Starnet Communications International Inc.
Consolidated Balance Sheets
As at October 31, 2000 and April 30, 2000
(in thousands of US dollars)

                                          (Unaudited)
                                           October 31     April 30
                                              2000          2000
----------------------------------------------------------------------

ASSETS
Current
Cash and cash equivalents                     3,937         5,984
Reserves and deposits with
 credit card processors                       3,639         3,857
Accounts receivable                           2,889         2,022
Prepaid expenses and deposits                   641           616
Current portion of long-term receivable          37           514
Other current assets                            761         1,349
----------------------------------------------------------------------
Total current assets                         11,904        14,342
----------------------------------------------------------------------
Restricted cash                               7,556         7,234
Capital assets (net)                          6,122         4,868
Long-term receivable                          1,534         1,539
----------------------------------------------------------------------
                                             27,116        27,983
----------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities      3,594         5,223
Funds held on deposit                         4,159         2,118
Deferred revenue                                133           287
Current portion of capital lease obligations    687           476
----------------------------------------------------------------------
Total current liabilities                     8,573         8,104
----------------------------------------------------------------------
Non-current portion of
 capital lease obligations                      906           503
Long-term note payable                        1,500             0
----------------------------------------------------------------------
Total liabilities                            10,979         8,607
----------------------------------------------------------------------

Shareholders' equity
Capital stock                                22,335        22,143
Subscription receivable                        (366)         (381)
Retained earnings (deficit)                  (5,484)       (2,371)
Accumulated other comprehensive loss           (348)          (15)
----------------------------------------------------------------------
Total shareholders' equity                   16,137        19,376
----------------------------------------------------------------------
                                             27,116        27,983
----------------------------------------------------------------------

Starnet Communications International Inc.
Consolidated Statements of Operations
For the Periods Ending October 31
(in thousands of US dollars except per share information)

                           (Unaudited)                 (Unaudited)
                      Three Months Ended            Six Months Ended
                            October 31                 October 31
                          2000      1999            2000       1999
----------------------------------------------------------------------

REVENUE
Sales
    Royalties and fees    4,730      3,430          8,354      5,794
    Licensing               746        912          1,151      2,163
----------------------------------------------------------------------
Total sales               5,476      4,342          9,505      7,957
Cost of sales             1,604        930          2,900      1,797
----------------------------------------------------------------------
Gross profit              3,872      3,412          6,605      6,160
----------------------------------------------------------------------

EXPENSES
Sales                       177        127            297        295
Marketing                   743        609          1,498        853
Development                 863        455          1,709        823
Operations                1,087        (66)         2,168        292
General and
 administrative           1,409      1,347          2,623      1,991
Provision for bad debts       0          0              0        250
Legal                       217        152            290        189
Depreciation and
 amortization               763        378          1,315        646
----------------------------------------------------------------------
Total operating expenses  5,259      3,002          9,900      5,339
----------------------------------------------------------------------
Income (loss)
 from operations         (1,387)       410         (3,295)       821
----------------------------------------------------------------------
Other income (expenses)      96         51            182         80
----------------------------------------------------------------------
Income (loss) from
 continuing operations
 before income taxes     (1,291)       461         (3,113)       901
----------------------------------------------------------------------
Income tax
 expense (recovery)
    Current                   0         53              0         53
    Deferred                  0          0              0          0
----------------------------------------------------------------------
Income taxes                  0         53              0         53
----------------------------------------------------------------------
Income (loss) from
 continuing operations   (1,291)       408         (3,113)       848

Income (loss) from
 discontinued
 operations of the
 on-line interactive
 media division
 (less applicable
 income taxes)                0        (67)             0        106
----------------------------------------------------------------------
Net income (loss)
 for the period          (1,291)       341         (3,113)       954

Retained earnings
 (deficit), beginning
 of period               (4,193)     1,497         (2,371)       884
----------------------------------------------------------------------
Retained earnings
 (deficit), end of
 period                  (5,484)     1,838         (5,484)     1,838
----------------------------------------------------------------------

Starnet Communications International Inc.
Consolidated Statements of Operations
For the Periods Ending October 31
(in thousands of US dollars except per share information)

                            (Unaudited)              (Unaudited)
                       Three Months Ended          Six Months Ended
                            October 31                October 31
                           2000      1999           2000       1999
----------------------------------------------------------------------

Basic earnings (loss)
 per share from
 continuing operations   $(0.04)     $0.01         $(0.10)     $0.03
Basic earnings
 (loss) per share        $(0.04)     $0.01         $(0.10)     $0.03
Weighted average number
 of common shares
 Outstanding         32,176,665 30,483,604     32,141,634 29,054,349

Diluted earnings per
 share from
 continuing operations      n/a      $0.01            n/a      $0.03
Diluted earnings per share  n/a      $0.01            n/a      $0.03
Weighted average number
 of common shares
 outstanding for
 diluted earnings
 per share                  n/a 33,259,232            n/a 33,174,185

Cash flows from
 operating activities
Net income (loss)        (1,291)       341         (3,113)       954
Adjustments to reconcile
 net income to net cash
 provided by operating
 activities:
    Depreciation            763        384          1,315        646
    Amortization of
     deferred website costs   0         70              0        105
    Amortization of
     software development
     costs                    0         69              0        138
Changes in current
 assets and liabilities:
    Decrease (increase)
     in reserves and
     deposits with credit
     card processors        433       (439)           218       (493)
    Increase in
     accounts receivable   (720)    (1,861)          (852)    (3,968)
    Decrease (increase)
     in prepaid expenses
     and deposits             3       (168)           (25)      (339)
    Decrease (increase)
     in other assets        282          8            588       (727)
    Increase (decrease)
     in accounts payable
     and accrued
     liabilities           (738)     2,266         (1,629)     2,886
    Increase in income
     taxes payable            0         14              0         58
    Increase (decrease)
     in funds held
     on deposit           2,268      1,701          2,041      2,137
    Decrease in
     deferred revenue      (239)      (128)          (154)      (134)
----------------------------------------------------------------------
Net cash provided by
 (used in) operating
 activities                 761      2,257         (1,611)     1,263
----------------------------------------------------------------------

Cash flows from
 investing activities
Purchase of
 capital assets            (590)    (1,411)        (1,771)    (1,939)
Transfer to
 restricted cash           (280)    (6,856)          (322)    (6,856)
----------------------------------------------------------------------
Net cash provided by
 (used in) investing
 activities                (870)    (8,267)        (2,093)    (8,795)
----------------------------------------------------------------------

Starnet Communications International Inc.
Consolidated Statements of Operations
For the Periods Ending October 31
(in thousands of US dollars except per share information)

                            (Unaudited)              (Unaudited)
                        Three Months Ended         Six Months Ended
                            October 31                October 31
                           2000     1999           2000       1999
----------------------------------------------------------------------

Cash flows from
 financing activities
Payments received on
 long-term receivable        12          0            482          0
Proceeds from loan        1,000          0          1,500          0
Proceeds from
 issuance of shares         130      3,133            192     12,027
Principal repayments
 under capital
 lease obligations         (152)       (38)          (300)      (189)
----------------------------------------------------------------------
Net cash provided
 by financing activities    990      3,095          1,874     11,838
----------------------------------------------------------------------
Effect of exchange
 rate changes on cash      (179)      (142)          (217)       (79)
----------------------------------------------------------------------

Net increase (decrease)
 in cash during
 the period                 702     (3,057)        (2,047)     4,227
Cash, beginning
 of period                3,235     13,150          5,984      5,866
----------------------------------------------------------------------
Cash, end of period       3,937     10,093          3,937     10,093
----------------------------------------------------------------------

Other non-cash transactions
Leased assets acquired      472        282            959        282

Supplemental cash
 flow information
Interest paid                13         10             30         10
Income tax paid               0          0              0         29