    

                              DESCRIPTION OF SECURITIES

     The company is authorized to issue up to 55,000,000 shares, of which 
50,000,000 shares are no par value common stock, and 5,000,000 shares are 
preferred stock, par value $.01 per share.

COMMON STOCK

     The holders of shares of common stock are entitled to one vote per share 
on each matter submitted to a vote of stockholders.  In the event of 
liquidation, holders of common stock are entitled to share ratably in the 
distribution of assets remaining after payment of liabilities, if any.  
Holders of common stock have no cumulative voting rights, and, accordingly, 
the holders of a majority of the outstanding shares have the ability to elect 
all of the directors. Holders of common stock have no preemptive or other 
rights to subscribe for shares. Holders of common stock are entitled to such 
dividends as may be declared by the board of directors out of legally 
available funds. The outstanding common stock is, and the common stock to be 
outstanding upon completion of this offering will be, validly issued, fully 
paid and non-assessable.

PREFERRED STOCK

   
     The company's board of directors has the authority to issue up to 
5,000,000 shares of preferred stock without any further vote or action by the 
stockholders, and to determine the price, rights, preferences, privileges and 
restrictions, including voting rights of those shares.  Since the preferred 
stock could be issued with voting, liquidation, dividend and other rights 
superior to those of the common stock, the rights of the holders of common 
stock will be subject to, and may be adversely affected by, the rights of the 
holders of preferred stock.  The issuance of preferred stock could make it 
more difficult for a third party to acquire a majority of our outstanding 
voting stock. 
    

TRANSFER AGENT

     The company's transfer agent is Continental Stock Transfer & Trust 
Company, 2 Broadway, New York, New York 10004.

                                       23



                           SHARES ELIGIBLE FOR FUTURE SALE

     There are 16,281,633 shares of common stock currently outstanding.  Upon 
the effectiveness of this registration statement, 252,633 shares of common 
stock will be eligible for immediate resale in the public market if and when 
any market for the common stock develops.  Sales of such shares held by 
affiliates will, however, be subject to the restrictions of Rule 144 
promulgated under the Securities Act.  An affiliate of the issuer is any 
person who directly or indirectly controls, is controlled by, or is under 
common control with, the issuer.  Affiliates of the company may include its 
directors, executive officers, and persons directly or indirectly owning 10% 
or more of the outstanding common stock.  Under Rule 144 resales of common 
stock for the account of affiliates cannot be made until it has been held for 
one year from the later of its acquisition from the company or an affiliate 
of the company. Thereafter, shares of common stock may be resold without 
registration subject to Rule 144's volume limitation, aggregation, broker 
transaction, notice filing requirements, and requirements concerning publicly 
available information about the company.  The volume limitations provide that 
a person (or persons who must aggregate their sales) cannot, within any 
three-month period, sell more than the greater of one percent of the then 
outstanding shares, or the average weekly reported trading volume during the 
four calendar weeks preceding each such sale.

                                PLAN OF DISTRIBUTION

     The 252,633 shares offered by the selling stockholders may be sold by 
one or more of the following methods, without limitation:  (i) ordinary 
brokerage transactions and transactions in which the broker-dealer solicits 
purchases; and (ii) face-to-face transactions between sellers and purchasers 
without a broker-dealer.  In effecting sales, brokers or dealers engaged by 
the selling stockholders may arrange for other brokers or dealers to 
participate.  The brokers or dealers may receive commissions or discounts 
from the selling stockholders in amounts to be negotiated.  The brokers and 
dealers and any other participating brokers or dealers may be deemed to be 
"underwriters" within the meaning of the Securities Act, in connection with 
such sales.  The selling stockholder or dealer effecting a transaction in the 
registered securities is required to deliver a prospectus.  As a result of 
the shares being registered under the Securities Act, holders who 
subsequently resell such shares to the public may be deemed to be 
underwriters with respect to such shares of common stock for purposes of the 
Securities Act, with the result that they may be subject to certain statutory 
liabilities if the registration statement to which this prospectus relates 
contains a material misstatement or omits a statement of material fact.  The 
company has not agreed to indemnify any of the selling stockholders regarding 
this liability. The company will not receive any proceeds from the resale of 
common stock by the selling stockholders.

   
                                 SELLING STOCKHOLDERS

     This prospectus relates to the resale of 252,633 shares of common stock 
by the selling stockholders.  The table below sets forth information with 
respect to the resale of shares of common stock by the selling stockholders.  
The company will not receive any proceeds from the resale of common stock by 
the selling stockholders for shares currently outstanding.

                  RESALE OF COMMON STOCK BY SELLING STOCKHOLDERS 
                             SHARES CURRENTLY OUTSTANDING


                            SHARES                     
                         BENEFICIALLY       AMOUNT OFFERED       SHARES BENEFICIALLY
                         OWNED BEFORE    (ASSUMING ALL SHARES        OWNED AFTER
   STOCKHOLDER              RESALE         IMMEDIATELY SOLD)           RESALE          PERCENTAGE
                                                                           
Ashraf K. Abadir            10,000                10,000                  0%              0%
Jeffrey A. Ballenger         7,000                 7,000                  0%              0%
Stephen Bollman              4,000                 4,000                  0%              0%

                                       24


Andrew B. Doerr(1)           8,366                 8,366                  0%              0%
Leo Detassis                 6,667                 6,667                  0%              0%
Allen G. Dusek               3,000                 3,000                  0%              0%
Debbie Esparza(2)           10,000                10,000                  0%              0%
Richard A. Finn              5,000                 5,000                  0%              0%
W.B. Finn                    1,000                 1,000                  0%              0%
Henry Hailes                10,000                10,000                  0%              0%
Paul Hailes(3)              10,000                10,000                  0%              0%
Arthur Hebron               10,000                10,000                  0%              0%
Lucy Hebron                 10,000                10,000                  0%              0%
Tom Hillman                  2,000                 2,000                  0%              0%
Hannah M. Loev              12,500                12,500                  0%              0%
David L. Magness(4)         15,000                15,000                  0%              0%
Price Lloyd Magness(4)       5,000                 5,000                  0%              0%
Walter L. Magness(4)        22,000                22,000                  0%              0%
Hungson Van Nguyen           3,000                 3,000                  0%              0%
True Lam V. Nguyen           1,000                 1,000                  0%              0%
Dan Nelson                  40,000                40,000                  0%              0%
Chris Truax                 20,000                20,000                  0%              0%
Anthony Rahati               5,000                 5,000                  0%              0%
Steve Reynolds               1,750                 1,750                  0%              0%
Lora W. Rhein               10,000                10,000                  0%              0%
Frank Rhodes                 1,800                 1,800                  0%              0%
Larry Shoemaker              5,000                 5,000                  0%              0%
Don C. Smith                 2,000                 2,000                  0%              0%
Jukka Tolonen                5,800                 5,800                  0%              0%
Keith Ward                     750                   750                  0%              0%
Kevin Work(5)                5,000                 5,000                  0%              0%

________________     
(1)  Andrew B. Doerr, an employee of the company, was awarded 5,000 shares of
     company common stock for services rendered. The remaining shares held be
     Mr. Doerr were purchased by him. 
(2)  Debbie Esparza, an employee of the company, was awarded 10,000 shares of
     company common stock for services rendered.
(3)  Mr. Hailes, an employee of the company purchased the shares held by him.
(4)  These individuals are relatives of Lee Magness an officer and director of
     the company
(5)  Kevin Work, an employee of the company, was awarded 5,000 shares of company
     common stock for services rendered. 
    

                                       25


                                  LEGAL PROCEEDINGS

     The company was a plaintiff in HOUSTON INTERWEB DESIGN, INC. V. LANDRY'S 
SEAFOOD RESTAURANTS, INC. filed in the District Court of Harris County, 
Texas; 133rd Judicial District.  The complaint alleged breach of contract and 
the company sought damages of $300,000.  Landry's filed a counter-claim 
against the company asserting infringement of Landry's federally registered 
trademark LANDRY'S SEAFOOD HOUSE.  The matter was resolved in the company's 
favor and the counter-claim was dropped.

                         DISCLOSURE OF COMMISSION POSITION ON
                    INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

     Insofar as indemnification for liabilities arising under the Securities 
Act may be permitted to directors, officers and controlling persons of the 
small business issuer pursuant to the foregoing provisions, or otherwise, the 
small business issuer has been advised that in the opinion of the SEC such 
indemnification is against public policy as expressed in the Securities Act 
and is, therefore, unenforceable.

     In the event that a claim for indemnification against such liabilities 
(other than the payment by the small business issuer of expenses incurred or 
paid by a director, officer or controlling person of the small business 
issuer in the successful defense of any action, suit or proceeding) is 
asserted by such director, officer or controlling person in connection with 
the securities being registered, the small business issuer will, unless in 
the opinion of its counsel the matter has been settled by controlling 
precedent, submit to a court of appropriate jurisdiction the question whether 
such indemnification by it is against public policy as expressed in the 
Securities Act and will be governed by the final adjudication of such issue.

                                 FINANCIAL STATEMENTS

     The financial statements of the company appearing in this Form SB-2 
Registration Statement for the period from inception (August 9, 1996) to July 
31, 1997, and the year ended July 31, 1998, have been audited by Mann, 
Frankfort, Stein and Lipp, P.C.  The financial statements have been prepared 
assuming that the Rescission Offerees elect not to rescind the purchase of 
the shares.

                                    LEGAL MATTERS

     The validity of the shares of common stock offered hereby will be passed 
upon for the company by Brewer & Pritchard, P. C., Houston, Texas. 

                                       26



HOUSTON INTERWEB DESIGN, INC.
FINANCIAL STATEMENTS
JULY 31, 1998 AND 1997

                                C O N T E N T S


                                                                    Page
                                                                    ----
                                                                 
Independent Auditors' Report ........................................F-2

Balance Sheets ......................................................F-3

Statements of Operations ............................................F-4

Statements of Changes in Stockholders' Deficit ......................F-5

Statements of Cash Flows ............................................F-6

Notes to Financial Statements .......................................F-7


                                      F-1


                         INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Houston InterWeb Design, Inc.

We have audited the accompanying balance sheets of Houston InterWeb Design, 
Inc. as of July 31, 1998 and 1997, and the related statements of operations, 
changes in stockholders' deficit, and cash flows for the year ended July 31, 
1998 and for the period from inception (August 9, 1996) to July 31, 1997. 
These 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 Houston InterWeb Design, 
Inc. as of July 31, 1998 and 1997, and the results of its operations and its 
cash flows for the year ended July 31, 1998 and for the period from inception 
(August 9, 1996) to July 31, 1997 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 shown in the financial statements, the Company incurred a net loss of 
$781,595 for 1998 and has incurred substantial net losses since inception. At 
July 31, 1998, current liabilities exceed current assets by $106,092 and 
total liabilities exceed total assets by $92,427. These factors, and the 
others discussed in Note B, raise substantial doubt about the Company's 
ability to continue as a going concern. The financial statements do not 
include any adjustments relating to the recoverability and classification of 
recorded assets, or the amounts and classification of liabilities that might 
be necessary in the event the Company cannot continue in existence.

MANN FRANKFORT STEIN & LIPP, P.C.


Houston, Texas
September 8, 1998

                                      F-2


HOUSTON INTERWEB DESIGN, INC.
BALANCE SHEETS
   


                                                                                   July 31,
                                                                           ------------------------     January 31,
                                                                              1998           1997          1999
                                                                           ---------       --------     -----------
                                                                                                        (unaudited)
                                                                                               
ASSETS

CURRENT ASSETS
    Cash                                                                   $  18,988       $ 10,204     $    43,640
    Accounts receivable - trade - related parties                             55,259         14,611          23,043
    Accounts receivable - trade - nonaffiliates                               61,012         42,070          28,203
    Deferred income tax asset                                                   -             4,998            -
    Other current assets                                                      10,445          3,226            -
                                                                           ---------       --------     -----------
       TOTAL CURRENT ASSETS                                                  145,704         75,109          94,886

PROPERTY AND EQUIPMENT
    Office equipment                                                           4,056          2,306          10,010
    Furniture and fixtures                                                    13,072         12,490          13,072
                                                                           ---------       --------     -----------
                                                                              17,128         14,796          23,082
    Less:  accumulated depreciation                                            3,463          1,567           4,733
                                                                           ---------       --------     -----------
       TOTAL PROPERTY AND EQUIPMENT                                           13,665         13,229          18,349

INVESTMENT UNDER THE EQUITY METHOD                                              -              -               -
                                                                           ---------       --------     -----------

TOTAL ASSETS                                                               $ 159,369       $ 88,338     $   113,235
                                                                           ---------       --------     -----------
                                                                           ---------       --------     -----------
LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
    Accounts payable and accrued expenses                                  $ 220,086       $127,895     $   307,910
    Advances payable - affiliate                                                -              -             30,000
    Deposits                                                                    -              -             24,976
    Deferred income tax liability                                              2,498           -               -
    Note payable - line of credit                                             29,212           -             29,219
    Notes payable to stockholders                                               -            21,275            -
                                                                           ---------       --------     -----------
       TOTAL CURRENT LIABILITIES                                             251,796        149,170         392,105

STOCKHOLDERS' DEFICIT
    Common stock, no par value, 50,000,000 shares
      authorized, 16,029,000 and 15,279,000 shares
      issued and outstanding at July 31, 1998 and 1997,
      respectively, and 16,281,633 shares issued at
      January 31, 1999                                                       754,000          4,000       1,090,950
    Stock subscriptions receivable                                              -              -            (14,609)
    Accumulated deficit                                                     (846,427)       (64,832)     (1,355,211)
                                                                           ---------       --------     -----------
       TOTAL STOCKHOLDERS' DEFICIT                                           (92,427)       (60,832)       (278,870)
                                                                           ---------       --------     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                $ 159,369       $ 88,338     $   113,235
                                                                           ---------       --------     -----------
                                                                           ---------       --------     -----------

    
                See accompanying notes to financial statements.

                                      F-3


HOUSTON INTERWEB DESIGN, INC.
STATEMENTS OF OPERATIONS

                                                                       Period From
                                                                         Inception
                                                                        (August 9,          Six Months Ended
                                                         Year Ended        1996)               January 31,
                                                          July 31,      to July 31,   -----------------------------
                                                            1998           1997            1999           1998
                                                       --------------  -------------  -------------  --------------
                                                                                       (unaudited)     (unaudited)
                                                                                         
REVENUES

    Affiliates                                         $      110,951  $      22,830  $      41,486  $       80,000
    Nonaffiliates                                             517,119        163,164        217,261         182,437
                                                       --------------  -------------  -------------  --------------
       TOTAL REVENUES                                         628,070        185,994        258,747         262,437

EXPENSES

    Advertising                                                32,620         28,215         33,173          12,173
    Computer equipment                                         25,051         38,248         21,528          16,998
    Consulting costs                                          749,990           -              -               -
    Contract labor                                             68,198         44,755         11,247          21,982
    Depreciation                                                1,896          1,567          1,270             949
    General and administrative                                 20,096          3,605         47,803           3,152
    Interest                                                    6,080          2,690          3,082           3,736
    Internet service                                           29,019          8,073         17,932          11,063
    Professional fees                                          15,288          1,228        201,706            -
    Rent                                                       21,105         10,450         37,449           8,873
    Repairs and maintenance                                     3,474          3,391          2,773           4,205
    Salaries and benefits                                     384,082         93,188        372,222         174,406
    Supplies                                                   26,036         11,461          5,228          11,314
    Telephone                                                  11,797          4,806          5,891           5,814
    Travel                                                      7,437          4,147          8,725           2,404
                                                       --------------  -------------  -------------  --------------
       TOTAL EXPENSES                                       1,402,169        255,824        770,029         277,069
                                                       --------------  -------------  -------------  --------------

INCOME (LOSS) BEFORE FEDERAL
    INCOME TAXES                                             (774,099)       (69,830)      (511,282)        (14,632)

FEDERAL INCOME TAX EXPENSE
    (BENEFIT)
    Deferred                                                    7,496         (4,998)        (2,498)         (1,045)
                                                       --------------  -------------  -------------  --------------

NET LOSS                                               $     (781,595) $     (64,832) $    (508,784) $      (13,587)
                                                       ==============  =============  =============  ==============


NET LOSS PER SHARE, BASIC AND
    DILUTED                                            $       (0.05)  $        -     $      (0.03)  $         -   
                                                       =============   =============  ============   ==============


AVERAGE SHARES OUTSTANDING,
    BASIC AND DILUTED                                      15,341,535     15,279,000     16,128,268      15,279,000
                                                       ==============  =============  =============  ==============


                See accompanying notes to financial statements.

                                       F-4


HOUSTON INTERWEB DESIGN, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
YEAR ENDED JULY 31, 1998 AND PERIOD FROM INCEPTION (AUGUST 9, 1996) TO 
JULY 31, 1997

                                                Common Stock                              Stock
                                        -----------------------------   Accumulated    Subscription
                                            Shares         Amount         Deficit       Receivable        Total    
                                        -------------  --------------  -------------  -------------  --------------
                                                                                      
Contributions                              15,279,000  $        4,000  $        -     $        -     $        4,000

Net loss, period from inception
   (August 9, 1996) to July 31, 1997             -               -           (64,832)          -            (64,832)
                                        -------------  --------------  -------------  -------------  --------------

Balance, July 31, 1997                     15,279,000           4,000        (64,832)          -            (60,832)

Issuance of common stock, issued
   as compensation                            750,000         750,000           -              -            750,000

Net loss, year ended July 31, 1998               -               -          (781,595)          -           (781,595)
                                        -------------  --------------  -------------  -------------  --------------

Balance, July 31, 1998                     16,029,000         754,000       (846,427)          -            (92,427)

Net loss, six months ended
   January 31, 1999 (unaudited)                  -               -          (508,784)          -           (508,784)

Issuance of common stock
   (unaudited)                                160,133         198,200           -              -            198,200

Issuance of common stock as
   compensation (unaudited)                    20,000          30,000           -              -             30,000

Issuance of common stock for
   services rendered (unaudited)               72,500         108,750           -              -            108,750

Stock subscription receivable                    -               -              -           (14,609)        (14,609)
                                        -------------  --------------  -------------  -------------  --------------

Balance, January 31, 1999
   (unaudited)                             16,281,633  $    1,090,950  $  (1,355,211) $     (14,609) $     (278,870)
                                        =============  ==============  =============  =============  ==============


                See accompanying notes to financial statements.

                                       F-5


HOUSTON INTERWEB DESIGN, INC.
STATEMENTS OF CASH FLOWS


                                                                        Period From
                                                                         Inception
                                                                         (August 9,        Six Months Ended
                                                           Year Ended      1996)              January 31,
                                                            July 31,    to July 31,    -------------------------
                                                              1998         1997           1999          1998
                                                           ----------   -----------    -----------   -----------
                                                                                       (unaudited)   (unaudited)
                                                                                         
CASH FLOWS FROM OPERATING
  ACTIVITIES
    Net loss                                               $(781,595)    $(64,832)     $(508,784)     $(13,587)

    Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
       Depreciation                                            1,896        1,567          1,270           949
       Deferred income tax expense (benefit)                   7,496       (4,998)        (2,498)       (1,045)
       Common stock issued as compensation                   749,990         -           138,750          -
    Changes in assets and liabilities:
       Accounts receivable                                   (59,590)     (56,681)        65,025       (25,451)
       Deposits                                                 -            -            24,976          -
       Other current assets                                   (7,219)      (3,226)        10,445         2,287
       Accounts payable and accrued expenses                  92,191      127,895         87,824        76,075
                                                           ----------   -----------    -----------   -----------
                                                             784,764       64,557        325,792        52,815
                                                           ----------   -----------    -----------   -----------
       NET CASH PROVIDED BY (USED IN)
         OPERATING ACTIVITIES                                  3,169         (275)      (182,992)       39,228

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                        (2,332)     (14,796)        (5,954)       (2,332)

CASH FLOWS FROM FINANCING ACTIVITIES
    Advances from affiliate                                     -            -            30,000          -
    Net proceeds (repayments) from notes payable             (21,275)      21,275           -          (21,275)
    Net proceeds from line of credit                          29,212         -                 7        26,689
    Proceeds from issuance of common stock                        10        4,000        198,200          -
    Increase in stock subscriptions receivable                  -            -           (14,609)         -
                                                           ----------   -----------    -----------   -----------
       NET CASH PROVIDED BY (USED IN)
         FINANCING ACTIVITIES                                  7,947       25,275        213,598         5,414
                                                           ----------   -----------    -----------   -----------

NET INCREASE IN CASH                                           8,784       10,204         24,652        42,310

CASH AT BEGINNING OF PERIOD                                   10,204         -            18,988        10,204
                                                           ----------   -----------    -----------   -----------

CASH AT END OF YEAR                                        $  18,988     $ 10,204      $  43,640      $ 52,514
                                                           ----------   -----------    -----------   -----------
                                                           ----------   -----------    -----------   -----------
SUPPLEMENTAL CASH FLOW
  INFORMATION
    Interest paid                                          $   6,080     $  2,690      $   3,082      $  3,736
                                                           ----------   -----------    -----------   -----------
                                                           ----------   -----------    -----------   -----------
SUPPLEMENTAL NONCASH FINANCING
  ACTIVITIES
    July 31, 1998 issuance of 750,000 common
      shares in exchange for consulting services           $ 749,990     $   -         $    -         $   -
                                                           ----------   -----------    -----------   -----------
                                                           ----------   -----------    -----------   -----------
    January 31, 1999 issuance of 92,500
      common shares as compensation and for
      services rendered                                    $    -        $   -         $ 138,750      $   -
                                                           ----------   -----------    -----------   -----------
                                                           ----------   -----------    -----------   -----------


                See accompanying notes to financial statements.

                                      F-6


   
HOUSTON INTERWEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JULY 31, 1998 AND INITIAL PERIOD ENDED JULY 31, 1997
(INFORMATION SUBSEQUENT TO JULY 31, 1998 IS UNAUDITED)


NOTE A - NATURE OF OPERATIONS

Houston InterWeb Design, Inc. (the Company) was incorporated in the State of
Texas in August, 1996. The Company is engaged in the design and creation of
internet websites for customers. The Company uses internally developed
technology for the creation of websites, which it licenses to customers, which
ensures that customers websites are brought up in front of an internet user
irrespective of the search engine used.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION: The accompanying financial statements have been prepared
assuming the Company will be able to continue as a going concern. The Company
has a working capital deficit of $106,092 and a stockholders' deficit of $92,427
at July 31, 1998, and experienced significant losses in fiscal 1998 which raise
doubts about the Company's ability to generate sufficient cash flow to meet its
obligations on a timely basis, to obtain additional financing or capital and to
refinance its debt and ultimately attain profitable operations.

Management's plans include the following:

- -    Increasing revenues by attracting new customers by increasing its sales and
     market operations to develop an awareness by potential customers of the
     Company's ability to create valuable interactive web sites.

- -    As described in Note J, the Company recently entered into a contract with a
     corporation (reseller) to market and distribute software products
     manufactured and hosted by the Company. The amount of revenue, if any, as a
     result of the above contract cannot presently be determined.

- -    Obtaining equity capital or debt financing.

PROPERTY AND EQUIPMENT: Property and equipment is stated at cost with
depreciation calculated using the straight-line method over its estimated useful
lives ranging from five to ten years. When assets are retired or otherwise
removed from the accounts, any resulting gain or loss is reflected in income for
the period. The cost of maintenance and repairs is charged to expense as
incurred and significant renewals and improvements are capitalized.

REVENUE RECOGNITION: Revenues are recognized as services are provided, in
accordance with customer agreements. For the year ended July 31, 1998, revenues
from significant customers totaled $368,572. Included in this amount is $80,000
earned from a nonrecurring customer. Royalty income from website or other
related licensing agreements is recognized as it is earned per the individual
terms of each royalty agreement, and is generally comprised of a minimum amount
which varies by customer, plus a stated percentage of the applicable licensee's
sales. The minimum amount is recognized upon completion of the design and
development of the InterWeb web site and placing the web site into the
siteblazer network at which time the Company has completed all obligations under
the licensing agreement. The Company uses the direct write-off method in
accounting for bad debts, the results of which are not materially different from
the allowance method.

                                       F-7


HOUSTON INTERWEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JULY 31, 1998 AND INITIAL PERIOD ENDED JULY 31, 1997
(INFORMATION SUBSEQUENT TO JULY 31, 1998 IS UNAUDITED)


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES: The liability method is used in accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using anticipated tax rates and laws that will be in effect
when the differences are expected to reverse. The realizability of deferred tax
assets are evaluated annually and a valuation allowance is provided if it is
more likely than not that the deferred tax assets will not give rise to future
benefits in the Company's tax returns.

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

UNAUDITED INTERIM INFORMATION: The accompanying financial information as of
January 31, 1999 and for the six months ended January 31, 1999 and 1998 has been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. The financial statements reflect all
adjustments, consisting of normal recurring accruals which are, in the opinion
of management, necessary to fairly present such information in accordance with
generally accepted accounting principles.

NOTE C - INVESTMENTS UNDER THE EQUITY METHOD

At July 31, 1998, the Company owned a 30% interest in an internet provider of
pet medical records (the investee). The Company obtained this ownership interest
in exchange for providing its internet website search engine technology to this
investee. The Company believes the fair value of these services provided to this
investee to be de minimis, and therefore, has recorded its 30% ownership
interest in this investee at a zero basis on its balance sheet. Additionally, at
July 31, 1998 and January 31, 1999, the activities of the investee had not
commenced.

NOTE D - NOTE PAYABLE

Note payable consist of the following:


                                                                                    July 31,        
                                                                           -------------------------
                                                                              1998           1997   
                                                                           ----------     ----------
                                                                                    
     Revolving line of credit with a bank, providing for $30,000 maximum
         borrowings; uncollateralized, bearing interest at prime plus 1%;
         interest payable monthly, principal payable on demand at the 
         bank's option.                                                    $   29,212     $       -   
                                                                           ==========     ==========   


                                       F-8


HOUSTON INTERWEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JULY 31, 1998 AND INITIAL PERIOD ENDED JULY 31, 1997
(INFORMATION SUBSEQUENT TO JULY 31, 1998 IS UNAUDITED)


NOTE E - INCOME TAXES

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at July 31, 1998 and
1997 are as follows:


                                                                                       July 31,        
                                                                           -------------------------------
                                                                                1998             1997   
                                                                           -------------     -------------
                                                                                       
     Deferred tax assets:
         Net operating loss carryforward                                   $     290,373     $       5,177
         Cash-to-accrual differences                                                -                4,998
                                                                           -------------     -------------

     Total gross deferred tax assets                                             290,373            10,175
     Less:  valuation allowance                                                  290,373             5,177
                                                                           -------------     -------------
                                                                                    -                4,998
     Deferred tax liabilities:
         Tax over book depreciation                                                 (371)             -
         Cash-to-accrual differences                                              (2,127)             -   
                                                                           -------------     -------------

     Total gross deferred tax liabilities                                         (2,498)             -   
                                                                           -------------     -------------

     Net current deferred tax assets (liability)                           $      (2,498)    $       4,998
                                                                           =============     =============


The Company has net operating loss carryforwards of approximately $854,000 as 
of July 31, 1998, which expire through the year 2013. Valuation allowances 
have been provided for all net operating losses due to lack of evidence of 
future recoverability at July 31, 1998.

The difference between the reported income tax expense (benefit) and the 
income tax expense (benefit) computed by multiplying the loss before income 
taxes by the federal statutory income tax rate is as follows:


                                                                                 Year Ended July 31,
                                                                           -------------------------------
                                                                                1998             1997   
                                                                           -------------     -------------
                                                                                       
     Current tax benefit computed at federal
       statutory tax rate                                                  $    (263,194)    $     (23,742)
     Effect of marginal tax brackets                                                -               11,284
     Change in valuation allowance                                               285,196             5,177
     Other                                                                       (14,506)            2,283
                                                                           -------------     -------------
     Total income tax expense (benefit)                                    $       7,496     $      (4,998)
                                                                           =============     =============


                                       F-9


HOUSTON INTERWEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JULY 31, 1998 AND INITIAL PERIOD ENDED JULY 31, 1997
(INFORMATION SUBSEQUENT TO JULY 31, 1998 IS UNAUDITED)


NOTE F - RELATED PARTY TRANSACTIONS

The Company has notes payable to its stockholders, unsecured, with interest
payable at 6%, maturing July 31, 1998. Interest expense on these notes totaled
approximately $293 in 1998 and $1,660 in 1997. The following is a summary of
notes payable to stockholders:


                                                   July 31,            
                                        -------------------------------
                                             1998             1997     
                                        -------------     -------------
                                                    
     Lee Magness                        $        -        $      15,897

     Harry White                                 -                5,378
                                        -------------     -------------

                                        $        -        $      21,275
                                        =============     =============




In July 1998, the Company issued 4,545.4545 shares of its common stock to a 
publicly traded related party (certain officers and stockholders of the 
Company are directors and own stock in the related party) in exchange for ten 
dollars cash consideration and various consulting services provided. After 
giving effect to the 165 for 1 common stock split discussed below in Notes H 
and I, the amount of shares issued to this related party became 750,000. In 
accordance with Financial Accounting Standards Board Statement in its 
Emerging Issues Task Force Issue 96-18, ACCOUNTING FOR EQUITY INSTRUMENTS 
THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN CONJUNCTION WITH 
SELLING, GOODS OR SERVICES, $749,990 was recognized as consulting costs to 
account for the fair value of the consulting services received from this 
related party.

As of July 31, 1998, the Company has recognized revenue of approximately 
$30,951 in connection with a web site marketing program between the Company 
and the related party described above. The Company had a receivable from the 
related party of $17,894 as of July 31, 1998 which has been recorded in 
accounts receivable related parties in the balance sheet.

Additionally, the Company recognized revenue of $80,000 for the year ended 
July 31, 1998 for services performed for a related party (an officer of the 
Company is a director of the related party) of which $37,365 remains 
uncollected at July 31, 1998 and has been included as accounts receivable - 
affiliates.

NOTE G - COMMITMENTS AND CONTINGENCIES

The Company's minimum rental commitments under a noncancelable operating 
lease for office space is as follows:


              Years Ending July 31,
              ---------------------
                                                      
                      1999                               $      86,360
                      2000                                      86,360
                      2001                                      21,590
                                                         -------------
                                                         $     194,310
                                                         =============

                                      F-10


HOUSTON INTERWEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JULY 31, 1998 AND INITIAL PERIOD ENDED JULY 31, 1997
(INFORMATION SUBSEQUENT TO JULY 31, 1998 IS UNAUDITED)


NOTE G - COMMITMENTS AND CONTINGENCIES (CONTINUED)

Total rental expense for the year ended July 31, 1998 was $21,105 and for the 
initial period ended July 31, 1997 was $10,450.

The Company has instituted legal proceedings against a party for breach of 
contract seeking damages of $300,000. The party has made a counter claim 
against the Company, but has not plead any amount of damages. Management is 
of the opinion that the counter claim filed by the party is without basis and 
that the Company will prevail. Accordingly, no gain or loss has been accrued 
in these financial statements pertaining to these proceedings. In January 
1999, in accordance with a confidential and mutual release and settlement 
agreement, the Company received nominal consideration in exchange for the 
mutual releases of all parties.

The Company has employment agreements with three of its stockholders 
providing a base annual salary through August, 2001. The base salary may be 
increased at the Company's option. In addition, this employment agreement 
entitles each of these stockholders to an annual bonus of 1% of the Company's 
earnings (before income taxes and depreciation) in excess of $5,000,000. 
Minimum annual commitments under these agreements amount to $360,000. Amounts 
incurred by the Company related to these employment agreements were $210,000 
and $90,000 for the fiscal year ended July 31, 1998, and the initial period 
ended July 31, 1997, respectively, and $180,000 and $105,000 for the six 
months ended January 31, 1999 and 1998, respectively.

NOTE H - EARNINGS PER SHARE

In accordance with Financial Accounting Standards Board Statement 128, 
EARNINGS PER SHARE, basic earnings per common share amounts are calculated 
using the average number of common shares outstanding during each period, 
retroactively adjusted to give effect to the 165 for 1 common stock split 
discussed previously in Note F, and below in Note I. As there were no 
dilutive potential common shares outstanding during the year ended July 31, 
1998, or during the initial period ended July 31, 1997, basic average shares 
outstanding and earnings per share are equal to diluted average shares 
outstanding and earnings per share, respectively, for the year ended July 31, 
1998, and for the initial period ended July 31, 1997 and for the six month 
periods ended January 31, 1999 and 1998.

NOTE I - STOCKHOLDERS' EQUITY

Subsequent to July 31, 1998, in contemplation of the stock split and employee 
incentive stock option plan discussed below, the Company amended its articles 
of incorporation to increase its authorized capital to 50,000,000 common 
shares of no par value, and 5,000,000 preferred shares with $.01 par value. 
No preferred shares have been issued to date. All references herein have been 
restated to reflect the amended amounts.

                                      F-11


HOUSTON INTERWEB DESIGN, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JULY 31, 1998 AND INITIAL PERIOD ENDED JULY 31, 1997
(INFORMATION SUBSEQUENT TO JULY 31, 1998 IS UNAUDITED)


NOTE I - STOCKHOLDERS' EQUITY (Continued)

On August 19, 1998, the Company effected a stock split on its common stock of 
165 for 1 for stockholders of record on August 19, 1998. Subsequent to this 
stock split, and prior to October 31, 1998, the Company sold an additional 
117,500 shares of its common stock to various individuals at prices ranging 
from $1 per share to $1.50 per share. As a result of the stock split and the 
subsequent sales of common stock, the total common stock of the Company 
issued and outstanding increased to 16,146,500 shares. All references to 
shares issued have been restated for the above stock split for all periods 
presented.

On August 21, 1998, the Company formed an incentive stock option plan for its 
employees under which 500,000 shares of common stock will be awarded to 
employees based upon criteria established under the plan. During February 
1999, 288,000 shares were issued to employees under this plan although no 
options have been exercised to date.

NOTE J - SUBSEQUENT EVENTS

Subsequent to January 31, 1999, the Company has continued to issue shares of 
common stock to individuals for cash at prices ranging from $1.00 per share 
to $1.50 per share, including 166,667 shares issued to two individuals for 
$250,000 cash in February 1999. In April 1999, the Company initiated a 
recision offer to the individuals.

At the end of January 1999, the Company entered into a contract with a 
corporation (reseller) to market and distribute software products 
manufactured and hosted by the Company. The amount of revenue, if any, as a 
result of the above contract cannot presently be determined.
    

                                      F-12



                                       PART II

                       INFORMATION NOT REQUIRED IN PROSPECTUS 

ITEM 24.   INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Texas law authorizes corporations to limit or eliminate the personal 
liability of directors to corporations and their stockholders for monetary 
damages for breach of directors' fiduciary duty of care.  The amended and 
restated articles of incorporation of the company limit the liability of 
directors of the company (in their capacity as directors but not in their 
capacity as officers) to the company or its stockholders to the fullest 
extent permitted by Texas law.  Specifically, directors of the company will 
not be personally liable for monetary damages for breach of a director's 
fiduciary duty as a director, except for liability (i) for any breach of the 
director's duty of loyalty to the company or its stockholders, (ii) for acts 
or omissions not in good faith that constitute a breach of duty of the 
director to the company or an act or omission which involves intentional 
misconduct or a knowing violation of law, (iii) for an act or omission for 
which the liability of a director is expressly provided by an applicable 
statute, or (iv) for any transaction from which the director received an 
improper personal benefit, whether the benefit resulted from an action taken 
within the scope of the director's office. Section 2.41 of the Texas Business 
Corporation Act relates to directors' liability for unlawful dividends and 
stock issuances.

     The inclusion of this provision in the amended and restated articles of 
incorporation may have the effect of reducing the likelihood of derivative 
litigation against directors, and may discourage or deter stockholders or 
management from bringing a lawsuit against directors for breach of their duty 
of care, even though such an action, if successful, might otherwise have 
benefitted the company and its stockholders.

     The company's amended and restated articles of incorporation provide for 
the indemnification of its executive officers and directors, and the 
advancement to them of expenses in connection with any proceedings and 
claims, to the fullest extent permitted by the Texas Business Corporation 
Act.  The amended and restated articles of incorporation include related 
provisions meant to facilitate the indemnities' receipt of such benefits.  
These provisions cover, among other things: (i) specification of the method 
of determining entitlement to indemnification and the selection of 
independent counsel that will in some cases make such determination, (ii) 
specification of certain time periods by which certain payments or 
determinations must be made and actions must be taken, and (iii) the 
establishment of certain presumptions in favor of an indemnitee. Insofar as 
indemnification for liabilities arising under the Securities Act may be 
permitted to directors, officers or persons controlling the company pursuant 
to the foregoing provisions, the company has been informed that, in the 
opinion of the SEC, such indemnification is against public policy as 
expressed in the Securities Act and is therefore unenforceable.

ITEM 25.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following table sets forth the estimated expenses to be incurred in 
connection with the distribution of the securities being registered.  The 
expenses shall be paid by the Registrant.

                                                             
               SEC Registration Fee . . . . . . . . . . . .      $   100.00
               Printing and Engraving Expenses. . . . . . .        2,000.00
               Legal Fees and Expenses. . . . . . . . . . .       40,000.00
               Accounting Fees and Expenses . . . . . . . .       35,000.00
               Miscellaneous. . . . . . . . . . . . . . . .        5,000.00
                                                                 ----------
               TOTAL. . . . . . . . . . . . . . . . . . . .      $82,100.00
                                                                 ----------
                                                                 ----------

ITEM 26.  RECENT SALES OF UNREGISTERED SECURITIES
   
     In August 1996, the company issued an aggregate of 15,279,000 shares of 
common stock to three individuals and three entities for nominal 
consideration in connection with the company's formation.  The company 
believes these transactions were exempt from registration pursuant to Section 
4(2) of the Securities Act as isolated transactions by an issuer not 
involving a pubic offering.  The company believes as these investors were 
insiders they had access to the inner workings of the company, which would 
provide them the same kind of information as would  be included in a 
registration statement.  

     From August 1998 through November 1998, the company issued an aggregate 
of 160,133 shares of common stock in consideration for an aggregate of 
$197,499.50. The Company believes that the foregoing transactions are exempt 
from registration as a limited offering pursuant to Rule 504 of Regulation D. 
    
                                       II-1


   
     In July 1998, the company issued 750,000 shares of common stock to 
PinkMonkey.com for nominal consideration and services rendered.  The company 
believes these transactions were exempt from registration pursuant to Section 
4(2) of the Securities Act as isolated transactions by an issuer not 
involving a pubic offering.  The company believes as these investors were 
insiders they had access to the inner workings of the company, which would 
provide them the same kind of information as would be included in a 
registration statement.  

     In November 1998, the company issued an aggregate of 72,500 shares of 
common stock to three individuals in consideration for services rendered.  
The company believes these transactions were exempt from registration 
pursuant to Section 4(2) of the Securities Act as isolated transactions by an 
issuer not involving a pubic offering.  The company believes as these 
investors were insiders they had access to the inner workings of the company, 
which would provide them the same kind of information as would be included in 
a registration statement.  

     In November 1998, the company issued an aggregate of 20,000 shares to 
three employees in consideration for services rendered.  The company believes 
these transactions were exempt from registration pursuant to Section 4(2) of 
the Securities Act as transactions by an issuer not involving a pubic 
offering.  The company believes as these investors were insiders they had 
access to the inner workings of the company, which would provide them the 
same kind of information as would be included in a registration statement.  

     In February 1999, the company issued 66,667 shares of company common 
stock to an accredited individual for $100,000.00.  In addition, the company 
issued 100,000 shares of company common stock to an accredited individual for 
$150,000.00.  The company believes these transactions were exempt from 
registration pursuant to Section 4(2) of the Securities Act as isolated 
transactions by an issuer not involving a pubic offering.  The company 
believes that as accredited investors these individuals were able to fend for 
themselves due to their exceptional business experience.  
    
ITEM 27.  EXHIBITS  
                                 INDEX TO EXHIBITS
   


EXHIBIT NO.         IDENTIFICATION OF EXHIBIT
- -----------         
                 
3.1(1)              Amended and Restated Articles of Incorporation

3.2(1)              Articles of Amendment to the Articles of Incorporation
 
3.3(1)              By-Laws of the company

3.4(1)              Articles of Correction to the Amended and Restated Articles
                    of Incorporation

3.5(1)              Articles of Correction to the Articles of Amendment to the
                    Articles of Incorporation

4.1(1)              Form of Specimen of common stock

5.1(3)              Legal Opinion

10.1(1)             Letter Agreement between the company and PinkMonkey.com,
                    Inc.

10.2(1)             Software License and Marketing Agreement between the company
                    and Websource Media, L.L.C.

10.3(1)             Software Reseller Agreement between the company and Harry
                    Bauge

10.4(1)             Letter Agreement between the company and Harry Bauge

10.5(1)             Agreement between the company and NetTrade Online, L.L.C.

                                       II-2


10.6(1)             Employment Agreement between the company and Harry White

10.7(1)             Employment Agreement between the company and Richard Finn

10.8(1)             Employment Agreement between the company and Lee Magness

10.9(1)             Lease Agreement

10.10(3)            Software Reseller Agreement with Eduardo F. Azcoitia, dba
                    Proses

10.11(3)            Joint Marketing Agreement with West Marketing Services
                    Corporation

10.12(3)            License and Service Agreement with Axis Technologies Corp.

23.1(3)             Consent of Mann, Frankfort, Stein and Lipp, P.C.

23.2(2)             Consent of Brewer & Pritchard, P.C.

27.1(1)             Financial Data Schedule

99.1(3)             Notice of Recission

    

(1)  Filed as an Exhibit to the company's registration statement on Form SB-2
     (File No.  67871) and herein incorporated by reference.
(2)  Contained in Exhibit 5.1.
(3)  Filed herewith.

ITEM 28.  UNDERTAKINGS

     (a)  The undersigned registrant hereby undertakes:

          (1)  To file, during any period in which offers or sales are being
               made, a post-effective amendment to this registration statement: 

               i.   To include any prospectus required by Section 10(a)(3) of 
                    the Securities Act;

               ii.  Reflect  in the prospectus any facts or events arising after
                    the effective date of which, individually or together,
                    represent a fundamental change  in the information in the
                    registration statement.  Notwithstanding the foregoing, any
                    increase or decrease in volume of securities offered (if the
                    total dollar value of securities offered would not exceed
                    that which was registered) and any deviation from the low or
                    high end of the estimated maximum offering range may be
                    reflected in the form of prospectus filed with the SEC
                    pursuant to Rule 424(b) of this chapter) if, in the
                    aggregate, the changes in volume and price represent no more
                    than a 20% change in the maximum aggregate offering price
                    set forth in the "Calculation of Registration Fee" table in
                    the effective registration statement; and 

               iii. Include any additional or changed material on the plan of
                    distribution.

          (2)  That, for the purpose of determining any liability under the
               Securities Act, each such post-effective amendment shall be
               deemed to be a new registration statement relating to the
               securities offered therein, and the offering of such securities
               at that time shall be deemed to be the initial BONA FIDE offering
               thereof.

          (3)  To remove from registration by means of a post-effective
               amendment any of the securities being registered which remain
               unsold at the termination of the offering.

          (4)  i.   That, for the purpose of determining liability under the
                    Securities Act, the information omitted from the form of
                    prospectus filed as part of this registration statement  in
                    reliance upon Rule 430A and contained in a form of
                    prospectus filed by the registrant pursuant to Rule
                    424(b)(1) or (4), or 497(h) under the Securities Act shall
                    be deemed to be part of this registration statement as of
                    the time it was declared effective.

                                       II-3


               ii.  For determining any liability under the Securities Act, each
                    post-effective amendment that contains a form of prospectus
                    shall be deemed to be a new registration statement relating
                    to the securities offered therein, and the offering of such
                    securities at that time shall be deemed to be the initial
                    BONA FIDE offering thereof.

     (b)  Insofar as indemnification for liabilities arising under the
          Securities Act may be permitted to directors, officers and controlling
          persons of the registrant pursuant to the foregoing provisions, or
          otherwise, the registrant has been advised that in the opinion of the
          SEC such indemnification is against public policy as expressed in the
          Securities Act and is, therefore, unenforceable.  In the event that a
          claim for indemnification against such liabilities (other than the
          payment by the registrant of expenses incurred or paid by a director,
          officer or controlling person of the registrant in the successful
          defense of any action, suit or proceeding) is asserted by such
          director, officer or controlling person in connection with the
          securities being registered, the registrant will, unless in the
          opinion of its counsel the matter has been settled by controlling
          precedent, submit to a court of appropriate jurisdiction the question
          whether such indemnification by it is against public policy as
          expressed  in the Securities Act and will be governed by the final
          adjudication of such issue. 

                                       II-4



   
                                      SIGNATURES

     Pursuant to the requirements of the Securities Act, the registrant 
certifies that it has reasonable grounds to believe that it meets all of the 
requirements for filing on Form SB-2 and authorized this registration 
statement to be signed on its behalf by the undersigned, thereunto duly 
authorized, in the City of Houston, State of Texas, on the 6th day of May, 
1999.  
    

                                       HOUSTON INTERWEB DESIGN, INC. 


                                   By:   /s/ Harry White                
                                       -------------------------------------
                                       HARRY L. WHITE, President and 
                                       Chief Executive Officer 

                              _________________________

   
     This registration statement has been signed by the following persons in 
the capacities and on the dates indicated:


Signature                               Title                          Date
- ---------                               -----                          ----


     /s/ Harry L. White          President, Treasurer,               May 6, 1999
- -------------------------------  Secretary and Chairman             
HARRY L. WHITE                                                      
                                                                    
                                                                    
    /s/ Richard J. Finn          Chief Technical Officer and         May 6, 1999
- -------------------------------  Director                           
RICHARD J. FINN                                                     
                                                                    
                                                                    
   /s/ Lee A. Magness            Chief Financial Officer, General    May 6, 1999
- -------------------------------  Counsel and Director               
LEE A. MAGNESS                 
    


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