Youthline USA Inc · SB-2 · On 10/13/00

Filed On 10/13/00 3:01pm ET   ·   SEC File 333-47906   ·   Accession Number 1019056-0-544

Registration of Securities by a Small-Business Issuer   ·   Form SB-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2        Registration of Securities by a Small-Business        89    299K 
                          Issuer                                                 
 2: EX-23       Consent of Experts or Counsel                          1      3K 
 3: EX-27       Financial Data Schedule                                1      4K 

SB-2   ·   Registration of Securities by a Small-Business Issuer
Document Table of Contents

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As Filed with the Securities and Exchange Commission on October 13, 2000,       
                                                   Registration No. 333-________

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 -------------------------------------
 FORM SB-2
REGISTRATION STATEMENT
 UNDER THE
SECURITIES ACT OF 1933

YouthlineUSA, INC.
------------------------------------------------------
(Exact name of Registrant as Specified in Its Charter)

      Delaware                         2700                 22-3674998
------------------------------- ---------------------------- ------------------ 
(State or other jurisdiction of (Primary Standard Industrial  (I.R.S. Employer  
 incorporation or organization)     Classification Code)     Identification No.)

 Youthline USA, Inc.
4581 US9
Howell, New Jersey 07731
(732) 886-0833
------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

 Saki Dodelson
 President
 Youthline USA, Inc.
4581 Us9
Howell, New Jersey 07731
(732) 886-0833
--------------------------------------------------------
(Name, address, including zip code, and telephone number
 including area code, of agents for service)

------------------------------------
Copies to:

Stuart Neuhauser, Esq.
 Berlack, Israels & Liberman LLP
120 West 45th Street
New York, New York 10036
(212) 704-0100

     Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.        

  If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the         
Securities Act of 1933, check the following box. [X]                            

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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(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 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. [ ]                                        
                                                              Continued overleaf

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 CALCULATION OF REGISTRATION FEE

--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

==========================================================================================================
                                                  Proposed Maximum    Proposed Maximum                    
    Title of Each Class of       Amount To Be    Offering Price Per       Aggregate          Amount Of    
  Securities To Be Registered     Registered        Security (1)       Offering Price    Registration Fee 
----------------------------------------------------------------------------------------------------------
                                                                                                          
 Common Stock(2)                  14,760,000          $ .30              $4,428,000           $1,168.99   
----------------------------------------------------------------------------------------------------------

 Common Stock(3)                     550,000          $3.00              $1,650,000           $  435.60   
----------------------------------------------------------------------------------------------------------

 Common Stock(3)                   1,390,000          $4.00              $5,560,000           $1,467.84   
----------------------------------------------------------------------------------------------------------

 Common Stock(3)                     950,000          $5.00              $4,750,000           $1,254.00   
----------------------------------------------------------------------------------------------------------

 Common Stock(4)                  40,459,768          $ .2175            $8,800,000           $2,323.20   
----------------------------------------------------------------------------------------------------------
                   Total                                                                      $6,649.63   
==========================================================================================================

(1)      Estimated solely for purposes of calculating registration fee pursuant 
         to Rule 457(c) under the Securities Act of 1933, as amended (the "Act")
       based upon the average of the high and low sales prices of the Common
        Stock on October 10, 2000, as reported on the NASD OTC Bulletin Board.

(2)      Common stock outstanding held by selling securityholders.              

(3)      These shares of common stock are not outstanding and are issuable upon 
   exercise of warrants to purchase common stock (that are not being
      registered hereunder) held by selling securityholders. In accordance
         with Rule 457(g) of the Act, the offering price is based on the highest
         of the following: (a) the price at which such warrants may be exercised
       or (b) the price of the common stock as determined in accordance with
Rule 457(c) under the Act. See Footnote 1.                    
(4)      Common stock issuable upon conversion of $4,000,000 in principal amount
    of 10% Convertible Notes. For purposes of estimating the number of
common stock to be included in this registration statement, we
        calculated 200% of the aggregate number of shares of common stock into
       which 110% of the principal amount of such notes would be convertible
        in full at $.2175 per share, which was the conversion price on October
11, 2000.                                                     

------------------------------- 

   Pursuant to Rule 416 of the Act, this registration statement also
covers such indeterminate additional shares of common stock as may become       
issuable as a result of stock splits, stock dividends or other similar events.  

------------------------------- 

       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.                                                                  

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The information in this prospectus is not complete and may be changed.  These   
securities may not be sold until the registration statement filed with the      
securities and exchange commission is effective.  This prospectus is not an     
offer to sell these securities and it is not soliciting an offer to buy these   
securities in any state where the offer or sale is not permitted.               

PROSPECTUS                         SUBJECT TO COMPLETION; DATED OCTOBER 13, 2000

 58,109,768 SHARES OF COMMON STOCK

OF

YouthlineUSA, INC.

         We are registering up to 58,109,768 shares of our common stock for sale
by certain shareholders of our company identified in this prospectus. These     
shareholders are referred to throughout this prospectus as "selling             
securityholders."                                                               

         These individuals who wish to sell their shares of our common stock may
offer and sell their shares on a continuous or delayed basis in the future.     
These sales may be conducted in the open market or in privately negotiated      
transactions and at market prices, fixed prices or negotiated prices. We will   
not receive any of the proceeds from the sales of shares by the selling         
securityholders but we will receive funds from the exercise of their warrants.  

       Our common stock is traded on the OTC Electronic Bulletin Board under
the symbol "YLNE". On October 10, 2000, the closing sales price for the common  
stock on the OTC Electronic Bulletin Board was $.30 per share.                  

     Our principal executive offices are located at 4581 US9, Howell, NJ
07731. Our telephone number is (732) 886-0833.                                  

   Our common stock being offered by this prospectus involves a high
degree of risk. You should read the "Risk Factors" section beginning on page 8  
before you decide to purchase any common stock.                                 

------------------------------------

         Neither the Securities and Exchange Commission nor any state commission
has approved or disapproved of these securities or passed upon the adequacy or  
accuracy of this prospectus. Nor have they made, nor will they make, any        
determination as to whether anyone should buy these securities. Any             
representation to the contrary is a criminal offense.                           

 The date of this Prospectus is _________ __, 2000

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 TABLE OF CONTENTS

Prospectus summary...........................................................3  
Selected financial data......................................................6  
Risk factors.................................................................7  
Forward-looking statements..................................................14  
Use of proceeds.............................................................14  
Selling securityholders.....................................................15  
Plan of distribution........................................................18  
Directors, Executive Officers, Promoters and Control Persons................20  
Security ownership of certain beneficial owners and management..............24  
Description of securities...................................................25  
Disclosure of commission position on indemnification for securities             
act liabilities...........................................................30
Our business................................................................31  
Management's discussion and analysis of financial condition and results         
of operations.............................................................44
Certain relationships and related transactions..............................51  
Market for common equity and related stockholders matters...................53  
Executive Compensation......................................................54  
Legal matters...............................................................55  
Experts.....................................................................55  
Available Information.......................................................55  

You should rely only on the information contained in this document. We have not 
authorized anyone to provide you with information that is different. This       
document may only be used where it is legal to sell these securities. The       
information in this document may only be accurate on the date of this document. 

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PROSPECTUS SUMMARY

         This summary highlights certain information contained elsewhere in this
prospectus. You should read the following summary together with the more        
detailed information regarding YouthlineUSA and our financial statements and the
related notes appearing elsewhere in this prospectus.                           

 OUR COMPANY

      Youthline USA is an industry leader in integration of technology and
curriculum, together with the news, into the classroom. Our mission is to       
promote reading excellence, combat the digital divide, and offer                
school-to-career training through our award-winning weekly newspaper, monthly   
magazine, and daily Web site. We have created a niche in the youth and          
educational markets by being the only company to offer this total integration of
news, technology, and curriculum basics directly into the classroom. At the same
time, we are forging strong relationships with corporate America by providing   
them with an effective vehicle for reaching today's youth through advertising   
and sponsorships.                                                               

Our suite of products include:                                

o    Youthline-usa.com, a daily subscription Web site used in schools and homes 
throughout the country. News articles on the Web site are linked to   
  curriculum-based interactive activities, offering educators a customized
   reading curriculum together with technology training. Full assessment and
accountability allow tracking of student performance.                 

o    Youthline USA newspaper, a weekly national newspaper with regional inserts 
with 640,000 subscribers throughout the country. The newspaper comes  
together with lesson plans, giving educators an excellent resource for
teaching current events and other subjects. It also provides a reading
curriculum for schools that are not yet using the Internet in their   
classrooms.                                                           

o    Youthline USA Fun and Feature magazine, a monthly magazine that offers     
   in-depth coverage of complex topics. Children enjoy the colorful graphics
     and exciting features, while the sturdy format is an attractive advertising
vehicle for corporate sponsors.                                       

o    The three products combine to offer schools a solution to the demands of   
    integrating today's technology while maintaining the standards of the core
     reading curriculum. Schools lack the time, resources, and training to fully
manage both challenges successfully. Youthline USA provides a total   
   solution, whereby today's technology is already fully integrated with the
reading curriculum and is further supplemented by print publications. 

BUSINESS STRATEGY                                                               

Key elements of our strategy are to:                          

o    Develop distinctive products. Our mission is to develop niche products in  
    the multi-media educational market, particularly news and curriculum-based
products. Our distinctive suite of products offers educators          
curriculum-based resources that address reading, technology, and      
  school-to-career training--three of the most the important issues facing
schools today.                                                        

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o    Leverage strategic corporate partnerships. Our strategy is to develop      
strategic alliances with large corporations through advertising and   
     corporate sponsorships to take advantage of their existing sales, marketing
    and distribution networks. Our strategy is to become the market leader for
  enhanced Internet and multi-media curriculum-based educational products.

o    Create barriers to entry through first mover positioning and proprietary   
     products. We are moving rapidly to establish the Youthline USA product line
     as the multi-media educational products of choice for schools. In addition,
  we hope to create sufficient barriers to entry for other new entrants by
leveraging the distribution channels of its partners.                 

o    Capitalize on specialized expertise. Our executive officers and employees  
have extensive experience in business, education, finance, publishing,
     marketing, and sales. Within three years, the team has successfully managed
to grow the business from a single youth newspaper to a broad range of
     print and online products and services for children, parents, and teachers.

STRATEGIC ALLIANCES                                                             

         Youthline USA has established several alliances with major corporations
to promote its products through their existing sales networks. Presently, our   
partners include Sun Microsystems, VillageNet, Disney, the Academy of Natural   
Sciences, and Notesys, among others. We presently are negotiating possible      
partnerships with leading suppliers of educational products and services, and   
intend to leverage these and future partnerships into an extensive distribution 
network for the Youthline USA product line.                                     

HISTORICAL INFORMATION                                                          

       Youthline USA, Inc. was incorporated on July 27, 1999 pursuant to the
laws of the State of Delaware as the successor to Ult-I-Med Health Centers,     
Inc., a Utah corporation ("Ult-I-Med"), which was incorporated in 1983 under the
laws of the State of Utah (originally under the name Picadilly Technology,      
Inc.). We were organized to effectuate a reincorporation of Ult-I-Med with and  
into Youthline USA on August 16, 1999.                                          

Ulti-I-Med was originally organized to engage in the mining of
metalliferous chemicals. In 1988, Ulti-I-Med ceased such activities and began   
engaging in the business of owning and operating camping and recreation         
facilities. In 1991, Ulti-I-Med ceased such activities and began engaging in the
business of owning and operating supervised primary care, health and            
rehabilitation centers. In January 1996, Ulti-I-Med filed a Chapter 11          
bankruptcy petition. Ult-I-Med liquidated all of its assets and its plan of     
reorganization was filed with the court in February 1998. All of Ult-I-Med debts
were paid, and the court entered a final decree in September 1999.              

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         In August 1999, Ult-I-Med acquired all of the outstanding capital stock
of S&S Plus, Inc., a wholly-owned subsidiary of Youthline USA which operates the
publication Youthline USA, in exchange for the issuance of 5,500,000 shares of  
its common stock, representing a majority of the total issued and outstanding   
capital stock of Youthline USA. On such date, the directors and officers        
resigned and were replaced with some of the current officers and directors.     

  Our principal place of business is located at 4581 US Highway 9,
Howell, NJ, 07731. Our general phone number is (732) 886-0833. Our Web site     
address is www.youthline-usa.com.                                               

THE OFFERING

Shares outstanding before offering (1)....................  20,739,350 shares of
                                                     common stock.

Shares outstanding offered by selling securityholders.....  14,760,000 shares of
                                                     common stock.

Shares underlying warrants offered by selling               2,890,000 shares of 
securityholders...........................................  common stock.       

Shares underlying convertible notes offered by selling      40,459,768 shares of
securityholders (2).......................................  common stock        

Plan of distribution......................................  The offering of our 
                                                        shares of common
                                                           stock is being made
                                                          by shareholders of
                                                            our company who wish
                                                     to sell their
                                                            shares. Sales of our
                                                           common stock may be
                                                           made by the selling
                                                          securityholders in
                                                          the open market or
                                                    in privately
                                                  negotiated
                                                           transactions and at
                                                            market prices, fixed
                                                            prices or negotiated
                                               prices.

Use of proceeds...........................................  We will not receive 
                                                           any of the proceeds
                                                            from the sale of the
                                                           shares owned by the
                                               selling
                                                        securityholders.
                                                        However, we will
                                                           receive $11,960,000
                                                     if all of the
                                                    warrants are
                                                       exercised. Such
                                                          funds will be used
                                                           for working capital
                                                   and general
                                                           corporate purposes.

--------------------                                                            
(1)  As of September 30, 2000.                                                  
(2)  Represents 200% of the aggregate number of shares of common stock into     
  which 110% of the principal amount of our 10% convertible notes would be
    convertible in full at $.2175 per share, which was the conversion price on
October 11, 2000.                                                     

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 SELECTED FINANCIAL DATA

         The following selected financial data is qualified by reference to, and
should be read in conjunction with, "Management's Discussion and Analysis of    
Financial Condition and Results of Operations" included elsewhere in this       
Prospectus. The financial information set forth below is audited with respect to
the annual period ended December 31, 1999 and unaudited for the six month period
ended June 30, 2000, and has been prepared by our management.                   

                                         Year Ended       Six Months Ended
                                         ---------------------------------------
                                     December 31,         June 30,
                                      1999                2000
                                      ----                ----

STATEMENT OF OPERATIONS DATA:                (audited)          (unaudited)     
Revenues .............................                                          
                                      $  168,967          $  567,035
Costs of goods sold ..................         321,320           1,336,643      
Operating expenses....................       3,271,695           5,540,722      
Loss from operations..................      (3,424,048)         (6,310,330)     
Interest expense, net.................       1,362,952           2,947,047      
Net loss..............................      (4,787,000)         (9,257,377)     

                                        As of              As of
                                      December 31, 2000    June 30, 2000
                                      ----------------------------------------

                    Actual
                    ------

SELECTED BALANCE SHEET DATA:              (audited)        (unaudited)  

Cash and cash equivalents.........         572,720            164,760   

Working capital...................              --                 --   

Total assets......................         988,082          1,316,573   

Total liabilities.................       2,030,118          4,126,580   

Stockholders' equity (deficit)....      (1,042,036)        (2,810,007)  

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RISK FACTORS

        You should carefully consider the following risk factors and all other
information contained in this prospectus before investing in our common stock.  
Investing in our common stock involves a high degree of risk. Any of the        
following risks could adversely affect our business, financial condition and    
results of operations and could result in a complete loss of your investment.   
The risks and uncertainties described below are not the only ones we may face.  

We have a recent history of losses.                                             

       We have incurred net losses of $323,835 and $4,787,000 ($3,403,768 of
which was stock compensation expenses) for the years ended December 31, 1998 and
1999, respectively and $9,257,377 ($1,550,000 of which was stock compensation   
expenses) for the six month period ended June 30, 2000. We expect that losses   
will increase and continue until such time, if ever, as we can generate         
sufficient revenue through website and newspaper subscribers and/or obtain      
sufficient advertisements and sponsorships. We will need to generate a          
substantial increase in revenues to become profitable. In addition, we had an   
accumulated deficit of $14,544,615 at June 30, 2000.                            

Because we have been in business for a short period of time, there is limited   
information upon which investors can evaluate our business; we are in our early 
stages of development.                                                          

   We initiated deployment of our newspaper product in 1997, and our
Web-based product in January 2000. Because our products are new, we should be   
evaluated as an early-stage company. Consequently, we have a very limited       
operating history upon which investors may base an evaluation of our business   
and determine our prospects for achieving our intended business objectives. We  
are prone to all of the risks inherent to the establishment of any new business 
venture, including unforeseen changes in our business plan. Investors should    
consider the likelihood of our future success to be highly speculative in light 
of our limited operating history, as well as the limited resources, problems,   
expenses, risks and complications frequently encountered by similarly situated  
companies in the early stages of marketing, particularly companies in new and   
rapidly evolving markets, such as the Internet. To address these risks, we must,
among other things, maintain and increase its customer base, implement and      
successfully execute our business and marketing strategies, continue to develop 
and upgrade our information technology, continually update and improve our      
product offerings and features, provide superior customer service, respond to   
industry and competitive developments, and attract, train, integrate, retain and
motivate qualified personnel. We may not be successful in addressing these      
risks. If we are unable to do so, our business, prospects, financial condition  
and results of operations would be materially and adversely affected.           

Our additional financing requirements could result in dilution to existing      
stockholders.                                                                   

       If additional financing is required, it could be obtained through one
or more transactions which effectively dilute the ownership interests of holders
of our common stock. Further, there can be no assurance that we will be able to 
secure such additional financing. We have the authority to issue additional     
shares of common stock, as well as additional classes or series of ownership    
interests or debt obligations of Youthline USA which may be convertible into any
class or series of ownership interests in Youthline USA. We are authorized to   
issue 50,000,000 shares of Common Stock and 5,000,000 shares of preferred stock.
Such securities may be issued without the approval or other consent of the      
holders of our common stock. In light of existing derivative securities         
currently outstanding, we would be obligated to take steps to have authority to 
issue additional shares of common stock.                                        

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        We believe that cash on hand and anticipated revenues from operations,
will be sufficient to meet our presently anticipated working capital and capital
expenditure requirements for at least the next six to twelve months. Our belief 
is based on our operating plan which in turn is based on assumptions, which may 
prove to be incorrect. As a result, our financial resources may not be          
sufficient to satisfy our capital requirements for this period. In addition, we 
may need to raise significant additional funds prior to the completion of this  
period in order to support our growth, develop new or enhanced products, respond
to competitive pressures, acquire or invest in complementary or competitive     
businesses or technologies or take advantage of unanticipated opportunities. If 
our financial resources are insufficient and, in any case, after this six to    
twelve month period, we will require additional financing in order to implement 
our growth strategy. We cannot be certain that this additional financing, if    
needed, will be available when needed, on acceptable terms, or at all.          
Furthermore, any additional debt financing, if available, may involve           
restrictive covenants, which may limit our operating flexibility with respect to
business matters. If adequate funds are not available when needed on acceptable 
terms, we may be unable to develop or enhance our products, take advantage of   
future opportunities, repay debt obligations as they become due or respond to   
competitive pressures, any of which would have a material adverse effect on our 
business, prospects, financial condition and results of operations.             

We depend upon our senior management, and their loss or unavailability could put
us at a competitive disadvantage.                                               

         Our success depends largely on the skills, experience and reputation of
certain key management and technical personnel. The loss or unavailability of   
any of these individuals for any significant period of time could have a        
material adverse effect on our business, prospects, financial condition and     
results of operations. There can be no assurance that we will be able to replace
these key individuals in the event their services become unavailable. See       
"Management."                                                                   

Others may develop or purchase comparable or superior technology.               

         Our management believes that our Internet-based technology reflects the
current state of the art for educational and multi-media Internet offerings.    
However, others could develop, and may have developed, comparable or superior   
technology that we are not aware of. We cannot guarantee that future innovations
in curriculum-based Internet Web site development will not eliminate any        
technological advantage we may currently enjoy over our competition or render   
our approach obsolete. We expect that we will be required to maintain a         
continuous program of technological innovation in order to take advantage of    
general technological advances and to remain competitive.                       

Others may develop or purchase comparable or superior publications.             

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       Our management believes that Youthline USA's publications and content
occupy a unique and important niche in the youth and educational markets.       
However, existing publishing firms, especially those with much greater resources
than us, could develop, or may have developed, comparable publications that we  
are is not aware of. We cannot guarantee that future publications for children  
will not eliminate any advantage we may currently enjoy over its competition.   

We depend on the continued growth of Internet usage and infrastructure for our  
business.                                                                       

         Our market is new and rapidly evolving. Our business would be adversely
affected if usage of the Internet does not continue to grow. Internet usage may 
be inhibited for a number of reasons, such as:                                  

o    inadequate network infrastructure;                                         

o    security concerns; and                                                     

o    inconsistent quality of service.                                           

         If Internet usage grows, the Internet infrastructure may not be able to
support the demands placed on it by this growth or its performance and          
reliability may decline. In addition, Web sites have experienced interruptions  
in their service as a result of outages and other delays occurring throughout   
the Internet network infrastructure. If use of the Internet does not continue to
grow, or if the Internet infrastructure does not effectively support growth that
may occur, our business, results of operations and financial condition would be 
materially and adversely affected.                                              

We must keep pace with rapidly changing technologies to be successful.          

       The Internet and educational multi-media markets are characterized by
rapidly changing technologies, evolving industry standards, frequent new product
and service introductions and changing customer demands. The introduction of new
products and services embodying new technologies and the emergence of new       
industry standards and practices can render existing products and services      
obsolete and unmarketable or require unanticipated investments in research and  
development.                                                                    

   Our future success will depend on our ability to adapt to rapidly
changing technologies, to enhance existing solutions and to develop and         
introduce a variety of new solutions to address the changing demands of our     
customers. In addition, increased availability of Internet access that delivers 
greater amounts of data faster is expected to enable the development of new     
products and services that take advantage of this expansion in delivery         
capability. Our failure to adapt successfully to these changes could adversely  
affect our business, results of operations and financial condition. We may also 
experience difficulties that could delay or prevent the successful design,      
development, introduction or marketing of our products or services. In addition,
any new products or services that we develop must meet the requirements of our  
current and prospective customers and must achieve significant market           
acceptance. Material delays in introducing new products and services may cause  
customers to forego purchases of our products and services and purchase those of
its competitors.                                                                

We may not be able to compete effectively in the industries in which we conduct 
operations.                                                                     

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The educational multi-media industry is a fast moving, highly 
innovative industry. We need to constantly develop leading edge products and    
services and market them effectively in order to retain a competitive edge. We  
expect that competition will intensify and increase in the future. As a result, 
our potential competitors may be better positioned to address the changes to the
industry or may react more favorably to these changes, which could have a       
material adverse effect on our business, prospects, financial condition and     
results of operations. Although at the present time, we believe our products are
competitive, potential competitors could, at any time, elect to focus additional
resources in our target markets, which could materially adversely affect our    
business, prospects, financial condition and results of operations. Many of our 
potential competitors have longer operating histories, larger customer bases,   
longer relationships with clients and significantly greater financial,          
technical, marketing and public relations resources than we do. We must rely on 
the skill of our personnel to implement our plans. The emergence of competition 
with more resources could have a material adverse effect on our business,       
prospects, financial condition and results of operations.                       

The limited prior public market and trading market may cause possible volatility
in our stock price.                                                             

    There has only been a limited public market for our securities and
there can be no assurance that an active trading market in our securities will  
be maintained. In addition, the stock market in recent years has experienced    
extreme price and volume fluctuations that have particularly affected the market
prices of many smaller companies. The trading price of our common stock is      
expected to be subject to significant fluctuations in response to variations in 
quarterly operating results, changes in analysts' earnings estimates,           
announcements of innovations by us or our competitors, general conditions in the
industry in which we operate and other factors. These fluctuation, as well as   
general economic and market conditions, may have a material or adverse effect on
the market price of our common stock.                                           

Penny stock regulations may impose certain restrictions on marketability of our 
securities.                                                                     

       The Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define a "penny stock" to be any equity security    
that has a market price (as defined) of less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions. As a result, 
our common stock is subject to rules that impose additional sales practice      
requirements on broker-dealers who sell such securities to persons other than   
established customers and accredited investors (generally those with assets in  
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together  
with their spouse). For transactions covered by these rules, the broker-dealer  
must make a special suitability determination for the purchase of such          
securities and have received the purchaser's written consent to the transaction 
prior to the purchase. Additionally, for any transaction involving a penny      
stock, unless exempt, the rules require the delivery, prior to the transaction, 
of a risk disclosure document mandated by the Commission relating to the penny  
stock market. The broker-dealer must also disclose the commission payable to    
both the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market maker, the          
broker-dealer must disclose this fact and the broker-dealer's presumed control  
over the market. Finally, monthly statements must be sent disclosing recent     
price information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the "penny stock" rules may       
restrict the ability of broker-dealers to sell our securities and may affect the
ability of investors to sell our securities in the secondary market and the     
price at which such purchasers can sell any such securities.                    

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Shareholders should be aware that, according to the Securities and Exchange     
Commission, the market for penny stocks has suffered in recent years from       
patterns of fraud and abuse. Such patterns include:                             

   o   control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer;             

  o   manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases;                

o   "boiler room" practices involving high pressure sales tactics and 
unrealistic price projections by inexperienced sales persons; 

    o   excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and                                           

o   the wholesale dumping of the same securities by promoters and     
       broker-dealers after prices have been manipulated to a desired level,
    along with the inevitable collapse of those prices with consequent
investor losses.                                              

Our management is aware of the abuses that have occurred historically in the    
penny stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,      
management will strive within the confines of practical limitations to prevent  
the described patterns from being established with respect to our common stock. 

Anti-takeover provisions may adversely affect the value of our outstanding      
securities.                                                                     

      Pursuant to our Certificate of Incorporation, our Board of Directors
may issue up to 5,000,000 shares of preferred stock in the future with such     
preferences, limitations and relative rights as the Board may determine without 
stockholder approval. The rights of the holders of common stock will be subject 
to, and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future. The issuance of preferred stock, while  
providing flexibility in connection with possible acquisitions and other        
corporate purposes, could have the effect of delaying or preventing a change in 
control of Youthline USA without further action by the stockholders. We have no 
present plans to issue any shares of preferred stock. In addition, we are       
subject to the anti-takeover provisions of Section 203 of the Delaware General  
Corporation Law, which will prohibit us from engaging in a "business            
combination" with an "interested stockholder" for a period of three years after 
the date of the transaction in which the persons became an interested           
stockholder, unless the business combination is approved in a prescribed manner.
The application of Section 203 also could have the effect of delaying or        
preventing a change of control of our company.                                  

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Additional authorized shares of common stock and preferred stock available for  
issuance may adversely affect the market.                                       

         We are authorized to issue 50,000,000 shares of our common stock. As of
September 30, 2000 there were 20,739,350 shares of our common stock issued and  
outstanding. However, the total number of shares of common stock issued and     
outstanding does not include the exercise of up to 25,000 shares of common stock
issuable upon exercise of warrants at $1.00 per share, 25,000 shares of common  
stock issuable upon exercise of warrants at $2.00 per share, 665,000 shares of  
common stock issuable upon exercise of warrants at $3.00 per share, 1,390,000   
shares of common stock issuable upon exercise of warrants at $4.00 per share,   
950,000 shares of common stock issuable upon exercise of warrants at $5.00 per  
share, 250,000 shares of common stock issuable upon exercise of warrants at     
$7.00 per share, 250,000 shares of common stock issuable upon exercise of       
warrants at $9.00 per share, 5,875,000 shares of common stock issuable upon     
exercise of warrants at $.10 per share, 750,000 shares of common stock issuable 
upon exercise of warrants at $.05 per share, 100,000 shares of common stock     
issuable upon exercise of warrants at $14.63 per share and 300,000 shares of    
common stock issuable upon exercise of warrants at $12.00 per share. In         
addition, there are approximately 18,391,000 shares of common stock issuable    
upon conversion of outstanding convertible notes (subject to certain            
limitations, See "Description of Securities"), approximately 6,000,000 shares of
common stock issuable (subject to certain limitations, See "Description of      
Securities") upon conversion of convertible notes that may be purchased by      
certain selling securityholders and 15,600 shares of common stock issuable upon 
exercise of outstanding options that have been granted pursuant to our Incentive
Stock Option Plan. As a result, any issuance of additional shares of common     
stock may cause our current shareholders to suffer significant dilution which   
may adversely affect the market. In light of the above described existing       
derivative securities, we would be obligated to take steps to have authority to 
issue additional shares of common stock.                                        

         In addition to the above-referenced shares of common stock which may be
issued without shareholder approval, we have 5,000,000 shares of authorized     
preferred stock, the terms of which may be fixed by our Board of Directors. We  
presently have no issued and outstanding shares of preferred stock and while we 
have no present plans to issue any shares of preferred stock, our Board of      
Directors has the authority, without shareholder approval, to create and issue  
one or more series of such preferred stock and to determine the voting, dividend
and other rights of holders of such preferred stock. The issuance of any of such
series of preferred stock could have an adverse effect on the holders of common 
stock.                                                                          

The exercise of outstanding options and warrants and the conversion of          
convertible notes may adversely affect the market of our common stock.          

         The exercise of our outstanding options and warrants and the conversion
of our notes will dilute the percentage ownership of our stockholders, and any  
sales in the public market of shares of common stock underlying such securities 
may adversely affect prevailing market prices for the common stock. Moreover,   
the terms upon which we will be able to obtain additional equity capital may be 
adversely affected since the holders of such outstanding securities can be      
expected to exercise their respective rights therein at a time when we would, in
all likelihood, be able to obtain any needed capital on terms more favorable to 
us than those provided in such securities.                                      

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Shares eligible for future sale may adversely affect the market.                

        As of September 30, 2000, we had 20,739,350 shares of our Common Stock
issued and outstanding, 16,334,150 of which are "restricted securities". Rule   
144 provides, in essence, that a person holding "restricted securities" for a   
period of one year may sell only an amount every three months equal to the      
greater of (a) one percent of a company's issued and outstanding shares, or (b) 
the average weekly volume of sales during the four calendar weeks preceding the 
sale. The amount of "restricted securities" which a person who is not an        
affiliate of our company sell is not so limited, since non-affiliates may sell  
without volume limitation their shares held for two years if there is adequate  
current public information available concerning our company. In such an event,  
"restricted securities" would be eligible for sale to the public at an earlier  
date. The sale in the public market of such shares of common stock may adversely
affect prevailing market prices of our common stock.                            

Limitation on director liability.                                               

       As permitted by Delaware law, our Certificate of Incorporation limits
the liability of our directors for monetary damages for breach of a director's  
fiduciary duty except for liability in certain instances. As a result of our    
charter provision and Delaware law, stockholders may have limited rights to     
recover against directors for breach of fiduciary duty.                         

We have no history of paying dividends on our common stock.                     

      We have never paid any cash dividends on our common stock and do not
anticipate paying any cash dividends on our common stock in the foreseeable     
future. We plan to retain any future earnings to finance growth. If we determine
that we will pay dividends to the holders of our common stock, there is no      
assurance or guarantee that such dividends will be paid on a timely basis. In   
addition, pursuant to the terms of our outstanding convertible notes, we are    
prohibited from paying any dividends until such notes are repaid in full.       

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FORWARD-LOOKING STATEMENTS

       You should not rely on forward-looking statements in this prospectus.
This prospectus contains forward-looking statements that involve risks and      
uncertainties. We use words such as "anticipates", "believes", "plans",         
"expects", "future", "intends" and similar expressions to identify these        
forward-looking statements. Prospective investors should not place undue        
reliance on these forward-looking statements, which apply only as of the date of
this prospectus. Our actual results could differ materially from those          
anticipated in these forward-looking statements for many reasons, including the 
risks faced by our company described in "Risk factors" and elsewhere in this    
prospectus.                                                                     

 USE OF PROCEEDS

     We will not receive any of the proceeds from the sale of the shares
owned by the selling securityholders. However, we will receive $11,960,000 if   
all of the warrants are exercised. We intend to use all of such proceeds for    
working capital and general corporate purposes. Pending use of the proceeds,    
they will be invested in short-term, interest bearing securities or money market
funds.                                                                          

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 SELLING SECURITYHOLDERS

        The following table sets forth the shareholders who are offering their
shares for sale under this prospectus, the amount of shares owned by such       
shareholder prior to this offering, the amount to be offered by such shareholder
and the amount to be owned by such shareholders following completion of the     
offering. The prior-to offering figures are as of September 30, 2000. All share 
numbers are based on information that these shareholders supplied to us. This   
table assumes that each shareholder will sell all of its shares available for   
sale during the effectiveness of the registration statement that includes this  
prospectus. Shareholders are not required to sell their shares.                 

     Beneficial ownership is determined in accordance with SEC rules and
includes voting or investment power with respect to the securities. In the case 
of selling securityholders who own convertible notes, the number of shares owned
prior to the offering also includes the number of shares which would be issued  
upon conversion in payment of all accrued interest through maturity. As noted   
below, some selling securityholders are subject to certain limits on the        
conversion of their convertible notes. Therefore, although they are included in 
the table below, the number of shares of common stock for some listed persons   
may include shares that are not subject to purchase during the 60 day period.   

       The number of shares registered for resale by each of Mcallum Limited
and Praxis Assets Limited under this prospectus includes shares currently       
outstanding and owned by them, shares issuable upon exercise of warrants held by
Mcallum, and, to take into account the fact that the actual conversion rate will
be based on a formula stated in the convertible notes and may fluctuate from the
assumed rate, 200% of the aggregate number of shares of common stock into which 
110% of the principal amount of such notes would be convertible. Such holders   
may not convert their notes if such conversion would cause such holder's        
beneficial ownership of our common stock (excluding shares underlying any of    
their unconverted notes) to exceed 9.99% of the outstanding shares of common    
stock. However, because of these possible fluctuations in the conversion price  
applicable to the convertible notes, the number of shares actually issued to and
sold by selling securityholders who own convertible notes may ultimately be more
or less than the number of shares shown in this table as being held by these    
selling securityholders. This variation is due to factors that cannot be        
predicted by us at this time. The most significant of these factors is the      
future market price of our common stock.                                        

        The percentage interest of each selling securityholder is based on the
beneficial ownership of that selling securityholder divided by the sum of the   
current outstanding shares of common stock plus the additional shares, if any,  
which would be issued to that selling securityholder (but not any other selling 
shareholder) when converting debentures or exercising warrants or other rights  
in the future. For purposes of presentation in this table, the 9.99% limit      
referred to above was disregarded.                                              

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                                                        [Enlarge/Download Table]

                                                     Number of Shares                                                       
                                    Position with     Owned Prior to   Percentage of  Number of Shares    Number of Shares  
Name                                 The Company         Offering       Shares Owned    Being Offered   Owned After Offering
----                                 -----------         --------       ------------    -------------   --------------------
                                                                                                                            
L&M Merchandising                       None                                                750,000                         

Greenwood Capital               Principal Stockholder                                     4,900,000                         
Partners, Inc.(1)                                                                                                           

Magdalena Zafir                         None                                                 50,000                         

NBM Investments                         None                                                 25,000                         

Frontier Capital Partners,              None                                                527,000                         
Ltd.(2)                                                                                                                     

HAA Inc.                                None                                                 27,000                         

Phil Lipshitz                           None                                                  1,000                         

Zichron Avrahom Abba                    None                                                  4,000                         

Avrahom Weiss                           None                                                  1,000                         

Congregation Ahavas Chesed              None                                                 17,000                         

M. Bassman                              None                                                 50,000                         

Resonance Limited                       None                                                448,000                         

Pokares Corp.                           None                                                160,000                         

Mcallum Limited (3)             Principal Stockholder                                    11,155,172                         

Montana Bay Ltd. (4)                    None                                                375,000                         

New Sales Limited (5)           Principal Stockholder                                                                       
                                                                                          1,100,000                         

Margaret Kestenbaum                     None                                                 50,000                         

Gold Mine Asset Management      Principal Stockholder                                     3,600,000                         
Ltd.(6)                                                                                                                     

Southstone Ltd.                         None                                                500,000                         

Praxis Asset Limited (7)        Principal Stockholder                                    10,405,172                         

Soreq, Inc.                             None                                                500,000                         

Hosford Trading Corp.                   None                                                500,000                         

Integrity International Ltd.            None                                                500,000                         

Neot Israel Ltd.                        None                                                250,000                         

Aveze Development Corp. (8)             None                                                450,000                         

Global Professional Services            None                                                250,000                         
Ltd.(9)                                                                                                                     

General Trading Corp.(10)               None                                                165,000                         

Citywide Consulting, Inc. (11)          None                                                250,000                         

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(1)  The principal stockholder of this entity is Jacob Y. "Rocky" Stefansky, the
  Chairman of the Board of Directors of Youthline USA, Inc. He is also the
    sole officer and director of this entity. See "Principal Stockholders" and
"Management."                                                         
(2)  Includes 27,000 currently outstanding and 500,000 shares underlying        
warrants at $5.00 per share.                                          
(3)  Includes 1,250,000 shares currently outstanding and 250,000 shares         
 underlying warrants at $4.00 per share. Also represents shares issuable
  upon conversion of $2 million in principal amount of our 10% convertible
    notes and in lieu of interest thereon. For this selling securityholder, we
     are registering 200% of the aggregate number of shares of common stock into
    which 110% of the principal amount of such notes would be convertible plus
1,500,000 shares currently held or issuable upon exercise of warrants.
(4)  Includes 250,000 shares currently outstanding and 125,000 shares underlying
warrants at $4.00 per share.                                          
(5)  Includes 750,000 shares currently outstanding and 350,000 shares underlying
warrants at $4.00 per share.                                          
(6)  Includes 3,000,000 shares currently outstanding, 500,000 shares underlying 
     warrants at $4.00 per share and 100,000 shares underlying warrants at $5.00
per share.                                                            
(7)  Includes 750,000 shares currently outstanding. Also represents shares      
issuable upon conversion of $2 million in principal amount of our 10% 
convertible notes and in lieu of interest thereon For this selling    
   securityholder, we are registering 200% of the aggregate number of shares
     of common stock into which 110% of the principal amount of such notes would
be convertible plus 750,000 shares currently held.                    
(8)  Includes 350,000 shares underlying warrants at $3.00 per share and 100,000 
shares underlying warrants at $5.00 per share.                        
(9)  Includes 250,000 shares underlying warrants at $3.00 per share.            
(10) Includes 165,000 shares underlying warrants at $4.00 per share.            
(11) Includes 250,000 shares underlying warrants at $5.00 per share.            

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PLAN OF DISTRIBUTION

      In this section of the prospectus, the term "selling securityholder"
means and includes: (1) the persons identified in the tables above as the       
selling securityholders and (2) any of their donees, pledgees, distributees,    
transferees or other successors in interest who may (a) receive any of the      
common stock offered hereby after the date of this prospectus and (b) offer or  
sell those shares hereunder.                                                    

      The common stock offered by this prospectus may be sold from time to
time directly by the selling securityholders. Alternatively, the selling        
securityholders may from time to time offer those shares through underwriters,  
brokers, dealers, agents or other intermediaries. The selling securityholders as
of the date of this prospectus have advised us that at that time there were no  
underwriting or distribution arrangements entered into with respect to the      
common stock offered hereby. The distribution of the common stock by the selling
securityholders may be effected in one or more transactions that may take place 
on the OTC Electronic Bulletin Board (including one or more block transaction)  
through customary brokerage channels, either through brokers acting as agents   
for the selling securityholders, or through market makers, dealers or           
underwriters acting as principals who may resell these shares on the OTC        
Electronic Bulletin Board; in privately-negotiated sales; by a combination of   
such methods; or by other means. These transactions may be effected at market   
prices prevailing at the time of sale, at prices related to such prevailing     
market prices or at other negotiated prices. Usual and customary or specifically
negotiated brokerage fees or commissions may be paid by the selling             
securityholders in connection with sales of the common stock.                   

     The selling securityholder may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In  
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with the selling securityholder. The
selling securityholder also may sell shares short and redeliver the shares to   
close out such short positions. The selling securityholder may enter into option
or other transactions with broker-dealers which require the delivery to the     
broker-dealer of the shares. The broker-dealer may then resell or otherwise     
transfer such shares pursuant to this prospectus.                               

     The selling securityholders also may loan or pledge the shares to a
broker-dealer. The broker-dealer may sell the shares so loaned, or upon a       
default the broker-dealer may sell the pledged shares pursuant to this          
prospectus. Any securities covered by this prospectus which qualify for sale    
pursuant to Rule 144 promulgated under the Securities Act may be sold under Rule
144 rather than pursuant to this prospectus. The selling securityholders have   
advised us that they have not entered into any agreements, understandings or    
arrangements with any underwriters or broker-dealers regarding the sale of their
securities. There is no underwriter or coordinating broker acting in connection 
with the proposed sale of shares by the selling securityholders.                

        Although the common stock covered by this prospectus are not currently
being underwritten, the selling securityholders or their underwriters, brokers, 
dealers or other agents or other intermediaries that may participate with the   
selling securityholders in any offering or distribution of common stock may be  
deemed "underwriters" within the meaning of the Securities Act of 1933, as      
amended (the "Securities Act"), and any profits realized or commissions received
by them may be deemed underwriting compensation thereunder.                     

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        At the time a particular offer of common stock is made by or on behalf
of a selling securityholder, to the extent required under applicable rules of   
the SEC, we will prepare a prospectus supplement setting forth the number of    
shares being offered and the terms of the offering, including the name or names 
of any underwriters, dealers, brokers, agents or other intermediaries, if any,  
the purchase price paid by any underwriter for securities purchased from the    
selling securityholders and any discounts, commissions or concessions allowed or
reallowed or paid to others, and the proposed selling price to the public.      

      Under applicable rules and regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), any person engaged in a           
distribution of the common stock offered hereby may not simultaneously engage in
market making activities with respect to the common stock for a period of up to 
five days preceding such distribution. The selling securityholders will be      
subject to the applicable provisions of the Exchange Act and the rules and      
regulations promulgated thereunder, including without limitation Regulation M,  
which provisions may limit the timing of purchases and sales by the selling     
securityholders.                                                                

       In order to comply with certain state securities laws, if applicable,
the common stock offered hereby will be sold in such jurisdictions only through 
registered or licensed brokers or dealers. In certain states, the common stock  
may not be sold unless they are registered or qualified for sale in such state, 
or unless an exemption from registration or qualification is available and is   
obtained.                                                                       

         All costs, expenses and fees in connection with the registration of the
common stock offered hereby will be borne by Youthline USA. However, any        
brokerage or underwriting commissions and similar selling expenses, if any,     
attributable to the sale of the common stock will be borne by the selling       
securityholders.                                                                

    We have agreed to indemnify certain of the selling securityholders
against certain liabilities, including liabilities under the Securities Act of  
1933, or to contribute to payments to which any of those securityholders may be 
required to make in respect thereof.                                            

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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Officers and directors                                                          

                 The names and ages of the directors and executive officers of
Youthline USA are set forth below. All Directors are elected annually by the    
stockholders to serve until the next annual meeting of the stockholders and     
until their successors are duly elected and qualified. Officers are elected     
annually by the Board of Directors to service at the pleasure of the Board.     

Name                           Age      Position(s) with the Company            
----                           ---      ----------------------------            

Jacob Y. "Rocky" Stefansky      33      Chairman of the Board                   
Saki Dodelson                   36      President, Treasurer and Director       
Susan Gertler, Ph.D.            36      Vice President, Secretary and Director  
Emanuel Yarmish                 50      Director                                
Louis Libin                     42      Director                                
Mark Siegel                     40      Vice President - Educational Sales      
Jay Ricci                       49      Vice President - Advertising            
Kathleen Hoffman                44      Director of Marketing                   

Background of Executive Officers, Directors and Significant Employees           

JACOB Y. "ROCKY" STEFANSKY, has been a Director of Youthline USA since June     
1999. From November 1991 to present, Mr. Stefansky has been the President and   
Director of KID International, Inc., an international trading company. From 1997
until present, Mr. Stefansky has been the President and director of Portugal    
Investment Group, Inc., a privately held investment fund involved with          
undervalued and start-up companies. In 1999 Mr. Stefansky became the President  
and a director of Greenwood Capital Partners, Inc., a privately held investment 
fund involved with Internet and media companies.                                

SAKI DODELSON, is the co-founder of the Youthline USA newspaper. She has served 
as the President, Treasurer and Director of Youthline USA since August 1999 and 
the President, Treasurer and Director of our subsidiary, S&S Plus, Inc., since  
inception. From 1987 to May 1999 she was a business and finance manager with    
AT&T. During this time, Ms. Dodelson was contacted by the Israeli government and
asked to redesign, improve and market the acclaimed Israeli 2000 project--the   
Israeli Knesset's website dedicated to the memory of former Prime Minister      
Yitzhak Rabin. She has been credited with turning a cumbersome government       
endeavor into an efficient, profitable project. Since 1993, Ms. Dodelson has    
been president of Harton Financial, a currency trading company. She has 15 years
experience in business and finance, computer science and marketing. She has a BS
in computer science and a BA in education. Ms. Dodelson is the sister-in-law of 
Dr. Gertler.                                                                    

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SUSAN GERTLER PH.D., created and developed the concept of Youthline USA and is  
its co-founder, publisher and executive editor. She has served as Vice          
President, Secretary and a Director of Youthline USA since August 1999 and has  
been Vice President, Secretary and Director of our subsidiary, S&S Plus, Inc.,  
since inception. From 1992 to 1994, Dr. Gertler worked as a researcher in a     
long-term study. She designed and developed systems in the area of health       
psychology, including an on-line application for quantitative analysis of mental
health status. From 1991 to 1993, Dr. Gertler conducted individual and family   
therapy in a disadvantaged area. She maintained contact with schools to         
coordinate and individualize treatment for optimal social and development       
progress. She holds a BA in education and an MA and Ph.D. in clinical psychology
from Fordham University. Dr. Gertler is the sister-in-law of Ms. Dodelson.      

EMANUEL YARMISH, has been a Director of Youthline USA since June 1999. Form 1982
to present, Mr. Yarmish has been the President of Nicole Holdings, Inc., a      
privately held real estate investment and management company.                   

LOUIS LIBIN, has been a Director of Youthline USA since July 2000. Mr. Libin is 
a recognized expert in strategic broadcast and communication systems, and has   
acted as a consultant and advisor to the FCC and US State Department. From 1996 
to present, Mr. Libin has been the President and founder of Broad Comm, a       
consulting group specializing in satellite and wireless communications with high
profile clients including GE, NBC, CBS, International Olympic Committee, various
television stations, foreign governments, and a myriad of Internet, wireless,   
and broadcast startups.                                                         

MARK SEIGEL, has served as Vice President of Educational Sales since March 2000.
From December 1998 to March 2000, he was the Sales and Marketing Vice President 
of PCS Revenue Control Systems, Inc., where he. was directly responsible for    
more than 500 public school districts and 5,000 individual public school        
accounts. During such period, he planned and directed a sales, marketing and    
Internet strategy for an industry-leading vendor of computerized school         
food-service equipment. Mr. Seigel has also held senior executive positions with
Webspan Communications, Inc. from December 1997 to December 1998, and           
MicroWarehouse, Inc from July 1995 to December 1997. He holds an MBA from Adam  
Smith University and he served worldwide as a United States Air Force officer   
from 1979-1995.                                                                 

JAY RICCI, has served as Vice President of Advertising since March 2000. He     
brings many years of experience in textbook and educational publishing including
product acquisition, development, sales and marketing. Mr. Ricci was a salesman,
acquisitions editor and district sales manager at McGraw Hill educational       
publishing from 1976 to 1985. He has served as eastern regional sales manager at
Addison Wesley educational publishing from 1985 to 1990, and as senior executive
editor at Harcourt Brace Jovanovich from 1990 to 1995. In addition, Mr. Ricci   
was the national accounts manager for new business development at Rodale        
Publishing from 1995 until joining Youthline USA. Mr. Ricci holds a BA in       
English/Education from the University of Massachusetts.                         

KATHLEEN HOFFMANN joined Youthline USA in August 2000 as Director of Marketing. 
From January 1998 to August 2000, she was an Account Director at CCM Advertising
in New York City, servicing a variety of consumer services and products. Prior  
to CCM, Ms. Hoffmann led the marketing team that successfully launched the      
History Channel for A&E Network. Ms. Hoffmann is also credited for being part of
the marketing team that launched the Prodigy On-line service from 1988-1994,    
where she developed an on-line promotion. She holds a BA from William Paterson  
University and also attended The School of Visual Arts in Manhattan.            

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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934            

   Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than ten percent     
(10%) of a registered class of our equity securities, to file with the          
Securities and Exchange Commission initial reports of ownership and reports of  
changes in ownership of common stock and other equity securities of Youthline   
USA. Officers, directors and greater than ten percent shareholders are required 
by SEC regulation to furnish the us with copies of all Section 16(a) forms they 
file.                                                                           

      To our knowledge, based solely upon its review of the copies of such
reports furnished to us during the year ended December 31, 1999, all Section    
16(a) filing requirements applicable to its officers and directors and greater  
than ten percent beneficial owners were satisfied.                              

ADVISORY BOARDS                                                                 

     Youthline USA has three Advisory Boards in the areas of multimedia,
education, and technology.                                                      

Multimedia                                                                      

The following persons are experts in the field of entertainment, television,    
radio, and newspaper. They assist us in delivering top quality media products to
Youthline USA readers.                                                          

 Mike Glenn, is a former professional basketball player. He is a
     literacy advocate for elementary school students across the nation.
Youthline USA is one of his many vehicles for the promotion of
         education, and he is a frequent participant in educational programs and
initiatives.                                                  

Russell Simmons is a prominent entrepreneur, music star, and  
         philanthropist. His endeavors include the successful Def Jam Recording,
  Phat Farm clothing line, and Rush Philanthropic Arts Foundation.
         Dedicated to the education of kids from every walk of life, Mr. Simmons
   is a frequent participant in educational programs and initiatives
across the nation.                                            

      Mike O'Hara is a business entrepreneur whose experience in marketing
         and management have gained him prominent positions with publishers such
       as the New York Press and Princeton Packet. He is currently the Chief
   Operating Officer of blahblah.com, an exciting new Internet-based
company.                                                      

Education                                                                       

The following experienced educators and psychologists provide 
invaluable advice and guidance on the development of the core Youthline USA     
products, including news, curriculum, and accountability.                       

Dr. L'Tanya Sloan, Vice President of Technology In Schools and
        President of Ed-Tech Group, has designed and implemented comprehensive
    systems that use technology to improve student achievement in many
schools throughout the country.                               

     Irma Feld Getz, independent consultant for Newspapers in Education,
       currently works as a consultant to the Philadelphia Inquirer, the New
York Times, and Youthline USA. She has been an advisor to the 
        Burlington County Times, the Delaware County Times, the New York Post,
  and several other newspapers and school districts throughout the
country.                                                      

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   Dr. Larry Aber is the Director of National Center for Children in
Poverty.                                                      

Sally Hindes, Ed.D. is a Learning Disabilities Consultant.    

Technology                                                                      

    The following persons are technology experts who have teamed up to
ensure that Youthline USA stays on the cutting edge of technological advances,  
in the worlds of both media and education.                                      

        Dr. Howard Brown is Director of DCPS TANF Programs and the Washington,
       DC school system. In addition, he is Director of Twenty-first Century
Community Learning Centers.                                   

        Mark Gura is the Director of Instructional Technology for the New York
City Board of Education.                                      

DIRECTOR COMPENSATION                                                           

  Each director of Youthline USA is entitled to receive reasonable
out-of-pocket expenses incurred in attending meetings of the Board of Directors 
of Youthline USA but do not receive compensation for services that they have    
provided as directors. Youthline USA may elect to pay non-cash consideration in 
the form of options to directors in the future. In the future, we may elect a   
cash payment as well as a non-cash consideration.                               

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

               The following table sets forth information, as of September
30, 2000 with respect to the beneficial ownership of the outstanding shares of  
our Common Stock (20,739,350 as of such date plus, where relevant for particular
beneficial owners, shares which such beneficial owner has the right to acquire) 
by (i) any holder known to us owning more than five percent (5%) of the         
outstanding shares; (ii) our officers and directors; and (iii) the directors and
officers of Youthline USA as a group:                                           

                                           Number of Shares    Percentage (%) of
  Name of Beneficial Owner*              Common Stock          Ownership
  -------------------------              ------------          ---------

Greenwood Capital Partners, Inc. (2)           4,900,000             23.63%     
Jacob Y. "Rocky" Stefansky (2)                 8,400,000             34.65%     
Emanuel Yarmish (3)                              210,000              1.01%     
Saki Dodelson (4)                              1,845,000              8.42%     
Susan Gertler (4)                              1,845,000              8.42%     
Louis Libin (5)                                  150,000               .72%     
McCallum Limited (6)                           2,163,077              9.99%     
New Sales Limited (7)                          1,100,000              5.22%     
Gold Mine Asset Management Ltd. (8)            3,600,000             16.89%     
Praxis Assets Limited (9)                      2,218,571              9.99%     
All Officers and Directors                    12,440,000             52.21%     
as a group (5 persons) (10)                                                     

*  Unless otherwise indicated, the address of all persons listed in this section
is c/o Youthline USA, Inc., 4581 US9, Howell, NJ 07731.                         

(1)  Beneficial ownership as reported in the table above has been determined in 
accordance with Instruction (4) to Item 403 of Regulation S-B of the  
Exchange Act.                                                         

(2)  Includes (i) 4,900,000 shares owned by Greenwood Capital Partners, Inc.    
  ("Greenwood"), a corporation controlled by Mr. Stefansky, (ii) 1,000,000
warrants exercisable at $.10 per share owned by GIG Consultants Inc.  
("GIG"), a corporation controlled by Mr. Stefansky, (iii) 1,500,000   
   warrants exercisable at $.10 per share, (iv) 333,333 warrants exercisable
   at $.10 per share owned by Portugal Investment Group Inc. ("Portugal"), a
corporation controlled by Mr. Stefansky, and (v) 666,667 warrants     
     exercisable at $.10 per share owned by Katimon Partners Inc. ("Katimon"), a
corporation controlled by Mr. Stefansky. All such warrants expire on  
December 31, 2004. See "Certain Transactions."                        

(3)  Represents his indirect minority ownership interest through Greenwood.     

(4)  Includes 1,170,000 warrants exercisable at $.10 per share and 375,000      
  warrants exercisable at $.05 per share. Such warrants expire on December
31, 2004. See "Certain Transactions."                                 

(5)  Includes 25,000 warrants exercisable at $1.00 per share, 25,000 warrants   
   exercisable at $2.00 per share and 25, 000 warrants exercisable at $3.00.
Such warrants expire on December 31, 2004. See "Certain Transactions."

(6)  The address for this holder is 7 Cours de Rive, 1204 Geneva, Switzerland.  
   Includes 250,000 warrants exercisable at $4.00 per share through December
  31, 2004. Also includes a maximum of 663,077 additional shares of common
stock currently issuable upon conversion of a convertible note. See   
"Certain Transactions."                                               

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(7)  The address for this holder is 7 Cours de Rive, 1204 Geneva, Switzerland.  
   Includes 350,000 warrants exercisable at $4.00 per share through December
31, 2004. See "Certain Transactions."                                 

(8)  The address for this holder is c/o Lowe Lippman, 5 St. Kilda Road, St.     
    Kilda, 3182, Victoria, Australia. Includes 500,000 warrants exercisable at
  $4.00 and 100,000 warrants exercisable at $5.00. Such warrants expire on
December 31, 2004. See "Certain Transactions."                        

(9)  The address for this holder is 7 Cours de Rive, 1204 Geneva, Switzerland.  
     Includes a maximum of 1,468,571 additional shares of common stock currently
     issuable upon conversion of a convertible note. See "Certain Transactions."

(10) See Notes (2) through (5) above.                                           

 DESCRIPTION OF SECURITIES

GENERAL                                                                         

       The following description of our capital stock does not purport to be
complete and is subject to and qualified in its entirety by our certificate of  
incorporation and bylaws, which are included as exhibits to the registration    
statement of which this prospectus forms a part, and by the applicable          
provisions of Delaware law.                                                     

     We are authorized to issue up to 50,000,000 shares of common stock,
$.0001 par value per share, of which 20,739,350 shares were issued and          
outstanding as of September 30, 2000. Our certificate of incorporation          
authorizes 5,000,000 shares of "blank check" preferred stock, none of which are 
outstanding.                                                                    

COMMON STOCK                                                                    

         Subject to the rights of holders of preferred stock, if any, holders of
shares of our common stock are entitled to share equally on a per share basis in
such dividends as may be declared by our Board of Directors out of funds legally
available therefor. There are presently no plans to pay dividends with respect  
to the shares of our common stock. Upon our liquidation, dissolution or winding 
up, after payment of creditors and the holders of any of our senior securities, 
including preferred stock, if any, our assets will be divided pro rata on a per 
share basis among the holders of the shares of our common stock. The common     
stock is not subject to any liability for further assessments. There are no     
conversion or redemption privileges nor any sinking fund provisions with respect
to the common stock and the common stock is not subject to call. The holders of 
common stock do not have any pre-emptive or other subscription rights.          

     Holders of shares of common stock are entitled to cast one vote for
each share held at all stockholders' meetings for all purposes, including the   
election of directors. The common stock does not have cumulative voting rights. 

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    All of the issued and outstanding shares of common stock are fully
paid, validly issued and non-assessable.                                        

PREFERRED STOCK                                                                 

    None of the 5,000,000 "blank check" preferred shares are currently
outstanding. Our Board of Directors have the authority, without further action  
by the holders of the outstanding common stock, to issue shares of preferred    
stock from time to time in one or more classes or series, to fix the number of  
shares constituting any class or series and the stated value thereof, if        
different from the par value, and to fix the terms of any such series or class, 
including dividend rights, dividend rates, conversion or exchange rights, voting
rights, rights and terms of redemption (including sinking fund provisions), the 
redemption price and the liquidation preference of such class or series.        

WARRANTS                                                                        

      As of September 30, 2000, we have 10,605,000 warrants outstanding as
follows: 5,875,000 exercisable at $.10 per share; 750,000 exercisable at $.05   
per share; 25,000 exercisable at $1.00 per share; 25,000 exercisable at $2.00   
per share; 665,000 exercisable at $3.00 per share; 1,390,000 exercisable at     
$4.00 per share; 950,000 exercisable at $5.00 per share; 250,000 exercisable at 
$7.00 per share; 250,000 exercisable at $9.00 per share; 300,000 exercisable at 
$12.00 per share; and 100,000 exercisable at $14.625 per share. A substantial   
portion of the warrants permit the holders to utilize a cashless exercise of    
such warrants. All of such warrants other than the warrants exercisable at      
$14.625 (which expire on March 31, 2003) expire on December 31, 2004.           

      The exercise price of the warrants and the number of shares issuable
upon exercise of the warrants will be subject to adjustment to protect against  
dilution in the event of stock dividends, stock splits, combinations,           
subdivisions and reclassifications.                                             

10% CONVERTIBLE NOTES                                                           

      On September 22, 2000, we sold $4,000,000 in principal amount of our
10% Convertible Notes. The Notes are due March 22, 2001 (which may be extended, 
at the option of the holders, until September 22, 2001). The terms of this      
transaction are set forth in a Bridge Loan Financing Agreement, a Registration  
Rights Agreement and certain related documents. The Notes are convertible at the
lower of a fixed conversion price or a variable conversion price. The variable  
conversion price is equal to 75% of the average of the lowest closing bid prices
of our common stock for the three trading days (which need not be consecutive)  
during the 15 trading days ending on the trading day immediately preceding the  
conversion date. The fixed conversion price is $.70. As of October 11, 2000, the
variable conversion price was $.2175 per share. The conversion price and the    
number of shares of common stock underlying the Notes are subject to adjustment 
for stock splits, stock dividends, combinations, capital reorganizations and    
similar events relating to our common stock.                                    

        In no event, however, will the holders of the 10% Convertible Notes be
permitted to convert if the number of shares of common stock issuable upon      
conversion would result in beneficial ownership by such holders and their       
affiliates or more than 9.99% of the outstanding shares of our common stock.    

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         The Notes are secured by the grant of a security interest in all of our
assets. The Notes are redeemable at any time by the holders in the event we     
default on our obligations or convenants. Each of the following constitutes an  
"Event of Default" pursuant to the terms of the Notes.                          

                 -   We default in the payment of principal or interest on the
                     Notes and continue to do so for a period of five business
days;                               

                -   Any of the representations or warranties that we make in
               the Notes, the Bridge Loan Financing Agreement, the
                  Registration Rights Agreement or in any certificate or
                    financial or other written statements that we furnish in
                  connection with the sale of the Notes are deemed to be
                   false or misleading in any material respect at the time
made;                               

              -   We fail to authorize or to cause our transfer agent to
                    issue shares of common stock upon exercise by the holder
                    of the conversion rights in accordance with the terms of
                      the Notes, fail to transfer or to cause our transfer agent
                  to transfer any certificate for shares of common stock
                      issued to the holder upon conversion of the Notes and when
            required by the Notes or the Registration Rights
                     Agreement, and such transfer is otherwise lawful, or fail
                  to remove any restrictive legend on any certificate or
                      fail to cause our transfer agent to remove such restricted
                     legend, in each case where such removal is lawful, as and
                  when required by the Notes, or the Registration Rights
                     Agreement, and any such failure continues uncured for ten
business days;                      

               -   We fail to perform or observe, in any material respect,
                     any other covenant, term, provision, condition, agreement
                 or obligation of the Notes and such failure continues
                     uncured for a period of 30 days after written notice from
the holder;                         

               -   We fail to perform or observe, in any material respect,
                   any convenant, term, provision, condition, agreement or
                   obligation under the Bridge Loan Financing Agreement or
              the Registration Rights Agreement and such failure
                   continues uncured for a period of 30 days after written
                     notice from the holder (other than a failure to cause the
                    registration statement to become effective no later than
                   the required effective date, as defined and provided in
                   the Registration Rights Agreement, as to which the cure
period shall be five days).         

 The Registration Rights Agreement provides that we must pay all
expenses incurred in the registration and certain expenses of the selling       
securityholders, including legal fees of counsel to the selling securityholders.
We are obligated to keep the registration statement effective with respect to   
the shares underlying the notes until the earliest of: (i) three (3) years after
the last day of the calendar month following the month in which the registration
statement is declared effective by the SEC; (ii) the date when the selling      
securityholders may sell the registrable securities under Rule 144 without      
volume or other restrictions; or (iii) the date the selling securityholders no  
longer own any of the securities.                                               

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         Under the terms of the Registration Rights Agreement we are required to
register 200% of the aggregate number of shares into which 110% of the principal
amount of the notes would be convertible plus 1,500,000 shares.                 

         The Registration Rights Agreement provides that we must pay the selling
securityholders liquidated damages equal to: 2% of the outstanding notes for the
first 30 days after certain events occur; plus, on a pro rata basis, 2% of the  
notes for each subsequent 30 day period. For example, if the registration       
statement is timely filed but is not declared effective until 165 days after    
September 22, 2000, we would have to pay liquidated damages of 5% of the        
outstanding notes (2% for days 91-120, plus 2% for days 121-150, plus 1% for    
days 151-165).                                                                  

2% SERIES B CONVERTIBLE NOTES                                                   

        On September 15, 2000, we entered into a securities purchase agreement
relating to the sale of $600,000 of our 2% Series B Convertible Notes. The Notes
are due September 15, 2003. The terms of this transaction are set forth in a    
Securities Purchase Agreement, a Registration Rights Agreement and certain      
related documents. In September 2000, the holder of such notes purchased        
$300,000 principal amount of such notes, which was repaid in full in September  
2000. The holder has the option to purchase the balance of $300,000 of such     
notes, until September 15, 2002, in $50,000 increments. The Notes are           
convertible at $.05 per share. The conversion price and the number of shares of 
common stock underlying the Notes are subject to adjustment for stock splits,   
stock dividends, combinations, capital reorganizations and similar events       
relating to our common stock.                                                   

    In no event, however, will the holders of the 2% Series B Notes be
permitted to convert if the number of shares of common stock issuable upon      
conversion would result in beneficial ownership by such holders and their       
affiliates or more than 4.99% of the outstanding shares of our common stock.    

     The Notes are redeemable at any time by the holders in the event we
default on our obligations or convenants. Each of the following constitutes an  
"Event of Default" pursuant to the terms of the Notes.                          

                 -   We fail to pay or prepay when due, all or any part of the
Notes;                              

             -   Trading in our common stock shall have been suspended
         (except for suspension of limited durations);

               -   We fail to perform or observe, in any material respect,
                   certain covenants in the Securities Purchase Agreement;

 The Registration Rights Agreement provides that we must pay all
expenses incurred in the registration and certain expenses of the selling       
securityholders. We are obligated to keep the registration statement effective  
with respect to the shares underlying the notes until the earliest of: (i)      
September 15, 2003; (ii) the date when the selling securityholders may sell the 
registrable securities under Rule 144 without volume or other restrictions; or  
(iii) the date the selling securityholders no longer own any of the securities. 

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DELAWARE ANTI-TAKEOVER LAW PROVISIONS                                           

         As a Delaware corporation, we are subject to Section 203 of the General
Corporation Law. In general, Section 203 prevents an "interested stockholder"   
(defined generally as a person owing 15% or more of a Delaware corporation's    
outstanding voting stock) from engaging in a "business combination" (as defined)
with such Delaware corporation for three years following the date such person   
became an interested stockholder unless (i) before such person became an        
interested stockholder, the board of directors of the corporation approved the  
transaction in which the interested stockholder became an interested stockholder
or approved the business combination, (ii) upon consummation of the transaction 
that resulted in the interested stockholder's becoming an interested            
stockholder, the interested stockholder owned at least 85% of the voting stock  
of the corporation outstanding at the time the transaction commenced (excluding 
stock held by the directors who are also officers of the corporation and by     
certain employee stock plans), or (iii) following the transaction in which such 
person became an interested stockholder, the business combination is approved by
the board of directors of the corporation and authorized at a meeting of        
stockholders by the affirmative vote of the holders of two-thirds of the        
outstanding voting stock of the corporation not owned by the interested         
stockholder. Under section 203, the restrictions described above also do not    
apply to certain business combinations proposed by an interested stockholder    
following the public announcement or notification of one of certain             
extraordinary transactions involving the corporation and a person who had not   
been an interested stockholder during the previous three years or who became an 
interested stockholder with the approval of the corporation's board of directors
and if such business combination is approved by a majority of the board members 
who were directors prior to any person's becoming an interested stockholder. The
provisions of Section 203 requiring a super-majority vote to approve certain    
corporate transactions could have the effect of discouraging, delaying or       
preventing hostile takeovers, including those that might result in the payment  
of a premium over market price or changes in control or management of Youthline 
USA.                                                                            

LIMITATION ON LIABILITY OF DIRECTORS                                            

        Our certificate of incorporation provides that a director of Youthline
USA will not be personally liable to Youthline USA or its stockholders for      
monetary damages for breach of the fiduciary duty of care as a director,        
including breaches which constitute gross negligence. By its terms and in       
accordance with the Delaware General Corporation Law, however, this provision   
does not eliminate or limit the liability of a director of Youthline USA (i) for
breach of the director's duty of loyalty to Youthline USA or its stockholders,  
(ii) for acts or omissions not in good faith or which involve international     
misconduct or a knowing violation of law, (iii) under Section 174 of the        
Delaware General Corporation Law, (relating to unlawful payments or dividends or
unlawful stock repurchases or redemptions), (iv) for any improper benefit or (v)
for breaches of a director's responsibilities under the Federal Securities laws.

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DIVIDEND POLICY                                                                 

        We have not paid any dividends on our Common Stock since our inception
and do not intend to pay dividends on our common stock in the foreseeable       
future. Any earnings which we may realize in the foreseeable future will be     
retained to finance the growth of Youthline USA. In addition, pursuant to the   
terms of our outstanding convertible notes, we are prohibited from paying       
dividends until such notes are repaid in full.                                  

SHARES ELIGIBLE FOR FUTURE RESALE                                               

       As of September 30, 2000, we had an aggregate of 20,739,350 shares of
our Common Stock issued and outstanding, 16,334,150 of which are "restricted    
securities," which may be sold only in compliance with Rule 144 under the       
Securities Act of 1933, as amended. Rule 144 provides, in essence, that a person
holding restricted securities for a period of one year after payment therefor   
may sell, in brokers' transactions or to market makers, an amount not exceeding 
1% of the outstanding class of securities being sold, or the average weekly     
reported volume of trading of the class of securities being sold over a         
four-week period, whichever is greater, during any three-month period. (Persons 
who are not our affiliates and who had held their restricted securities for at  
least two years are not subject to the volume or transaction limitations.) The  
sale of a significant number of these shares in the public market may adversely 
affect prevailing market prices of the our securities.                          

TRANSFER AGENT AND REGISTRAR                                                    

   The transfer agent and registrar for our common stock is American
Registrar and Transfer Company, 342 East 900 South, Salt Lake City, Utah 84111. 

         DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES                                                                     

      Our bylaws provide that we will indemnify our officers and directors
for costs and expenses incurred in connection with the defense of actions,      
suits, or proceedings against them on account of their being or having been     
directors or officers of YouthlineUSA, absent a finding of negligence or        
misconduct in the performance of their duties.                                  

         Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers or persons controlling YouthlineUSA
pursuant to the foregoing provisions, we have been informed that, in the opinion
of the Securities and Exchange Commission, such indemnification is against      
public policy as expressed in the Securities Act and is unenforceable.          

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OUR BUSINESS

SUMMARY                                                                         

      Youthline USA is an industry leader in the integration of technology
and curriculum, together with the news, into the classroom. Our mission is to   
promote reading excellence, combat the digital divide, and offer                
school-to-career training through our award-winning weekly newspaper, monthly   
magazine, and daily Web site. We have created a niche in the youth and          
educational markets by being the only company to offer this total integration of
news, technology, and curriculum basics directly into the classroom. At the same
time, Youthline USA is forging strong relationships with corporate America by   
providing them with an effective vehicle for reaching today's youth through     
advertising and sponsorships.                                                   

         Our management team brings extensive experience in business, education,
finance, publishing, marketing, and sales. In three years, the team has         
successfully grown the business from a single newspaper to a comprehensive suite
of products and services, in print and on-line, for individuals, schools, and   
corporations.                                                                   

    Our products combine to offer schools a solution to the demands of
integrating today's technology while maintaining the standards of the core      
reading curriculum. Schools lack the time, resources, and training to fully     
manage both challenges successfully. We provide a total solution, whereby       
today's technology is already fully integrated with the reading curriculum and  
is further supplemented by the print publications.                              

With this product mix, we address three major marketplaces    
simultaneously: the $15-billion interactive educational school marketplace,     
advertising for the $17 billion spent each year on consumer goods by and for    
children, and the appetite for engaging and informative educational content in  
print and online. Correspondingly, management anticipates two main sources of   
revenue from these markets: Web site subscriptions (or package subscriptions    
that include the Web site, the newspaper, and the magazine) and advertisements  
and corporate sponsorships. Among our future growth plans are expansion into    
markets abroad and the development of our YouthMall e-commerce service.         

MARKETPLACE                                                                     

     The target market for Youthline USA products and services comprises
three major component groups: schools, advertisers and individuals. The school  
and home markets have been enthusiastic subscribers to our print products since 
our debut in 1997, with weekly circulation reaching 640,000 in the first quarter
of 2000. They will continue as the driving force for our Internet offerings,    
beginning primarily in schools and then expanding into the home market. In the  
meantime, advertising is expected to generate increased revenues as our market  
penetration increases, further enhanced by corporate sponsorships.              

   Today, there are over 25 million children ages eight to 14 in the
United States. This consumer sector is recognized as a significant portion of   
the economic marketplace. In 1996, over $17 billion was spent on purchases for  
and by this age group. In 1998, $141 billion was spent on purchases for and by  
teens. The financial rewards for corporate entities that successfully address   
the needs of this market segment are enormous.                                  

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      The educational technology marketplace alone represents at least $15
billion in existing budget dollars. Significantly, schools are desperate for    
programs that introduce kids to technology while simultaneously adhering to     
curricular standards. This is a major focus of our product offerings.           

      Clearly, technology is a fundamental force in children's lives - and
will only become more critical in the future - not only for entertainment       
purposes but also for schoolwork, career opportunities, and general information 
resources. Recent surveys have demonstrated the following relevant facts        
regarding Internet usage:                                                       

o    68.2% of homes with children have personal computers, 41.0% with Internet  
connections.                                                          
o    48% of eight- to fourteen-year-old children on-line have computers in their
rooms.                                                                
o    19.8% of parents say that the Internet is the medium whose influence most  
concerns them.                                                        
o    96% of schools have Internet access.                                       
o    By the end of 2000, over 80% of all K-12 classrooms in the U.S. will have  
Internet access.                                                      

        Sixty percent of U.S. households with kids under age seven already own
a multimedia-ready PC. With the growth of the sub-$1,000 computer market, this  
number is certain to grow. It is important to note that many families are buying
new PCs specifically to access the Web. In 1999, more than half these wired     
families were going on-line. This number is certain to grow as Internet         
technologies become even more pervasive and as families become more confident in
using their already existing capabilities of getting on-line.                   

         It is clear that most kids in the U.S. have access to and use computers
at home and/or in school. Technology has become a basic part of their everyday  
lives, and for many of today's children, technology has become a fundamental    
requirement in their educational progress. Most people in the workforce today   
have only recently learned how to use the Internet to be more productive, but   
Web usage is booming, and the future of the workplace will certainly be more    
Internet dependent. Educators in thousands of schools all across the country    
realize this and are striving to prepare students for their future in the       
workplace.                                                                      

     As we move forward into the next millennium, technology will become
even more tightly integrated into children's lives and their careers as they    
grow. Most statistics about computer use these days point to a continuing boom  
in young kids on-line, and further studies support strong economic and          
productivity gains as a result of integrating technology into school and        
business. These trends are taking hold in global markets as well.               

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       Children's electronic media provides a new and exciting market with a
new paradigm. These changes come with different attitudes and behaviors, as well
as renewed expectations. Youthline USA has created exciting products and        
services to reach this market, and our offerings appeal to advertisers who want 
an entry into this space as well. At the same time, Youthline USA's newspaper,  
Web site, magazine, and educational services maintain the utmost standards of   
excellence, allowing parents and educators to trust their content and           
presentation, and ultimately promoting greater market penetration.              

PRODUCT AND SERVICE OFFERINGS                                                   

       Youthline USA began in 1997 as a newspaper for children ages eight to
fourteen. Sent to homes and schools, the 16-page publication currently (June    
2000) has a national circulation of over 640,000. With the newspaper,           
subscribing schools receive curriculum-based lesson plans, to further assist    
teachers in incorporating Youthline USA into their classrooms.                  

        During the first quarter of 2000, we introduced our Internet offering,
WWW.YOUTHLINE-USA.COM, which provides schools with the ability to integrate     
Internet technology with the reading curriculum. Students use the Web site in   
conjunction with the newspaper for educational activities, current events, and  
games. These curriculum-based activities, fully customizable by state, focus on 
promoting Reading Excellence by grade level. The site also links parents and    
educators to important resources, including its LessonStop component, which     
serve as a classroom curriculum aid. Youthline USA's accountability component   
assesses and provides immediate feedback on student performance.                

  Among our other products are regional newspaper inserts, monthly
thematic magazines, which provide an attractive vehicle for advertisers and     
corporate sponsors, inserts into adult newspapers (in conjunction with          
Newspapers in Education, as well as distribution to the home), and the upcoming 
YouthMall e-commerce marketplace for kids, parents, and educators.              

      This unique, comprehensive package provides educators with the tools
they need to fully integrate today's technology into their schools while        
maintaining the standards of the reading curriculum. Since Youthline USA        
integrates its online reading activities with state curriculum and testing      
requirements, students improve both their reading skills and their test results.
At the same time, Youthline USA keeps kids informed about ongoing world and     
national events, encourages reading through changing daily content, provides    
entertaining and engaging activities, prepares kids for business and careers    
through special online features, and helps integrate the Internet into          
children's lives. Schools are desperately seeking products and activities such  
as these to enable students to understand the present and prepare for the       
future. Youthline USA continues to be well received by educators who appreciate 
the extraordinary value of the comprehensive technological education that       
students acquire by incorporating use of the Internet into their learning. In   
recognition of our outstanding offerings, our products received the 1998        
Parents' Choice Award, the 2000 Golden Web Award and the 2000 EdPress Finalist  
Award.                                                                          

      Youthline USA's product line was designed to promote synergy between
print and on-line usage. As newspaper and magazine subscriptions grow, Web site 
traffic is driven upward by references to on-line features. Reciprocally, the   
Web site directs users to special print sections, for use at home, in camp, or  
when otherwise away from a computer. Partner school districts bring thousands of
Web users, and stickiness is achieved through the continual interactive use of  
the newspaper and magazine in the classroom, along with homework assignments    
that direct students to the Web site. Usage will become a weekly or daily       
activity, and the growing reputation and branding of the Youthline USA name is  
expected draw in non-subscribers. This self-reinforcing growth cycle is expected
to continue to attract ever-increasing numbers of advertisers and sponsors.     

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THE WEB SITE                                                                    

       There are many Web sites dedicated to children, but Youthline-USA.com
is unique in its wealth of integrated educational and entertainment content. Our
goal is to promote reading excellence, combat the digital divide, and provide   
school-to-work training--the greatest challenges facing educators today.        
Youthline USA accomplishes this by creating an online environment that trains   
students and encourages productive work habits, while maintaining student       
interest through its interactive features, puzzles, and contests. Schools across
the nation have signed on to this approach, joining our pilot programs in major 
metropolitan areas.                                                             

   Youthline USA utilizes the latest in Internet technology, such as
streaming videos, sound, and interactive activities, to make the news exciting  
and fun. These interactive activities are curriculum based to help students meet
and exceed state reading curriculum standards. To further personalize the user  
experience, students can e-mail questions about articles and receive direct     
answers. Youthline-USA.com offers regular games and contests about the news, and
student interaction is strongly encouraged by allowing children to write letters
to the editor and see their names in print. In addition, Youthline USA's Kid    
Reporters program offers students the opportunity to interview newsmakers and   
have an article (with by-line) published in the newspaper.                      

       By basing our technology offerings on the Internet, we take advantage
of the Internet's inherent portability. Subscribing students and teachers       
maintain, in essence, an "electronic backpack" which can be accessed from any   
location that has an Internet connection. Students can begin activities in      
school and continue them at home, or from a friend's house, while teachers can  
assign activities and study student assessment scores from any location.        

  Youthline USA offers other children's programs designed to bring
together children, parents, teachers, and the community. For example,           
Design-an-Ad, an activity sponsored by corporate philanthropy, lets kids create,
write, and design their own ads to deliver messages against violence, smoking,  
or drug abuse. Prizes are awarded, and the best ads run on the Web site and in  
the national newspaper.                                                         

  Plans for the immediate future include creating a virtual "Epcot
Center" on the Internet, in which each country and state will have its own      
interactive video piece, and articles in the newspaper will direct the readers  
to the appropriate segment. We also plan a Spanish product offering and a       
virtual mentoring program where, via e-mail, selected adults mentor and guide   
students with life experience. All these product offerings can be replicated in 
numerous global educational markets, anticipating Youthline USA's growth abroad.
Indeed, Youthline USA plans international expansion, initially to other         
English-speaking countries (e.g., Canada, England, and Australia).              

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       Portions of Youthline-USA.com are available to the general public. In
addition, subscribers receive access to the Youthline USA news database, which  
consists of thousands of news stories, spanning years of historical events.     
Interactive, curriculum-based on-line activities accompany many news articles.  
Content is developed with curriculum standards in mind which are fully          
customizable for each state, and workshops are arranged to better equip         
educators in integrating our products into the classroom.                       

        The ability to enhance the Internet's available content in the growing
educational market is expected to position us as the leader in Internet         
educational solutions and will enable us to continue to grow our                
subscription-based services. This, in turn, will further increase Youthline     
USA's attractiveness to corporate advertisers and sponsors.                     

THE NEWSPAPER                                                                   

       Youthline USA's 16-page weekly newspaper for kids ages eight to 14 is
similar in every respect to an adult newspaper, except that it is written with  
the child's comprehension level in mind. It is designed to grab the attention of
children, but it filters out inappropriate content. Each issue presents an      
interesting mix of timely articles on a variety of topics, including politics,  
economics, science, and weather. Relevant health and computer issues appear as  
well, always in an eye- and mind-catching manner. By covering both national and 
international news, Youthline USA connects children across the nation, while    
simultaneously introducing them to different cultures around the world.         

 Until Youthline USA appeared on the market, this country had no
newspaper suitable for kids. The newspaper has since made a tremendous splash on
the children's publication scene, and our growing suite of products and services
has received an overwhelming response from educators, parents, and children, who
are impressed and excited by our offerings.                                     

  As a member of the Associated Press (AP) and a subscriber to the
Reuters News Agency, share news sources with the major newspapers. News stories 
and accompanying graphics are both chosen and formatted with the aim of         
capturing a young reader's interest. Recognizing that the Youthline USA         
readership spans a range of ages and reading levels, writers prepare articles of
different lengths and difficulties so that every reader can find appropriate    
articles of interest. All of Youthline USA's content is reviewed by a clinical  
psychologist to ensure that it is written with children's best interests in mind
and that it is sensitive to their developmental level.                          

      In addition to introducing children to the world via news, Youthline
USA ignites within its audience an excitement for literature, art, music, and   
theater, by reviewing books, movies, and shows, and by describing the lives of  
authors, artists, and musicians. It also presents exciting short stories, games,
jokes, puzzles, and weekly detailed science experiments, magic tricks, stock    
market activities, or recipes that captivate the children and encourage them to 
try new and exciting ideas at home. These items are especially designed to keep 
readers coming back each week. Short stories are often printed in parts,        
continuing from one issue to the next, and giving readers yet another reason to 
return to the pages of Youthline USA.                                           

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        The newspaper also has a number of features that help kids develop the
skill of reading a newspaper. Extensive research went into the development of   
the perfect newspaper for children, from its appearance and set-up, to its      
content and format. Youthline USA clearly marks continuing articles. Difficult  
words are printed in bold and defined in the dictionary section at the bottom of
each page. The large print and easy language help start these young readers on  
the lifelong road to newspaper reading. The advice column - moderated by a child
psychologist - gives kids a place where they can vent their feelings, worries,  
and frustrations. Kids are encouraged to find creative solutions to their       
problems. There is also a monthly feature in the newspaper that introduces      
children to a variety of professions. By describing different careers,          
discussing the skills needed for acquiring these positions, and offering        
interviews with skilled workers in these fields, Youthline USA gives children   
the information they need to help make their dreams come true.                  

         In a world filled with indifference, the newspaper is one place to show
that individuals do have thoughts, feelings, and opinions about what goes on    
around them. Many readers have already taken advantage of the opportunity to    
express themselves. We encourage readers to write in and tell us their thoughts,
and our goal is to provide them with the vehicle to present their opinions to   
others.                                                                         

       Youthline USA's wide variety of topics and activities, as well as its
breadth of news, distinguishes it from other children's publications, many of   
which focus on a particular topic, such as sports or animals, or offer very     
little news information. This is important for two reasons: first, like adults  
reading their daily newspaper, children will skim Youthline USA in order to pick
and choose what interests them; and second, since parents are often actively    
involved in the purchasing decisions for their children's reading material, they
will prefer a higher-quality, news-oriented publication. We are confident that  
the diversity of topics, combined with the clean, high-quality nature of the    
newspaper and its focus on news information, will spark and retain the interest 
of both parents and children. At the same time, Youthline USA reaches children  
across every stratum of society. It appeals to all children, in practically any 
setting - at home, in school, at camp, in the library, or as part of            
after-school programs. Kids read the paper on their own or with their friends,  
their parents, or their teachers.                                               

REGIONAL INSERTS                                                                

      Youthline USA currently includes regional inserts (available in some
areas), four-page supplements with local information covering a specific        
geographical area. The inserts feature news, events, sports, and entertainment  
information pertaining to the relevant locales and their surrounding areas, and 
are available in all Youthline USA newspapers delivered in and around the       
targeted regions. Content appearing in regional inserts will also appear on the 
Youthline-USA.com Web site and will be complemented by special links to other   
sites of interest to kids, parents, and teachers. The first regional insert     
targeted the Philadelphia area, and the New York tri-state area began receiving 
one in the third quarter of 2000.                                               

MAGAZINE                                                                        

      Each month during the school year, Youthline USA publishes a monthly
magazine with exciting edu-tainment content and activities not generally covered
in such depth by our national newspaper. Features will include: the electoral   
process, money matters, forces of nature, adventures in space, school safety,   
environmental issues, and other topics of importance to children. In addition to
educational materials, each issue will have engaging activities to reinforce    
what is learned in that month's issue. The magazine provides a vehicle for      
Youthline USA to present major issues in far greater detail than can be explored
in the newspaper. Since the magazine is a monthly publication, we can devote the
extra time necessary to present the selected topics in the depth they deserve.  
The magazine also presents another opportunity for advertisers to reach their   
target audience in a familiar format.                                           

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LESSONSTOP                                                                      

         Acquired by Youthline USA in 1999, LessonStop provides an on-line forum
for K-12 teachers to seek, share, and discuss ideas for classroom activities. It
develops Internet-based lesson plans on topics such as creative writing, the    
arts, technology, studies in world cultures, science, and mathematics - all for 
the entire K-12 range. LessonStop also provides links to over 500 curriculum    
sites on the Web, giving teachers access to ready-made plans, templates, and    
guidance for creating their own lesson plans. Curriculum resources are          
categorized by subject area and sub-topic, as well as by grade level, for easy  
searching. The site is experiencing explosive growth in usage, and currently    
receives thousands of hits a day.                                               

         LessonStop also sends a free biweekly e-mail newsletter to thousands of
educators, with hundreds of new subscribers joining every month. Each issue is  
filled with invaluable resources, lesson plans, and related links to help       
enhance the K-12 curriculum and to further integrate Youthline USA into the     
learning day. Topics in the newsletter cover a broad range and also address     
interactive, educational games and activities. Archives of the newsletter and   
lesson plans are available through the Web site, as is the Requests, S'il Vous  
Plait (RSVP) system, which provides direct assistance in finding specific lesson
plans and information anywhere on the Internet.                                 

ACCOUNTABILITY                                                                  

      All states maintain content standards in English and Mathematics for
all children, and assessments that measure whether students meet these          
standards. Many states also include writing. We are developing a site-based     
educational accountability system that provides immediate feedback on student   
performance in the areas of Language Arts, Reading, Writing, and Mathematics,   
for all students in grades four through eight using the on-line version of      
Youthline USA. This feedback is aligned to state and local standards.           

      Last year, at the National Education Summit, governors, and business
leaders concluded that "efforts to set clear, common...academic standards for   
students in a given school or school district, or state are necessary to improve
student performance." Without standards, and assessments that measure adherence 
to those standards, students, teachers, and the public have no way of knowing   
how far they must go reach their goals. Without immediate feedback from         
incremental assessments aligned to state and local standards, it is impossible  
to realign the delivery of instruction so teachers can deliver instruction on   
the basis of improved student performance.                                      

      A January 1997 Education Week survey of 1,200 educators, stated that
96% of superintendents and principals and 93% of teachers agreed that "an       
effective public education system must be built around rigorous content         
standards that describe what students should learn in language arts,            
mathematics, science, and history." And 89% of those surveyed agreed that       
"states that set standards should also set performance levels that measure      
whether students have attained advanced, proficient, or inadequate mastery of   
the standards."                                                                 

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    The accountability section of Youthline USA's website is currently
under development. Youthline USA will assist schools and school districts with  
determining the degree to which students are performing through incremental     
assessments, aligned to the state standardized assessment (Stanford 9, ITBS,    
MSPAP, FCAT, MAT etc.) and to state standards. Each student will complete a     
specific news story with assessment items (aligned to the state assessment) that
appear at the end of the reading selection. These data will be scored, and      
feedback will be provided immediately to teachers, principals, and other        
district personnel regarding the degree to which students are "measuring up," as
compared to standardized achievement measures.                                  

Following are the five key elements of the Youthline USA Education              
Accountability System which is currently under development:                     

o    Eliminating the Digital Divide. Our instructional model will provide an    
opportunity to lessen the disparities that exist in levels of access between    
rich and poor and between suburban and inner-city children with regard to the   
quality of resources for students provided both on-line, and through print.     

o    High standards will be maintained through performance-based activities     
completed by all students at least three times during the school year. In       
addition, standards will be maintained through student participation in various 
activities such as the stock market, email communication, and interdisciplinary 
high-interest stories with activities.                                          

o    Classroom instruction will be transformed as students become actively      
engaged in a "business model" that empowers them to make "real life"            
corporate-type decisions in the classroom (i.e., daily review of email, stock   
market, choices for reading news stories, spending e-Money).                    

o    Ongoing, applied professional growth consisting of site-based teacher      
development sessions will ensure both teacher and student proficiency.          

o    Youthline USA will provide an effective curricular resource that never     
attempts to standardize students. Instead, it will operate as a work plan,      
providing for focus, connectivity, coordination, and articulation, without      
leading to slavish conformity where every teacher or student has exactly the    
same lesson on the same day from the same page in the same textbook. Youthline  
USA will define the necessary levels of focus and connectivity without leading  
to standardization.                                                             

    Youthline-USA.com will also offer the ability to track results for
every student and every activity. This will offer the educator a complete,      
instant snapshot of how students are performing. Youthline-USA.com will be to   
send this report card directly to the teacher or school, after all activities   
are complete. This instant feedback will make it much easier to judge the       
students' needs on a regular basis. Activities will be assigned on a number of  
levels. The difficulty level will be to increase as students improve their      
performance. The activity level will be tracked for every student, allowing for 
a simple way to view each student's progress.                                   

WORKSHOPS                                                                       

        Youthline USA offers free workshops on incorporating its programs into
the classroom. We also continually conduct focus groups and surveys with        
children and teachers to gather important data about our features and programs. 
With feedback from these two audiences, we regularly enhance and update our     
program to ensure the greatest benefit to our users.                            

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YOUTHMALL                                                                       

       YouthMall, Youthline USA's e-commerce application, is currently under
development. It will offer for sale only products that meet ours rigorous       
standards of acceptability. Students who participate regularly in the Stock     
Market Game, send a designated number of editorials, or otherwise actively      
participate in Youthline USA programs, will earn e-money that entitles them to  
purchase selected products, such as approved books from an on-line store.       
Students who qualify for e-money will be able to make their selections at the   
partner/vendor's Web page. Thus, in addition to learning about e-commerce and   
e-money, students who participate will also become familiar with navigating the 
Internet. The site will also carry products of interest to parents and          
educators, where adults know they can rely on the Youthline USA's standards.    
YouthMall is planned for release in the first quarter of 2001.                  

MARKETING AND SALES STRATEGY                                                    

        Youthline USA will rely on multiple revenue streams, generated through
school and individual subscriptions, on-line memberships, advertisements, and   
corporate sponsorships. These income sources are both synergistic and diverse.  
While growth in any one aspect reinforces the other, the business model is not  
dependent on any single revenue source to support the enterprise. Furthermore,  
these revenue streams are annuities that renew semi-annually, annually, or over 
a longer period of time, depending upon the contract basis.                     

      Thus, we focus most of our marketing efforts directly on schools and
district boards of education. This is important for two reasons: first, it helps
build Youthline USA's brand recognition; and second, it significantly limits any
negative impact from competitors. Rapid market penetration and branding of the  
Youthline USA name, in addition to widespread partnerships with school districts
and corporations, presents potential competitors with significant barriers to   
entry into this lucrative space.                                                

The chief sources of revenue is expected to come from Web site
subscriptions (or package subscriptions that include the Web site, the          
newspaper, and the magazine) and advertisements and corporate sponsorships.     

Youthline USA will be addressing two major marketplaces simultaneously with its 
business model:                                                                 

o    The $15-billion interactive educational school marketplace, in which 96% of
the country's 89,000 elementary schools have Internet access and 80% of all K-12
classrooms are expected to be on-line by 2001.                                  

o    The advertising marketplace for the $17 billion in consumer goods purchased
by or for the country's 25 million-plus children between eight and fourteen. To 
drive penetration into these markets, the immediate goal on which we are        
focusing our attention is to maximize the number of school subscriptions to     
Youthline USA's Internet product line.                                          

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Our business strategy includes driving the growth of our customer base by:      

o    Offering initial pilot program promotions that include incentive pricing   
for new strategic subscribers in order to build brand and product loyalty.      

o    Developing brand recognition through extensive advertising and public      
relations activities.                                                           

o    Contracting with strategic marketing and distribution partners that have   
existing or growing customer relationships, thus rapidly expanding the          
distribution and sales channels for the Youthline USA product line.             

       We intend to build a national sales force to directly address schools
and their districts across the country. The plan calls for growing from 10      
outside local reps at the end of 2000 to 100 by fourth quarter 2003.            
Concurrently, a nationwide network of local ad sales representatives is expected
to be built within the same markets. This sales force will address the          
advertising market within these local areas.                                    

      We have has already entered into agreements to launch our innovative
Internet service in Atlanta, Memphis, Chicago, New York City, and Washington    
D.C. schools. Over the next six months, Youthline USA products and services will
be available in approximately 500 schools. The pilot program will give schools  
access to Youthline USA's weekly newspaper and Web site, Youthline-USA.com, a   
subscription-based service helping students to develop essential skills needed  
to work in tomorrow's career world. Secondary markets for new subscriptions are 
companies, organizations, and professionals who provide services for children   
(i.e., pediatricians, hospitals, speech therapists, etc.).                      

     The market is extremely eager for interactive news publications for
children. We have sent 640,000 requested subscriptions (of the newspaper) to    
schools to ensure widespread usage of the Web site. In addition,                
Youthline-USA.com will be placed on all the major search engines and will       
advertise on the Internet.                                                      

    We have focused on six major avenues to obtain paid subscriptions:

1.   Sales teams that directly connect with principals and superintendents.     

2.   Advertisements in library journals and handbooks.                          

3.   Education Express, Inc., a separate non-profit organization established to 
distribute Youthline USA to schools and neighborhoods that do not have budgets  
to purchase subscriptions. As a non-profit organization, Education Express is   
eligible for grants from foundations and corporate philanthropy programs. In    
addition, Education Express will solicit donations from local businesses to     
"Adopt-A-School." Education Express will, in turn, buy subscriptions from       
Youthline USA on behalf of schools and poor neighborhoods.                      

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4.   Direct Mailing. In our first year, Youthline USA utilized direct mailings  
in the New York tri-state region with great success, achieving a 2.5% order rate
(considerably higher than the 1.0% considered to be the average for direct mail 
offering of new products). Youthline USA will send two mailings to schools per  
year on a national scale.                                                       

5.   Aligning with reading organizations, government agencies, and political    
figures to reach every elementary school in the U.S.                            

    Additional marketing tactics being investigated include mail-order
catalogues, booths in shopping malls, TV shopping networks, advertising on the  
Internet, and meetings with superintendents throughout the country.             

Also, marketing and sales activities will include:                              

o    Pitching articles about Youthline USA in national newspapers and magazines 

o    Targeting PTAs, teachers', and reading conventions                         

o    Approaching political figures (governors, mayors, senators)                

o    Publicizing to community groups                                            

o    Contacting newspaper organizations                                         

o    Marketing through teacher and library organizations                        

o    Targeting media trade journals                                             

o    Soliciting Board of Education officials directly                           

     Not only is subscription revenue growth directly generated from Web
site services and circulation growth, but advertisement and corporate           
sponsorship revenues are also directly related to circulation. The Web site must
establish a stable subscription base and also demonstrate to its potential      
advertisers that subscriptions are increasing significantly from year to year.  
Therefore, our main focus will be continued subscription growth for the Web site
and newspaper.                                                                  

 Youthline USA is currently focusing on the U.S. market, but the
newspaper and Web site easily lend themselves to international expansion. World 
and regional news can be adapted for individual countries and languages. The    
international scope of the Internet offers Youthline USA virtually unlimited    
opportunities for growth.                                                       

       Youthline USA is an attractive marketing vehicle to corporate America
due to its presence in schools, which allows advertisers to reach their market  
in a peer environment. This attraction is expected to continue to grow as       
Youthline USA penetrates further into the educational marketplace.              

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       To stand out from its competition, Youthline USA offers advertisers a
number of unusual marketing techniques, aside from standard advertisements in   
the newspaper, magazine, and Web site. Some of these marketing opportunities    
include:                                                                        

o    Sponsoring Youthline USA contests, including Essay Contests and Design an  
     Ad Contests. The latter is particularly attractive to companies, since kids
will design their own advertisements for their products.              

o    Sponsoring a specific page, such as the technology, fashion, or health     
 page, as befits that company's area of expertise. Other options in this
    category include Ask the Expert columns, both in the newspaper and online.

o    Inserting stickers and book covers into Youthline USA's weekly newspaper   
   which contain the company's logo and/or message. Kids will be using these
  items daily in a peer environment, an attractive benefit to advertisers.
     Advertisers can also print coupons in the paper, or offer coupons as prizes
for activities on the Web site.                                       

o    Public companies have the option of participating in Youthline USA's       
   popular Stock Market Experience. Other companies can join Youthline USA's
online Career Section.                                                

Youthline USA also offers partnerships that consist of a number of the above    
opportunities to reach the teen market, at a significant savings over the cost  
of individual components.                                                       

COMPETITION                                                                     

       Although Youthline USA is unique and there are no direct competitors,
we are aware of competition in specific and distinct areas of our operations.   
Management is confident, however, that there are no other entities providing the
comprehensive mix of print and multimedia solutions for educators that Youthline
USA offers.                                                                     

INTERNET COMPETITION                                                            

         Youthline USA is keenly aware of the on-line competition for children's
and educational content. Valuable educational content can be found on the Web in
sites dedicated to history, science, mathematics, technology, and virtually any 
other subject of interest. Furthermore, even education-focused e-commerce sites 
and services (e.g., assessment, lesson plans, etc.) are not in short supply.    

         Like the Web in general, this content and service area is very dynamic,
and the fast rate of change will quickly render any static competitive analysis 
stale and obsolescent. The main players in this market are currently Lightspan, 
Inc., Riverdeep Interactive Learning, Discovery School, Classroom Connect and   
Mamamedia.com. We believe that Youthline USA's model will be best positioned to 
play a major part of this development. Of such companies, our only direct       
competitor is Riverdeep; although the company, in our opinion, has robust       
offerings in math but not yet fully developed products and content in reading.  

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       It should be noted that many of the more popular children's sites are
more entertainment-oriented than educational, and we believe these players will 
only enhance our position as the premier Web site for educational content. The  
more children get used to using the Internet, the easier it will be to break    
them in to its multimedia educational concept.                                  

The educational market for on-line content is currently highly
fragmented, with news, entertainment, games, activities, and lesson plans all   
coming from separate sources. Youthline USA takes an integrated approach. Its   
content generally uses breaking news as its starting point for direct content as
well as its derivative contributions to education. Lesson plans, for instance,  
attempt to relate to the news in some way (though often tangentially) in order  
to provide a well-rounded approach while emphasizing the fact that life and     
education are integrally related. This unified philosophy, which we feel avoids 
treating education as the opposite of "real life," has generated overwhelming   
interest from school districts throughout the country, with many area school    
systems subscribing to Youthline-USA.com.                                       

PRINT COMPETITION                                                               

Several well-established and highly successful news publications are marketed   
for children:                                                                   

o    Weekly Reader weekly magazine publishes five different editions (PreK-6,   
     Current Events 6-10, Career World 7-12, Current Health 4-12, Writing 7-10).
Distribution is mostly through school subscriptions, but they also    
  distribute directly to individuals. Circulation is up to 80% of schools,
demonstrating the penetration possibilities of a good product in this 
space.                                                                

o    Scholastic News weekly magazine publishes five different editions, based on
  grade levels 1-5, and markets to classrooms throughout the country. Both
     Scholastic News and Weekly Reader are magazines, not newspapers. They offer
current events, not breaking news. This is a major difference for an  
educator looking to tie the daily news into her daily curriculum.     

o    Time for Kids is also a weekly magazine that targets kids ages eight to    
fourteen and has a circulation of 2.6 million.                        

o    Sports Illustrated for Kids publishes monthly for home consumption. It     
   targets kids ages eight to fourteen and has a circulation of 2.6 million.
Obviously, SI's subject matter is not general news.                   

    Management is extremely encouraged by the wide-ranging success and
continuing growth of this group of publications, and we are in no way daunted by
their existence. Youthline USA does not compete with them directly, and differs 
from them significantly in several ways. While Youthline USA reaches schools as 
part of the curriculum, satisfying McREL standards, the newspaper targets home  
usage as well, unlike several of the other publications. It covers breaking news
- with updates and continuations - not just themes and general topics. Youthline
USA is a 16-page newspaper, while most of the others are magazines, and         
significantly smaller. It appears weekly throughout the year, rather than       
monthly or only during the academic calendar. This underscores its use as an    
everyday newspaper for everyone. And Youthline USA is distributed through       
schools and via home delivery, and newsstands will be added as well.            

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INTELLECTUAL PROPERTY                                                           

       Our ability to compete successfully and achieve future revenue growth
will depend, in part on our ability to protect our proprietary technology and   
operate without infringing the rights of others. We have received our trademark 
YouthlineUSA(TM).                                                               

EMPLOYEES                                                                       

  As of September 30, 2000, we had 60 full-time employees. We have
employees in production, marketing, administration, and management. None of our 
employees are represented by a labor union and we have not experienced any work 
stoppages. We consider our employee relations to be good.                       

FACILITIES                                                                      

      We currently lease approximately 4,533 square feet of general office
space in Howell, New Jersey which serves as our executive offices. The annual   
rental is $83,860. The lease expires on October 31, 2004. We also lease an      
additional 1,275 square feet of general office space in Cresskill, New Jersey,  
to accommodate our editorial staff. The annual rental is $19,125. The lease     
expires on April 30, 2003. Our current facilities will provide adequate space to
house the business through our current growth, however, as we continue to       
execute our plan, additional operational and administrative space may be        
required. We believe that adequate additional space is available on competitive 
terms.                                                                          

LEGAL PROCEEDINGS                                                               

   There are no material legal proceedings pending to which we are a
party, and we are unaware of any contemplated material legal actions against us.

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

OVERVIEW                                                                        

     Youthline USA, through our wholly owned subsidiary, S&S Plus, Inc.,
publishes Youthline USA, a daily website, weekly newspaper and monthly magazine 
written and designed for children ages 8 through 14. Youthline USA makes sure   
all content is age-appropriate and is designed to attract and engage the        
attention of children within this age range. In addition, the Web site offers   
curriculum tools for educators, including curriculum-based interactive          
activities and accountability tools for tracking student performance.           

         In August 1999, we acquired all of the outstanding capital stock of S&S
Plus, Inc., a wholly owned subsidiary of Youthline USA which operated the       
publication of Youthline USA, in exchange for the issuance of 5,500,000 shares  
of its common stock, representing a majority of the total issued and outstanding
capital stock of Youthline USA. On such date, the previous management's         
directors and officers resigned and were replaced with the current officers and 
directors.                                                                      

      This exchange has been accounted for as a reverse acquisition, under
the purchase method of accounting, since the former owners of S&S Plus, Inc.    
owned a majority of the outstanding stock of Youthline USA, Inc. after the      
acquisition. Accordingly, the combination of the two companies is recorded as   
recapitalization of shareholders' equity of S&S Plus, Inc., pursuant to which   
S&S Plus, Inc. is treated as the continuing entity for accounting purposes and  
the historical financial statements presented are those of S&S Plus, Inc.       

         Youthline USA was incorporated on July 27, 1999 pursuant to the laws of
the State of Delaware as the successor to Ult-I-Med Health Centers, Inc., a Utah
corporation ("Ult-I-Med"), which was incorporated in 1983 under the laws of the 
State of Utah (originally under the name Picadilly Technology, Inc.). We were   
organized to effectuate a re-incorporation of Ult-I-Med with and into Youthline 
USA on August 16, 1999.                                                         

Ult-I-Med was originally organized to engage in the mining of 
metalliferous chemicals. In 1988, Ult-I-Med ceased such activities and began    
engaging in the business of owning and operating camping and recreation         
facilities. In 1991, Ult-I-Med ceased such activities and began engaging in the 
business of owning and operating supervised primary care, health and            
rehabilitation centers. In January 1996, Ult-I-Med filed a Chapter 11 bankruptcy
petition. Ult-I-Med liquidated all of its assets and its plan of reorganization 
was filed with the court on February 1998. All of Ult-I-Med debts were paid     
subsequent to June 30, 1999, and the court entered a final decree on September  
24, 1999.                                                                       

        Presently, we address two multi-billion dollar markets: the technology
education market and Corporate America who advertises to today's youth. To      
address the technology education market, we provide curriculum and technology to
schools using our unique web site and the daily news as a base.                 
Youthline-usa.com provides an integrated language arts curriculum customized by 
city and state, to subscribing schools, allowing them to teach their students   
the required curriculum while introducing them to the world of technology. Its  
appeal to schools is additionally enhanced by the incorporation of lesson plans 
and an accountability package that allows educators to track their students     
performance.                                                                    

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         We also print a weekly newspaper and monthly magazine to supplement the
web site. The print products encourage further integration of curriculum and    
technology and also generates advertisement and sponsorship revenue from        
Corporate America. We market ourselves to Corporate America as a unique,        
flexible, focused and powerful media for reaching today's youth on a daily,     
weekly and monthly basis. We believe that not only corporations which provide   
products and services to that age group will advertise, but any corporation     
concerned with promoting its products to tomorrow's consumers will consider     
advertising and sponsoring on Youthline.                                        

COMPONENTS                                                                      

We generate revenue from:                                                       

1) Website subscriptions to schools-$16 per student per year    
   2) Newspaper subscriptions-$30 for individual subscriptions; $7 for
bulk subscriptions                                        
       3) Magazine subscriptions-$30 for individual subscriptions; $7 for bulk
subscriptions                                             
4) Advertisements and sponsorships-$18,000 per page.            

      To date, there are 74 schools in 6 states who have subscribed to our
web site, generating $588,236.00 in revenue, which is expected to be recognized 
over a period of six months to three years. Inasmuch as the products are new and
that the concept is new, management believes that this is a strong beginning    
that demonstrates the appeal our products will have to schools nationwide.      

         To date, the following entities have advertised with Youthline: Phillip
Morris, The Academy of Natural Sciences, The American Red Cross, The Annenberg  
Center-International Children's Festival, The Crayon House, Creative Kids, The  
Harlem Globetrotters, Kewlminds/Global Children's Network, Loews/Sony Theatres, 
New York City Police Museum, Radio Disney, Sesame Place, Six Flags Great        
Adventure, Space Farms Zoo, The Sound of Music, Spotco/Suessical and Welcome    
America.                                                                        

Management believes that as name recognition grows, our list of advertisers will
also grow significantly.                                                        

Year Ended December 31, 1999 compared to Year Ended December 31, 1998.          

Results Of Operations                                                           

     In 1999 and 1998, our main source of revenues were from the sale of
newspaper subscriptions. Total revenues from subscriptions were $168,967 and    
$14,707 for 1999 and 1998, respectively. We incurred net operating losses of    
$4,787,000 in 1999, compared to $322,351 in 1998. The losses incurred in 1999   
included expenses from the issuance of our common stock and warrants recorded at
the fair market value at the time of issuance. The aggregate amount expensed in 
1999 was $3,403,768 from common stock and warrants issued for services. We      
incurred substantial costs for printing, reproduction, mailing and design of the
newspaper during these periods. Additionally, we incurred substantial costs in  
marketing, advertising and payroll expense during the initial start up of       
operations.                                                                     

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Revenues.                                                                       

   During the year ended December 31, 1999, sales revenues increased
$154,260, (1,048%) to $168,907 from $14,707 for the corresponding period in     
1998. The increase was attributable to increased subscribers and advertising    
revenues.                                                                       

Cost of Goods Sold.                                                             

       These costs include, but are not limited to printing and distribution
costs. Until September 1999 we printed 20,000 copies each week. The printing    
costs per newspaper are very high when printing so few (as much as $.10 per     
newspaper). However, now that we print over 550,000 newspapers per week, the    
cost per newspaper has been lowered to $.04 per newspaper. We therefore expect  
to see a significant profit on every paid subscription. Costs of goods sold also
include mailing and shipping costs. During 1999 costs of goods sold was         
$321,320, an increase of $158,096 or 92% from 1998. This increase was           
attributable to an increase in paid and unpaid subscriptions.                   

Net Losses and Unusual Charges.                                                 

         We incurred a net loss from operations of $4,787,000, or $.51 per share
as compared to a loss of $322,351, or $.06 per share in the comparable period in
1998. During 1999, we recorded an aggregate of $3,403,768 of charges to the     
income statement. Theses charges consisted of $1,352,868 in common stock issued 
for services and $1,800,900 of services recorded at the fair market value of    
warrants issued to employees and consultants and $250,000 representing the      
intrinsic value of the conversion feature of the convertible promissory notes.  
The fair market value of the warrants were computed using the Black-Scholes     
Option Pricing Model at the time the warrants were granted. See Note 12 to the  
financial statements.                                                           

Operating Expenses.                                                             

    Operating expenses during 1999 increased as follows: payroll costs
increased $406,943 to $455,324 (an increase of 411%) from $48,381 for the       
corresponding period in 1998. The increase was attributable to a substantial    
increase in the number of employees hired as support staff. Professional fees   
increased $143,615 to $158,060 (an increase of 994%) from $14,445 for the       
corresponding period in 1998. The increased professional fees were mainly legal 
and accounting fees relating to our reorganization. Selling expenses increased  
$281,666 to $333,580 (an increase of 543%) from $51,914 for the corresponding   
period in 1998. General & administrative costs increased $137,181 from $25,047  
(an increase of 548%) from $25,048 for the corresponding period in 1998. The    
increase in selling expenses and general and administrative expenses is         
attributable to the continued investment in our aggressive sales and marketing, 
finance and other general and administrative infrastructure necessary to support
our business development and expansion.                                         

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Interest Expense.                                                               

         Interest expense increased $1,339,734 to $1,362,952 (including non-cash
adjustments of $1,275,500) for the year ended December 31, 1999 from $23,218 for
the corresponding period ending December 31, 1998. The increase is primarily    
associated with the increased borrowing used to fund our operations as well as  
our expansion and the non-cash adjustments.                                     

Interest Income.                                                                

 Interest income was $3,786 in 1999 compared to $0 in 1998. This
increase was attributable to higher average balances of invested cash and cash  
equivalents.                                                                    

    During the 1999 period, we increased our (non-paid) circulation to
550,000 subscriptions, which should significantly increase its revenues in the  
coming year. We, however, will continue to incur expenses attributable to the   
growth of our business and therefore, management cannot estimate the amount of  
losses it may incur in the future.                                              

Income Taxes.                                                                   

       We incurred substantial losses form its inception through the current
period. From inception to August 16, 1999, we operated as a Sub-Chapter S       
corporation. Accordingly, losses aggregating $1,300,493 generated during this   
period flowed through to the individual shareholders. Subsequent to the         
reorganization, losses aggregating $3,986,745 incurred by us will be utilized   
against future operating profits. However, as a result of the net operating     
losses sustained by us, a provision for corporate taxes was not required and    
deferred taxes will be recognized when we achieve profitability.                

Year Ended December 31, 1998 compared to Year Ended December 31, 1997.          

Results Of Operations                                                           

Revenues.                                                                       

         Revenues for the calendar year ended December 31, 1998 were $14,707, an
increase of $4,604 or 46% from the prior year. The increase was attributable to 
increased paid subscriptions from the prior year.                               

Costs of Goods Sold.                                                            

         During 1998 costs of goods sold was $163,224, an increase of $95,247 or
140% from 1997. This increase was attributable to an increase in paid and unpaid
subscriptions.                                                                  

Operating Expenses.                                                             

    Operating expenses during 1998 increased as follows: payroll costs
increased $48,381 compared to the corresponding period in 1997. We incurred no  
payroll expense during its inception period in 1997. The increase was mainly    
attributable to the hiring of several support staff. Professional fees          
increased. Selling expenses and general and administrative decreased $21,958 to 
$91,706 (a decrease of 19%) from $113,664 for the corresponding period in 1997. 

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Interest Expense.                                                               

  Interest expense increased $22,955 to $23,218 for the year ended
December 31, 1998 from $263 for the corresponding period ending December 31,    
1997. The increase is primarily associated with increased borrowing used to fund
our operations as well as our expansion.                                        

Six Months Ended June 30, 2000 compared to Six Months Ended June 30, 1999.      

Results of operations                                                           

     In 1999 and 1998, our main source of revenues were from the sale of
newspaper subscriptions. For the six months ended June 30, 2000 the main source 
of revenues was from subscriptions to our web site. Web site subscriptions      
aggregated $478,856 (84%) of the $567,035 in gross revenues earned. Total       
revenues from subscriptions were $567,035 and $29,559 for the six months ended  
June 30, 2000 and 1999, respectively. We incurred net operating losses of       
$9,257,377 in 2000, compared to $133,883 in 1999. The losses incurred for the   
six months ended June 30, 2000 included $1,378,000 of interest expense utilizing
the intrinsic value of the beneficial interest of the convertible notes issued  
in the first quarter ending March 31, 2000, $1,790,000 in the value of warrants 
issued and $2,521,406 in stock issued for services. We incurred substantial     
costs for printing, reproduction, mailing and design of the newspaper during    
these periods. Additionally, we incurred substantial costs in marketing,        
advertising and payroll expense.                                                

Revenues.                                                                       

     During the six months ended June 30, 2000, sales revenues increased
$537,476, to $567,035 from $28,559 for the corresponding period in 1999. The    
increase was attributable to increased subscribers and advertising revenues and 
$478,000 in web subscriptions.                                                  

Cost of Goods Sold.                                                             

       These costs include, but are not limited to printing and distribution
costs. During the six months ended June 30, 2000 costs of goods sold was        
$1,336,643, an increase of $1,273,490 or 2,000% from the corresponding period in
1999. This increase was attributable to an increase in paid and unpaid          
subscriptions.                                                                  

Net Losses and Unusual Charges.                                                 

         We incurred a net loss from operations of $9,257,377, or $.81 per share
as compared to a loss of $133,683, or $.02 per share in the comparable period in
1999. During the first two quarters ending June 30, 2000, we recorded $1,378,000
of interest expense utilizing the intrinsic value of the beneficial interest of 
the convertible notes issued, and $4,311,406 of warrants and stock issued for   
services.                                                                       

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Operating Expenses.                                                             

       Operating expenses during the six months ended June 30 2000 increased
as follows: payroll costs increased $959,842 to $981,543 from $21,701 for the   
corresponding period in 1999. The increase was attributable to a substantial    
increase in the number of employees hired as support staff. Professional fees   
increased $86,842 to $94,055 (an increase of 1,897%) from $7,213 for the        
corresponding period in 1999. The increased professional fees were mainly legal 
and accounting fees. Selling expenses increased $917,423 to $955,587 (an        
increase of 1,651%) from $38,164 for the corresponding period in 1999. General &
administrative costs increased $298,214 from $20,616 (an increase of 1,447%) for
the corresponding period in 1999. The increase in selling expenses and general  
and administrative expenses is attributable to the continued investment in our  
aggressive sales and marketing, finance and other general and administrative    
infrastructure necessary to support our business development and expansion.     

Interest Expense.                                                               

        Interest expense increased $2,937,933 to $2,947,047 for the six months
ended June 30, 2000 from $9,111 for the corresponding period ending June 30,    
1999. The increase is primarily associated with the increased borrowing used to 
fund the operations of Youthline USA as well as its expansion. Included in      
interest expense is $2,678,500 issued for stock, warrants and the intrinsic     
value of interest on convertible notes.                                         

Interest Income.                                                                

   Interest income was $3,267 for the six months ended June 30, 2000
compared to $0 in 1999. This increase was attributable to higher average        
balances of invested cash and cash equivalents.                                 

Circulation.                                                                    

        During the six month period that ended June 30, 2000, we increased our
(non-paid) circulation to 750,000 subscriptions, which should significantly     
increase our revenues in the coming year. We, however, will continue to incur   
expenses attributable to the growth of our business and therefore, management   
cannot estimate the amount of losses it may incur in the future.                

Income Taxes.                                                                   

       We incurred substantial losses from our inception through the current
period. From inception to August 16, 1999, we operated as a Sub-Chapter S       
corporation. Accordingly, losses aggregating $1,300,493 generated during this   
period flowed through to the individual shareholders. Subsequent to the         
reorganization, losses aggregating $7,966,884 incurred by us will be utilized   
against future operating profits. However, as a result of the net operating     
losses sustained by us, a provision for corporate taxes was not required and    
deferred taxes will be recognized when we achieve profitability.                

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Liquidity and capital resources.                                                

        Management anticipates that the continued increase in subscribers will
increase advertising revenues and any future additional proceeds from financings
will result in improved liquidity during the coming year. We do not have any    
plans that would materially affect our current demands and to the best of       
management's belief there are no events that would result in major increase or  
decreases in our liquidity other than in the normal course of our operations.   

    To date we have funded our operations and expansion through bridge
financing, capital contribution and the sale of convertible promissory notes.   
Our potential sources of liquidity will be additional financings through the    
sale of convertible notes and credit facilities with banks. At June 30, 2000,   
our current assets consisted of $164,760 of cash, $613,321 of receivables and   
prepaid expenses of $57,275. At June 30, 2000 the current liabilities exceeded  
its currents assets by $2,961,224. At June 30, 2000, current debt consisted of  
$2,500,000 convertible promissory notes and accounts payable and accrued        
expenses of $1,227,971, and $148,609 unearned revenue which will be recognized  
over the next three months. We issued approximately $5,500,000 in various       
convertible notes during the three months ended September 30, 2000. These notes 
will continue to fund our operating deficit. Management anticipates that it will
satisfy its liquidity and capital requirements in the coming year through       
additional capital and funds generated by operations.                           

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       To the best of management's knowledge, other than as set forth below,
there were no material transactions, or series of similar transactions, or any  
currently proposed transactions, or series of similar transactions, to which the
Company was or is to be a party, in which the amount involved exceeds $60,000,  
and in which any director or executive officer, or any security holder who is   
known by the Company to own of record or beneficially more than 5% of any class 
of the Company's common stock, or any member of the immediate family of any of  
the foregoing persons, has an interest.                                         

In February 1998, each of Saki Dodelson and Susan Gertler, the
Company's President and Secretary, respectively, loaned the Company's           
subsidiary, S&S Plus, Inc., $125,000 ($250,000 in the aggregate). The notes bear
interest at 9% per annum. Interest payments only are made until the gross annual
sales of the subsidiary reach $1 million, at which time the subsidiary will     
begin to repay $15,000 of principal annually until the notes are paid in full.  

     In March 1999, Robert Dodelson, the father-in-law of Saki Dodelson,
loaned the Company's subsidiary, S&S Plus, Inc., $35,000. The loan was paid in  
full in December 1999.                                                          

         In May 2000, Mr. Stefansky, the Company's Chairman of the Board, loaned
the Company $125,000, interest free. This loan was repaid in May 2000.          

   In May 2000, Portugal, a company controlled by Mr. Stefansky, the
Company's Chairman of the Board, loaned the Company $225,000, which loan        
proceeds were discounted by 10%. This loan was repaid in June 2000. In July     
2000, Portugal loaned the Company an additional $200,000, interest free, which  
loan was repaid in July 2000.                                                   

In April 2000, Ms. Dodelson loaned the Company, interest free,
$120,000, which loan was repaid in April 2000. In August 2000, Ms. Dodelson     
loaned the Company, interest free, $18,000, which loan was repaid in September  
2000.                                                                           

         In July 2000, the Company issued a warrant to GIG, a company controlled
by Mr. Stefansky, to purchase up to 1,000,000 shares of Common Stock at $.10 per
share at any time prior to December 31, 2004. Such warrant was issued in        
consideration of the cancellation of warrants previously issued by the Company  
to GIG for the purchase of up to 1,200,000 shares of Common Stock (300,000      
shares of Common Stock at $3 per share, 300,000 shares of Common Stock at $5 per
share, 300,000 shares of Common Stock at $7 per share and 300,000 shares of     
Common Stock at $10 per share).                                                 

 In July 2000, the Company issued a warrant to Mr. Stefansky, to
purchase up to 1,500,000 shares of Common Stock at $.10 per share at any time   
prior to December 31, 2004, in consideration for services rendered to the       
Company by Mr. Stefansky.                                                       

  In July 2000, the Company issued a warrant to Katimon, a company
controlled by Mr. Stefansky, to purchase up to 666,667 shares of Common Stock at
$.10 per share at any time prior to December 31, 2004. Such warrant was issued  
in consideration of the cancellation of a warrant previously issued by the      
Company to Katimon for the purchase of up to 800,000 shares of Common Stock at  
$1.00 per share.                                                                

       In July 2000, the Company issued a warrant to Portugal to purchase up
to 333,333 shares of Common Stock at $.10 per share at any time prior to        
December 31, 2004. Such warrant was issued in consideration for the cancellation
of a warrant previously issued by the Company (in connection with a loan        
described above) to Portugal for the purchase of up to 400,000 shares of Common 
Stock at $ 1.00 per share.                                                      

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  In July 2000, the Company issued to Saki Dodelson, the Company's
President, a warrant to purchase up to 1,170,000 shares of Common Stock at $.10 
per share at any time prior to December 31, 2004, for services rendered and in  
lieu of warrants previously issued by the Company to Ms. Dodelson (for the      
purchase of 325,000 shares at $1.00 per share, 25,000 shares at $3.00 per share,
62,500 shares at $5.00 per share, 50,000 shares at $7.00 per share and 62,500   
shares at $10.00 per share).                                                    

  In July 2000, the Company issued to Susan Gertler, the Company's
Secretary, a warrant to purchase up to 1,170,000 shares of Common Stock at $.10 
per share at any time prior to December 31, 2004, for services rendered and in  
lieu of warrants previously issued to Ms. Gertler by the Company (for the       
purchase of 325,000 shares at $1.00 per share, 25,000 shares at $3.00 per share,
62,500 shares at $5.00 per share, 50,000 shares at $7.00 per share and 62,500   
shares at $10.00 per share).                                                    

     In July 2000, the Company issued 750,000 shares of common stock and
350,000 warrants (exercisable at $4.00 per share) to New Sales Limited, a       
principal stockholder of the Company, in consideration of $1,500,000.           

     In July 2000, the Company issued 500,000 shares of common stock and
250,000 warrants (exercisable at $4.00 per share) to McCallum Limited           
("McCallum"), a principal stockholder of the Company, in consideration of       
$1,000,000.                                                                     

         In September 2000, the Company (in connection with the issuance of a $2
million convertible note) issued 750,000 shares to McCallum. The note bears     
interest at 10% per annum and is due March 2001, which may be extended by the   
option of the holder to September 2001. The note is convertible at the option of
the holder into shares of common stock at the lower of $.70 or 75% of the market
price (as defined in the note) of the Company's common stock. The holder may not
convert such note into shares of common stock if, as a result of such           
conversion, it would beneficially own more than 9.99% of the outstanding common 
stock. Based upon the number of shares outstanding as of the date of the mailing
of this Proxy Statement, the holder would be entitled to convert a portion of   
the note into 663,077 additional shares of common stock. This figure could      
increase in certain instances, such as, for example, if the Company issues      
additional shares of common stock or if the holder disposes of all or a portion 
of its common stock. See "Principal Stockholders".                              

         In September 2000, the Company (in connection with the issuance of a $2
million convertible note) issued 750,000 shares to Praxis Assets Limited. The   
note bears interest at 10% per annum and is due March 2001, which may be        
extended by the option of the holder to September 2001. The note is convertible 
at the option of the holder into shares of common stock at the lower of $.70 or 
75% of the market price (as defined in the note) of the Company's common stock. 
The holder may not convert such note into shares of common stock if, as a result
of such conversion, it would beneficially own more than 9.99% of the outstanding
common stock. Based upon the number of shares outstanding as of the date of the 
mailing of this Proxy Statement, the holder would be entitled to convert a      
portion of the note into 1,468,571 additional shares of common stock. This      
figure could increase in certain instances, such as, for example, if the Company
issues additional shares of common stock or if the holder disposes of all or a  
portion of its common stock. See "Principal Stockholders".                      

      In August 2000, the Company issued to Louis Libin, a director of the
Company, 75,000 shares of Common Stock and warrants for the purchase of up to   
25,000 shares at $5.00 per share, up to 25,000 shares at $7.00 per share and up 
to 25,000 shares at $10.00 per share, in consideration of consulting services to
be performed by Mr. Libin on behalf of the Company. In September 2000, the      
Company reduced the exercise prices of such warrants to $1.00, $2.00 and $3.00, 
respectively.                                                                   

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       In September 2000, the Company issued to each of Ms. Dodelson and Ms.
Gertler warrants for the purchase of 375,000 shares at $.05 per share. Such     
warrants expire on December 31, 2004.                                           

        In September 2000, the Company issued 3,000,000 shares of common stock
to Gold Mine Asset Management Ltd., a principal stockholder of the Company, for 
international financial consulting services.                                    
 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

         Prior to August 1999, our shares of Common Stock were quoted on the OTC
Bulletin Board under the symbol "UMHCD". Since August 1999 the Common Stock has 
been trading under the symbol "YLNE".                                           

        The following table sets forth the range of high and low closing sales
prices for the Common Stock, in the 3rd and 4th Quarter of 1999, and the 1st,   
2nd and 3rd quarter of 2000, as reported by the OTC Bulletin Board. The trading 
volume of our securities fluctuates and may be extremely limited (or            
non-existent) during certain periods. As a result, the liquidity of an          
investment in our securities may be adversely affected. For several years prior 
to August 1999, our Common Stock did not trade.                                 

          Common Stock
          High           Low
          ----           ---
1999                                                                            
----                                                                            

Quarter ended                                                                   
September 30, 1999*               $10-3/8          $3                           

Quarter ended                                                                   
December 31, 1999                 $10              $3                           

2000                                                                            
----                                                                            

Quarter ended                                                                   
March 31, 2000                    $12-1/2          $8-1/2                       

Quarter ended                                                                   
June 30, 2000                     $ 9-7/8          $2.687                       

Quarter Ended                                                                   
September 30, 2000                $ 3-1/8          $.25                         

*    Limited trading on the OTC Bulletin Board commenced in August 1999.        

  On October 10, 2000, the last sales price as reported by the OTC
Bulletin Board was $.30 for each share of Common Stock. As of September 30,     
2000, there were 20,739,350 shares of Common Stock outstanding, held of record  
by approximately ___ record holders.                                            

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DIVIDEND POLICY                                                                 

       It is the policy of the Board of Directors to retain earnings for use
in the maintenance and expansion of our business. We have has not declared any  
cash dividends to the shareholders of its capital stock and does not intend to  
declare such dividends in the foreseeable future. We are also prohibited from   
declaring dividends pursuant to our outstanding convertible notes.              

EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS                                

           No executive officer received compensation in excess of $100,000 in
fiscal years 1998 and 1999. Each director of Youthline USA is entitled to       
receive reasonable out-of-pocket expenses incurred in attending meetings of the 
Board of Directors of Youthline USA but are not compensated for services        
provided in their capacities as directors.                                      

EMPLOYMENT AGREEMENTS                                                           

        We have entered into five-year employment agreements with each of Saki
Dodelson (President) and Susan Gertler (Vice President and Secretary). The      
employment agreements (as amended) provide for annual base salaries of $160,000 
each. The agreement also calls for the issuance of 20,000 warrants at an        
exercise price of $.10 per share and payment of 1% in cash, for each $1,000,000 
of revenues received by us commencing January 1, 2001. In addition, signing     
bonuses of $20,000 remain outstanding pursuant to the terms of the agreements.  
The employment agreements provide for discretionary bonuses to be determined in 
the sole discretion of the Board of Directors and contain covenants not to      
compete with us following termination of employment.                            

        We have entered into a five-year employment agreement with Mark Siegel
(Vice President-Educational Sales). The employment agreement provides for an    
annual base salary of $145,000. The agreement also calls for commissions to be  
paid to Mr. Siegel based upon certain agreed upon revenue thresholds. The       
employment agreement contains covenants not to compete with us following        
termination of employment.                                                      

STOCK OPTION PLANS AND AGREEMENTS                                               

        Incentive Option Plan - In January 2000, our Directors adopted and the
stockholders of Youthline USA approved the adoption of Youthline USA 2000       
Incentive Stock Option Plan ("Incentive Option Plan"). The purpose of the       
Incentive Option Plan is to enable us to encourage key employees and Directors  
to contribute to the success of Youthline USA by granting such employees and    
Directors incentive stock options ("ISOs").                                     

The Incentive Option Plan will be administered by the Board of
Directors or a committee appointed by the Board of Directors ("Committee") which
will determine, in its discretion, among other things, the recipients of grants,
whether a grant will consist of ISOs or a combination thereof, and the number of
shares to be subject to such options.                                           

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         The Incentive Option Plan provides for the granting of ISOs to purchase
Common Stock at an exercise price to be determined by the Board or the Committee
not less than the fair market value of the Common Stock on the date the option  
is granted.                                                                     

         The total number of shares with respect to which options may be granted
under the Incentive Option Plan is 4,000,000. ISOs may not be granted to an     
individual to the extent that in the calendar year in which such ISOs first     
become exercisable the shares subject to such ISOs have a fair market value on  
the date of grant in excess of $100,000. No option may be granted under the     
Incentive Option Plan after January 2010 and no option may be outstanding for   
more than ten years after its grant. Additionally, no option can be granted for 
more than five (5) years to a stockholder owning 10% or more of our outstanding 
Common Stock and such options must have an exercise price of not less than 110% 
of the fair market value on the date of grant.                                  

     Upon the exercise of an option, the holder must make payment of the
full exercise price. Such payment may be made in cash or in shares of Common    
Stock, or in a combination of both. We may lend to the holder of an option funds
sufficient to pay the exercise price, subject to certain limitations.           

       The Incentive Option Plan may be terminated or amended at any time by
the Board of Directors, except that, without stockholder approval, the Incentive
Option Plan may not be amended to increase the number of shares subject to the  
Incentive Option Plan, change the class of persons eligible to receive options  
under the Incentive Option Plan or materially increase the benefits of          
participants.                                                                   

      As of September 30, 2000, there were 15,600 options outstanding that
were issued to several of our employees (none of whom are executive officers or 
directors). The options are exercisable at $.25 per share and expire on December
31, 2005.                                                                       

 LEGAL MATTERS

         The validity of the common stock offered hereby will be passed upon for
YouthlineUSA by Berlack, Israels & Liberman LLP, New York, New York.            

 EXPERTS

       Certain of the financial statements of Youthline USA included in this
prospectus and elsewhere in the registration statement, to the extent and for   
the periods indicated in their reports, have been audited by Michael C.         
Finkelstein & Co., independent certified public accountants, whose reports      
thereon appear elsewhere herein and in the registration statement.              

 AVAILABLE INFORMATION

      Reports and other information filed by us with the Commission can be
inspected and copied at the public reference facilities maintained by the       
Commission at Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549, and at  
the Commission's New York Regional office at Seven World Trade Center, Suite    
1300, New York, New York 10048. Copies of such material can also be obtained    
from the Public Reference Section of the Commission, Washington, DC 20549 at    
prescribed rates.                                                               

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    This Registration Statement, as well as all amendments thereto and
subsequent reports, have been and will be filed through the Electronic Data     
Gathering, Analysis and Retrieval ("EDGAR") system. Documents filed through     
EDGAR are publicly available through the Commission's Website at                
http:/www.sec.gov.                                                              

    Statements contained herein as to the contents of any document are
summaries of such documents and, in each instance, reference is hereby made to  
the copy of such document filed as an exhibit to the Registration Statement, and
each such statement is qualified in all respects by such reference. All material
information of such exhibits are discussed in this Form SB-2. The Registration  
Statement may be inspected and copied at the places set forth above.            

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 TABLE OF CONTENTS
 -----------------

Independent Auditors' Report.............................................   1   

Accountants' Review Report...............................................   2   

Consolidated Balance Sheets as of                                               
December 31, 1999 (audited) and June 30 2000 (unaudited)...............  3-4

Consolidated Statements of Operations for the Years Ended                       
December 31, 1999 and 1998 (audited) and for the Six                        
Months Ended June 30 2000 and 1999 (unaudited).........................   5 

Consolidated Statements of Stockholders' Equity for the                         
Years Ended December 31, 1999 and 1998 (audited) and for                    
the Six Months Ended June 30 2000 and 1999 (unaudited).................   6 

Consolidated Statements of Cash Flows for Years Ended                           
December 31, 1999 and 1998 (audited) and for the Six                        
Months Ended June 30 2000 and 1999 (unaudited).........................   7 

Notes to the Financial Statements........................................ 8-22  

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INDEPENDENT AUDITORS' REPORT
----------------------------

To the Board of Directors and                                                   
Shareholders YouthLine USA, Inc.                                                

We have audited the consolidated balance sheet of YouthLine USA, Inc. (the      
"Company") as of December 31, 1999 and the related consolidated statements of   
operations, stockholders' equity (deficit) and cash flows for the years ended   
December 31, 1999 and 1998. 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 audit 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 YouthLine USA, Inc. as of      
December 31, 1999, and the results of their operations and their cash flows for 
the years ended December 31, 1999 and 1998 in conformity with generally accepted
accounting principles.                                                          

As discussed in Note 7, effective January 1996, the Company adopted a new basis 
of accounting, whereby all remaining assets and liabilities were adjusted to    
their estimated fair values upon confirmation under chapter 11 by the United    
States Bankruptcy Court for the Northern District of Texas. The reorganization  
plan under chapter 11 was consummated on September 24, 1999. Accordingly, the   
financial statements for periods subsequent to the reorganization are not       
comparable to the financial statements presented for prior periods.             

Michael C. Finkelstein & Co., CPA                                               
Morganville, New Jersey                                                         
February 22, 2000                                                               

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To the Board of Directors and Shareholders                                      
YouthLine USA, Inc.                                                             

ACCOUNTANTS' REVIEW REPORT
--------------------------

We have reviewed the accompanying statements of financial position of YouthLine 
USA, Inc. as of June 30, 2000 and 1999, and the related statements of           
operations, cash flows and stockholders' equity for the six month periods then  
ended, in accordance with Statements on Standards for Accounting and Review     
Services issued by the American Institute of Certified Public Accountants.      

A review of the interim financial statements consists principally of obtaining  
an understanding of the system for the preparation of interim financial         
statements, applying analytical review procedures to financial data and making  
inquires of persons responsible for financial and accounting matters. It is     
substantially less in scope than an examination in accordance with generally    
accepted auditing standards, the objective of which is the expression of an     
opinion regarding the financial statements taken as a whole. Accordingly we do  
not express such an opinion.                                                    

Based on our review, we are not aware of any material modifications that should 
be made to the accompanying financial statements for them to be in conformity   
with generally accepted accounting principles applied on a consistent basis.    

Michael C. Finkelstein & Co., CPA                                               
Morganville, New Jersey                                                         
August 15, 2000                                                                 

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                                                        [Enlarge/Download Table]
                               YOUTHLINE USA, INC.                                                        
                           CONSOLIDATED BALANCE SHEET                                                     


                                     ASSETS                                                               
                                                                                 December 31,   June 30,  
                                                                                     1999         2000    
                                                                                  ----------   ---------- 
                                                                                               (Unaudited)
                                                                                                          
CURRENT ASSETS:                                                                                           
   Cash                                                                           $  572,720   $  164,760 
   Accounts Receivable                                                                91,542      613,321 
   Stock Subscriptions Receivable                                                          -       80,000 
   Prepaid Expenses                                                                   20,753       57,275 
                                                                                  ----------   ---------- 
     TOTAL CURRENT ASSETS                                                            685,015      915,356 
                                                                                  ----------   ---------- 

FIXED ASSETS                                                                                              
   Office equipment and software (net of                                                                  
     accumulated depreciation of $35,071 and $55,948, respectively)                  107,795      227,030 
                                                                                  ----------   ---------- 

OTHER ASSETS                                                                                              
   Organization costs (net of                                                                             
     accumulated amortization of $2,578 and $3,163, respectively)                      3,272        2,687 
     Intangible Assets - Trademarks, Goodwill and Customer Lists                                          
         (Net of accumulated amortization of $33,500 and $13,000, respectively)      192,000      171,500 
                                                                                  ----------   ---------- 

     TOTAL OTHER ASSETS                                                              195,272      174,187 
                                                                                  ----------   ---------- 

     TOTAL ASSETS                                                                 $  988,082   $1,316,573 
                                                                                  ==========   ========== 

See accompanying notes to financial statements

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                                                        [Enlarge/Download Table]
                               YOUTHLINE USA, INC.                                                     
                           CONSOLIDATED BALANCE SHEET                                                  


                      LIABILITIES AND STOCKHOLDERS' EQUITY                                             
                                                                           December 31,     June 30,   
                                                                               1999           2000     
                                                                           ------------   ------------ 
                                                                                           (Unaudited) 
                                                                                                       
CURRENT LIABILITIES:                                                                                   
   Accounts Payable and Accrued Expenses                                   $    203,938   $  1,227,971 
   Unearned Revenue                                                              76,180        148,609 
   Current Portion of Notes Payable                                           1,530,000      2,500,000 
                                                                           ------------   ------------ 

      TOTAL CURRENT LIABILITIES                                               1,810,118      3,876,580 
                                                                           ------------   ------------ 

LONG TERM LIABILITIES                                                                                  
  Notes Payable                                                                 220,000        250,000 
                                                                           ------------   ------------ 

     TOTAL LONG TERM LIABILITIES                                                220,000        250,000 
                                                                           ------------   ------------ 

      TOTAL LIABILITIES                                                       2,030,118      4,126,580 
                                                                           ------------   ------------ 

STOCKHOLDERS' EQUITY:                                                                                  
  Preferred Stock, $.0001 Par Value, 5,000,000 Shares Authorized,                                      
  No Shares Outstanding                                                               -              - 
   Common Stock, $.0001 par value, 50,000,000 Shares Authorized;                                       
   10,071,665 and 11,639,165 shares issued and outstanding, respectively,         1,007          1,164 
   Additional Paid In Capital                                                 4,244,195     11,733,444 

(Deficit)                                                                    (5,287,238)   (14,544,615)
                                                                           ------------   ------------ 

      TOTAL STOCKHOLDERS' EQUITY                                             (1,042,036)    (2,810,007)
                                                                           ------------   ------------ 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 $    988,082   $  1,316,573 
                                                                           ============   ============ 

See accompanying notes to financial statements

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                                                        [Enlarge/Download Table]
                               YOUTHLINE USA, INC.                                                                             
                      CONSOLIDATED STATEMENTS OF OPERATIONS                                                                    
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999                                                               
               AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998                                                              


                                                                            December 31,                    June 30,           
                                                                       1998            1999           1999            2000     
                                                                   ------------    ------------   ------------    ------------ 
                                                                                                          (Unaudited)          
                                                                                                                               
NET SALES                                                          $     14,707    $    168,967   $     29,559    $    567,035 
                                                                   ------------    ------------   ------------    ------------ 

OPERATING EXPENSES:                                                                                                            
  Cost of Goods Sold (Exclusive of Depreciation and Amortization,                                                              
     shown separately below)                                            163,224         321,320         63,153       1,336,643 
  Employee Stock Based Compensation                                                                          -       1,550,000 
  Payroll and Related Costs                                              48,381       1,355,324         21,701       1,021,543 
  Consulting Services                                                         -       1,228,268              -       1,558,545 
  Selling Expenses                                                       51,914         333,580         38,164         955,587 
  Professional Fees                                                      14,445         158,060          7,213          94,055 
  General and Administrative                                             25,047         162,228         20,616         318,830 
  Depreciation and Amortization                                          10,529          34,035          3,281          41,962 
                                                                   ------------    ------------   ------------    ------------ 

  TOTAL OPERATING EXPENSES                                              313,540       3,592,815        154,128       6,877,165 
                                                                   ------------    ------------   ------------    ------------ 

     Loss from operations before provision for income taxes            (298,833)     (3,423,848)      (124,569)     (6,310,130)
                                                                   ------------    ------------   ------------    ------------ 

OTHER INCOME AND EXPENSES                                                                                                      

  Interest Expense (Net of Interest Income of $3,267 in 2000                                                                   
     and $0 in 1999)                                                     23,218       1,362,952          9,114       2,947,047 
                                                                   ------------    ------------   ------------    ------------ 

     Loss before provision for Income Taxes                            (322,051)     (4,786,800)      (133,683)     (9,257,177)
                                                                   ------------    ------------   ------------    ------------ 

PROVISION FOR STATE INCOME TAX                                              300             200            200             200 
                                                                   ------------    ------------   ------------    ------------ 

     Net Loss                                                      $   (322,351)   $ (4,787,000)  $   (133,883)   $ (9,257,377)
                                                                   ============    ============   ============    ============ 

Net Loss per Common Share (Basic and Diluted)                      $      (0.06)   $      (0.51)  $      (0.02)   $      (0.85)
                                                                   ============    ============   ============    ============ 

Weighted Average Common Shares Outstanding                            5,507,972       9,435,216      5,508,200      10,855,415 
                                                                   ============    ============   ============    ============ 

See accompanying notes to financial statements

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                                                        [Enlarge/Download Table]
                               YOUTHLINE USA, INC.                                                                       
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)                                                     
               FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)                                                        
                 AND THE YEARS ENDED DECEMBER 31, 1999 AND 1998                                                          


                                                 Common Stock                     Capital    Accumulated                 
                                                   Number of          Par      in excess of    Deficit          Total    
                                                 ------------    ------------  ------------  ------------   ------------ 
                                                                                                                         
Balance at December 31, 1998                        5,508,200    $        551  $    118,212  $   (500,238)  $   (381,475)
     Contribution to Paid-in-Capital                        -               -       523,215             -        523,215 
     Sale of Common Stock                           4,400,000             440        44,000             -         44,440 
     Stock Issued for Services and                                                                                       
        Value Ascribed to Warrants                    163,465              16     3,308,768             -      3,308,784 
     Convertible Notes - Beneficial Interest                -               -       250,000             -        250,000 
     Net Loss for Period                                    -               -             -    (4,787,000)    (4,787,000)
                                                 ------------    ------------  ------------  ------------   ------------ 

Balance at December 31, 1999                       10,071,665           1,007     4,244,195    (5,287,238)    (1,042,036)

     Sale of Common Stock                             910,000              91     1,819,909             -      1,820,000 

     Stock Issued for Services and Financings         657,500              66     2,521,340             -      2,521,406 

     Value Ascribed to Issuance of Warrants                 -               -     1,790,000             -      1,790,000 

     Convertible Notes - Beneficial Interest                -               -     1,358,000             -      1,358,000 

     Net Loss for Period                                    -               -             -    (9,257,377)    (9,257,377)
                                                 ------------    ------------  ------------  ------------   ------------ 

Balance at June 30, 2000                           11,639,165    $      1,164  $ 11,733,444  $(14,544,615)  $ (2,810,007)
                                                 ============    ============  ============  ============   ============ 

Balance at December 31, 1998                        5,508,200    $        551  $    118,212  $   (500,238)  $   (381,475)

     Net Loss for Period                                    -               -             -      (133,883)      (133,883)
                                                 ------------    ------------  ------------  ------------   ------------ 

Balance at June 30, 1999                            5,508,200    $        551  $    118,212  $   (634,121)  $   (515,358)
                                                 ============    ============  ============  ============   ============ 

See accompanying notes to financial statements

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                                                        [Enlarge/Download Table]
                               YOUTHLINE USA, INC.                                                                           
                      CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                  
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999                                                             
               AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998                                                            


                                                                           December 31,                   June 30,           
                                                                      1998            1999          1999            2000     
                                                                   -----------     -----------   -----------     ----------- 
                                                                                                         (Unaudited)         
                                                                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                        
     NET LOSS FROM OPERATIONS                                      $  (322,351)    $(4,787,000)  $  (133,883)    $(9,257,377)
     Adjustments to reconcile net loss from operations                                                                       
     to net cash used by operating activities:                                                                               
   Depreciation and Amortization Expense                                10,529          34,035         1,477          41,962 
   Common Stock Issued for Services                                          -       1,507,868             -       1,460,906 
   Stock Based Compensation                                                  -       1,800,900             -       1,550,000 
   Interest Expense - Beneficial Conversion Interest and                                                                     
        Intrinsic Value of Warrants                                          -         250,000             -       2,658,500 
   Increase in Accounts Receivables                                     (1,729)        (89,708)            -        (521,779)
   Increase in Subscriptions Receivable                                      -               -             -         (80,000)
   Increase (Decrease) in Prepaid Expenses                              35,269         (20,753)            -         (36,522)
   Increase in Accounts Payable and Accrued Expenses                    25,215         142,854         3,902       1,024,033 
   Increase in Unearned Revenues                                             -          50,965         1,771          72,429 
                                                                   -----------     -----------   -----------     ----------- 

   NET CASH USED BY OPERATIONS                                        (253,067)     (1,110,839)     (126,733)     (3,087,848)
                                                                   -----------     -----------   -----------     ----------- 

CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                        
      Purchase of Office Equipment                                           -        (205,000)            -        (140,112)
      Repayment of Notes Payable                                        (3,124)       (114,157)            -        (500,000)
                                                                   -----------     -----------   -----------     ----------- 

    NET CASH USED BY INVESTING ACTIVITIES:                              (3,124)       (319,157)            -        (640,112)
                                                                   -----------     -----------   -----------     ----------- 
 CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                       
      Increase in Loans and Exchanges                                  311,973          15,346        64,974               - 
     (Decrease) in Loans and Exchanges                                (305,799)        (80,373)            -               - 
      Sale of Common Stock                                                   -               -             -       1,820,000 
      Proceeds of Bridge Financing                                           -         500,000             -               - 
      Issuance of Promissory Notes                                           -               -             -         500,000 
      Proceeds fom Notes Payable - Officers                            250,000               -             -               - 
      Sale of Common Stock and Contributions to Paid-in-Capital              -         567,655             -               - 
      Issuance of Convertible Promissory Notes                               -       1,000,000             -       1,000,000 
                                                                   -----------     -----------   -----------     ----------- 

    NET CASH PROVIDED BY FINANCING ACTIVITIES                          256,174       2,002,628        64,974       3,320,000 
                                                                   -----------     -----------   -----------     ----------- 
 Net (Decrease) Increase  in Cash and Cash Equivalents                     (17)        572,632       (61,759)       (407,960)

 Cash and Cash Equivalents at Beginning of Year                            105              88          (738)        572,720 
                                                                   -----------     -----------   -----------     ----------- 
 Cash and Cash Equivalents at End of Year                          $        88     $   572,720   $   (62,497)    $   164,760 
                                                                   -----------     -----------   -----------     ----------- 

 SUPPLEMENTAL CASH FLOW INFORMATION:                                                                                         
    Cash Paid During the Period for                                                                                          
    Interest                                                       $     2,567     $    15,325   $         -     $   222,868 
                                                                   ===========     ===========   ===========     =========== 
    Income Taxes                                                   $       300     $       300   $       200     $       580 
                                                                   ===========     ===========   ===========     =========== 

  NON CASH INVESTING ACTIVITIES:                                                                                             

   Capitalization of Officers' Loans                               $   103,479     $         -   $         -     $         - 
                                                                   ===========     ===========   ===========     =========== 

See accompanying notes to financial statements

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 1      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING       
PRINCIPLES                                              

REVERSE ACQUISITION                                     

           In August 1999, the Company acquired all of the outstanding capital
         stock of S&S Plus, Inc., a wholly owned subsidiary of the Company
            which operated the publication of Youthline USA, in exchange for the
        issuance of 5,500,000 shares of its common stock, representing a
         majority of the total issued and outstanding capital stock of the
      Company. On such date, the previous management's directors and
         officers resigned and were replaced with the current officers and
directors.                                              

            This exchange has been accounted for as a reverse acquisition, since
     the former owners of S & S Plus, Inc. owned a majority of the
      outstanding stock of Youthline USA, Inc after the acquisition.
        Accordingly, the combination of the two companies is recorded as
    recapitalization of shareholders' equity of S & S Plus, Inc,
       pursuant to which S & S Plus, Inc. is treated as the continuing
   entity for accounting purposes and the historical financial
            statements presented are those of S & S Plus, Inc. Youthline USA had
           nominal assets consisting of cash in the amount of $11,826, and had
no operations for the two years ended December 31, 1999.

A) BACKGROUND                                           

        YouthLine USA, Inc. (the "Company") was incorporated on July 27,
           1999 pursuant to the laws of the State of Delaware as the successor
            to Ult-I-Med Health Centers, Inc., a Utah corporation ("Ult-I-Med"),
          which was incorporated in 1983 under the laws of the State of Utah
           (originally under the name Picadilly Technology, Inc.). The Company
           was organized to effectuate a reincorporation of Ult-I-Med with and
into the Company on August 16, 1999.                    

     Ult-I-Med was originally organized to engage in the mining of
          metalliferous chemicals. In 1988, Ult-I-Med ceased such activities
          and began engaging in the business of owning and operating camping
            and recreation facilities. In 1991, Ult-I-Med ceased such activities
  and began engaging in the business of owning and operating
      supervised primary care, health and rehabilitation centers. In
       January 1996, Ult-I-Med filed a Chapter 11 bankruptcy petition.
Ult-I-Med liquidated all of its assets and its plan of  
        reorganization was filed with the court in February 1998. All of
            Ult-I-Med debts were paid subsequent to June 30, 1999, and the court
   entered a final decree on September 24, 1999. Ult-I-Med had
           prepetition indebtedness of $268,919 in its entirety, consisting of
          secured and unsecured liabilities. All but $132,033 of the secured
 liabilities were discharged in the chapter 11 bankruptcy.

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 1      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING       
PRINCIPLES                                              
(Continued)                                                                     

B) FRESH-START REPORTING                                

           The Company's Reorganization Plan under Chapter 11 was confirmed by
       the United States Bankruptcy Court for the Northern District of
          Texas, Fort Worth Division. The formal confirmation was entered in
         January 1996 and the court consummated the reorganization plan on
  September 24, 1999. As a result of the confirmation of the
          Reorganization Plan, the Company implemented fresh-start reporting
      as of January 1996. Under the provisions of AICPA Statement of
       Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities in
            Reorganizations under the Bankruptcy Code", the Company was required
          to adopt fresh-start reporting upon emergence from Chapter 11 that
       resulted in a new reporting entity with no retained earnings or
accumulated deficit as of January 1996.                 
        Accordingly, all assets and liabilities were restated to reflect
        their reorganization value, which approximates fair value at the
date of reorganization.                                 

           The Bankruptcy court confirmed the Company's plan of reorganization
            in January 1996. It was determined that the Company did not have any
    assets as of the confirmation date, and the prior management
    contributed the necessary funds to pay off its post petition
liabilities.                                            

            The Company's total secured and unsecured debts aggregated $132,033.
     As of October 11, 1999, the Company satisfied all such debts.

C) MERGER AND RECAPITALIZATION                          

           In August 1999, the Company acquired all of the outstanding capital
         stock of S&S Plus, Inc., a wholly-owned subsidiary of the Company
            which operated the publication of Youthline USA, in exchange for the
        issuance of 5,500,000 shares of its common stock, representing a
         majority of the total issued and outstanding capital stock of the
      Company. On such date, the previous management's directors and
         officers resigned and were replaced with the current officers and
   directors. This exchange will be accounted for as a reverse
      acquisition under the purchase method of accounting, since the
          former shareholders of the S & S Plus, Inc. will own a majority of
   the outstanding stock of the Company after the acquisition.
          Accordingly, the combination of the two companies will be recorded
        as recapitalization of shareholders' equity of S & S Plus, Inc.,
       pursuant to which S & S Plus, Inc. is treated as the continuing
   entity for accounting purposes and the historical financial
statements presented will be those of S & S Plus, Inc.  

D) DESCRIPTION OF BUSINESS                              

           The Company, through its wholly owned subsidiary, S & S Plus, Inc.,
          publishes YOUTHLINE USA, a weekly newspaper and a monthly magazine
written and designed for children ages 8 through 13.    

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 1      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING       
PRINCIPLES                                              
(Continued)                                                                     

          In every respect, it is similar to an adult newspaper, except that
          it is written at the children's level and it filters out news that
        is not age appropriate. It is designed to attract and engage the
attention of children within this age range.            

           The Company also produces its website, YOUTHLINE-USA.COM which is a
        subscription based website rich in educational and entertainment
            content. The Company generates revenue through the sale of print and
website subscriptions, advertisement space and corporate
            sponsorships. Subscriptions can either be bulk subscriptions ordered
          by schools, or as individual subscriptions for children to read at
home.                                                   

E) CONSOLIDATED FINANCIAL STATEMENTS                    

         The consolidated financial statements include the accounts of the
          Company and its subsidiary. All significant inter-company accounts
           and transactions are eliminated. Management of the Company has made
         estimates and assumptions relating to the reporting of assets and
       liabilities and disclosure of contingent liabilities to prepare
        these financial statements in conformity with generally accepted
accounting principles.                                  

F) CASH EQUIVALENTS                                     

          For purposes of the statement of cash flows, the Company considers
       all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents.            

G) ACCOUNTS RECEIVABLE AND REVENUE RECOGNITION          

    Accounts receivable consists of balances due the Company for
            newspaper and advertising revenues. Accounts receivable are current,
          accordingly, a provision for bad debt is not required. The Company
        recognizes revenues through the sale of newspaper subscriptions,
        website subscriptions and advertising. Subscription revenues are
       recognized over the term of the contract which is generally one
       year. Advertising revenues are recorded upon the placement of a
          sponsor's advertisement in the Company's newspaper and delivery to
subscribers.                                            

H) FIXED ASSETS                                         

           Computer equipment and furniture and fixtures are depreciated using
          the straight-line method over their estimated useful lives ranging
           from five to seven years. The costs of additions and betterment are
         capitalized, repairs and maintenance costs are charged to general
            and administrative expenses. Organization costs are amortized over a
period of five years on a straight-line basis.          

            Intangible assets represents the purchase price at fair market value
         of trademarks, goodwill and customer lists. Intangible assets are
           being amortized over a period of five years using the straight line
        method. The annual amortization expense for 1999 was $13,000. At
    December 31, 1999, accumulated amortization was $13,000. The
       amortization expense for the six months ended June 30, 2000 was
$20,500.                                                

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 1      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING       
PRINCIPLES                                              
(Continued)                                                                     

I) EARNINGS PER SHARE                                   

     Statement of Financial Accounting Standards ("SFAS") No. 128,
          "Earnings Per Share" discusses the computation and presentation of
          earnings per share ("EPS"). Basic EPS, as defined by SFAS No. 128,
          is computed by dividing income available to common shareholders by
        the weighted average number of common shares outstanding for the
     reporting period, ignoring any potential effects of dilution.
       Diluted EPS reflects the potential dilution that would occur if
            securities, or other contracts to issue common stock, were exercised
            for which the market price of the common shares exceeds the exercise
         price, less shares which could have been purchased by the Company
    with related proceeds. The additional shares of common stock
 converted would then share in the earnings of the entity.

            There were 2,840,000 common stock options outstanding as of December
   31, 1999. As a result of the losses reported in the periods
      presented, these options, if exercised, would be antidilutive.
          Accordingly, Basic EPS and diluted earnings per share are the same
      as presented in the financial statements. The weighted-average
      number of shares used in the computation of per share data was
5,507,972 in 1998 and 9,435,216 in 1999.                

            There were 7,155,000 common stock options/warrants outstanding as of
        June 30, 2000. As a result of the losses reported in the periods
      presented, these options, if exercised, would be antidilutive.
          Accordingly, Basic EPS and diluted earnings per share are the same
      as presented in the financial statements. The weighted-average
      number of shares used in the computation of per share data was
10,885,415 in June 2000 and 5,508,200 in June 1999.     

J) INCOME TAXES                                         

        Effective January 7, 1997, the Company applied for, and received
        approval to be taxed as an "S" Corporation for Federal and State
        income tax purposed. The effect of this election is that taxable
   results of operations and tax credits are reportable on the
         individual tax returns of the stockholders. Accordingly, for 1999
         and 1998, no Federal Corporate income taxes have been provided in
        these financial statements. However, a provision for the minimum
corporate state taxes has been included.                

       The Company intends to follow Statement of Financial Accounting
        Standards No. 109 (SFAS 109), "Accounting for Income Taxes" when
         either operations achieve profitability or the realization of net
       operating loss benefits can more readily be measured, whichever
occurs first.                                           

K) USE OF ESTIMATES                                     

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions. These estimates and assumptions affect the reported
       amounts of assets and liabilities, the disclosure of contingent
      liabilities and the reported amounts of revenues and expenses.
Actual results could differ from estimates.             

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 2      FIXED ASSETS - OFFICE AND EQUIPMENT SOFTWARE                        

Office equipment and software consist of the following: 

                                                December 31,      June 30,
                                                  1999            2000
                                                ----------      ----------

         Office Equipment and Software          $  142,866      $  282,978
          Less:  Accumulated Depreciation           (35,071)        (55,948)
                                                ----------      ----------
              Net Book Value                    $  107,795      $  227,030
                                                ==========      ==========

           Depreciation expense for the years ended December 31, 1999 and 1998
          amounted to $19,677 and $9,359, respectively. Depreciation expense
           for the six months ended June 30, 2000 and 1999 amounted to $20,877
and $2,696, respectively.                               

     Other Assets and Organization costs consist of the following:

                                                December 31,      June 30,
                                                  1999            2000
                                                ----------      ----------

        Organization Costs                       $  5,850       $  5,850
         Less:  Accumulated Depreciation            (2,578)        (3,163)
                                                 --------       --------
             Net Book Value                      $  3,272       $  2,687
                                                 ========       ========

           Amortization expense for the years ended December 31, 1999 and 1998
            amounted to $1,170 for each period. The amortization expense for the
         six months ended June 30, 2000 and 1999 was $585 for each period.

NOTE 3      EMPLOYMENT AGREEMENTS                                               

          The Company executed two employment contracts on May 28, 1999 with
         certain senior executives for future services that vary in length
           for periods of up to five years. Each employment contract will call
            for a base salary of $115,000 with annual increases of 7% per annum.
           The contracts also include options to purchase 10,000 shares of the
          Company's common stock at a 20% discount off the maximum price per
        share in the Company's next private placement. Additionally, the
           employment contract also includes a one-time signing bonus equal to
         $30,000 payable as follows: $10,000 within 30 days of signing the
     contract, and the balance of $20,000 payable upon the Company
            attaining 10,000 subscribers for a period of two consecutive months.

         The employment agreements were amended in June and August 2000 to
            increase the base salary to $160,000 annually. The amended agreement
           also calls for the issuance of 20,000 warrants at an exercise price
           of $.10 per warrant and 1% in cash, for each $1,000,000 of revenues
         received by the Company commencing January 1, 2001. The contracts
       also include options to purchase 10,000 shares of the Company's
         common stock at a 20% discount off the maximum price per share in
          the Company's next private placement. Additionally, the employment
        contract also includes a one-time signing bonus equal to $30,000
          payable as follows: $10,000 within 30 days of signing the contract
           (this amount has been paid), and the balance of $20,000 (accrued as
   of June 30, 2000) payable upon the Company attaining 10,000
subscribers for a period of two consecutive months.     

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 4      NOTES PAYABLE                                                       

          A) On February 1, 1998, the Company issued two promissory notes in
        the principal amount of $125,000, payable to Saki Dodelson
         (President) and Susan Gertler (Vice-President), aggregating
        $250,000. The notes bear interest at an annual rate of 9%,
             payable monthly. Principle repayment will be deferred until the
          gross annual sales of the Company reach $1,000,000; at which
            point the Company will repay $15,000 of principle on each note
              annually. The accrued interest payable on these notes aggregated
            $30,025 through December 31, 1999. Accrued interest payable on
   these notes aggregated $28,150 through June 30, 2000.

          B) On August 31, 1999, the Company entered into a bridge financing
         agreement aggregating $500,000 (the "Note"). The note bears
           interest at 8% per annum, matures on January 19, 2000, and is
        secured by all assets and properties owned by the Company.
            Additionally, in consideration for such financing, the Company
           issued 100,000 shares of its $.0001 par value common stock of
           $10.0 per share. The Company recorded a $1,000,000 commission
               expense in connection with the financing agreement. Additionally,
             in connection with the placement of such financing, the Company
               also paid a one-time fee of $50,000 to Robb Peck McCooey Clearing
            Corporation and issued 50,000 warrants at an exercise price of
          $.10 per share. This transaction was with an unrelated third
party. The note was repaid in January 2000.       

          C) On December 14, 1999, and December 21, 1999, the Company issued
         two convertible promissory notes in the principal amount of
               $500,000 each, aggregating $1,000,000. The notes bear interest at
        an annual rate of 8.5% and mature on December 14, 2000 and
             December 21, 2000, respectively. Interest and principal will be
          paid at maturity. Additionally, any portion of the notes and
          accrued interest can also be converted into shares of common
            stock at the lenders' option at a price equal to 20% below the
               fair market value of the common shares, with a minimum conversion
         price of $3.00 per share, and a maximum price of $4.875 per
        share. The Company recorded a one-time interest expense of
     $250,000 which is the intrinsic value of the beneficial
          conversion feature of the note. The fair market value of the
          stock at the date of issuance was $3.75 and $5.00 per common
             share on December 14, 1999 and December 21, 1999, respectively.

      D) During the first quarter ending March 31, 2000, the Company
     issued several convertible promissory notes aggregating
               $1,000,000. The notes bear interest at an annual rate of 8.5% and
               mature one year from the date of issuance. Interest and principal
          will be repaid at maturity. Additionally, any portion of the
             notes and accrued interest can also be converted into shares of
               common stock at the lenders' option at a price equal to 20% below
        the fair market value of the common shares, with a minimum
         conversion price of $3.00 per share, and a maximum price of
        $4.875 per share. The Company recorded a one-time interest
       expense of $1,378,000 which is the intrinsic value of the
              beneficial conversion feature of the note. The fair market value
            of the stock at the date of issuance ranged between $10.69 and
$12.13 per common share.                          

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

         E) On April 10, 2000, the Company issued a note for $250,000. The
               note bears interest at an annual rate of 6.0% and matures on July
               10, 2000. Additionally, in consideration of the loan, the Company
           issued 150,000 warrants to purchase common stock at $3.00 per
 share with an expiration date of December 31, 2004.

            F) On May 17, 2000, the Company issued a note for $250,000. The note
             bears interest at an annual rate of 8.5% and matures on October
         17, 2000. In consideration of such loan, the Company issued
               250,000 shares of its restricted common stock. The 250,000 shares
           of the Company's common stock were contingent upon the lender
          making an additional loan of $300,000. The loan was made and
               subsequently repaid. Accordingly, the Company recorded a one-time
            interest expense aggregating $812,500 based on the fair market
value of the stock at the time of issuance.       

Long Term Debt consists of the following:               

                                             DECEMBER 31, 1999
                                           ---------------------------------
                                             TOTAL     LONG TERM   CURRENT
                                            ----------   ---------  ----------

           A)  Notes Payable - Officers     $  250,000    $220,000  $   30,000

B)  Bridge Financing (Paid off                          
                  January 2000)                500,000           -     500,000

           C)  Convertible Promissory Notes  1,000,000           -   1,000,000
                                            ----------    --------  ----------

                                            $1,750,000    $220,000  $1,530,000
                                            ==========    ========  ==========

          At December 31, 1999, the aggregate of amount of required payments
on long-term debt was as follows:                       

                      2000                $1,530,000
                      2001                    30,000
                      2002                    30,000
                      2003                    30,000
                      2004                    30,000
                Thereafter                   100,000
                                          ----------

Total Payments                              $1,750,000  
                                          ==========

                                             JUNE 30, 2000
                                              --------------------------------
                                               TOTAL    LONG TERM    CURRENT
                                              ---------- ---------  ----------

           A)  Notes Payable - Officers       $  250,000  $250,000  $        -

           B)  Convertible Promissory Notes    1,000,000         -   1,000,000

           C)  Convertible   Promissory Notes  1,000,000         -   1,000,000

           E)  Note Payable                      250,000         -     250,000

           F)  Note Payable                      250,000         -     250,000
                                              ----------  --------  ----------
                                              $2,750,000  $250,000  $2,500,000
                                              ==========  ========  ==========

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 4      NOTES PAYABLE                                                       
(Continued)                                                                     

         At June 30, 2000, the aggregate of amount of required payments on
long-term debt was as follows:                          

                      2000                 $  30,000
                      2001                    30,000
                      2002                    30,000
                      2003                    30,000
                      2004                    30,000
                Thereafter                   100,000
                                           ---------
Total Payments                               $ 250,000  
                                           =========

NOTE 5      LOANS AND EXCHANGES                                                 

          Certain officers advanced the Company funds. Such advances bore no
         interest and had no definite repayment terms. At January 1, 1999,
           these advances amounted to $79,827. During 1999, $56,596 was repaid
           in cash and the difference of $23,231 was contributed to additional
          paid-in-capital. At March 31, 2000, advances amounted to $120,000,
which were subsequently repaid in April 2000.           

NOTE 6      CAPITAL STOCK                                                       

           Effective March 29, 1999, the Board of Directors declared a reverse
         stock split of one thousand shares of common stock for one common
            share of the Company's common stock. The effect of the reverse stock
         split was to reduce the total outstanding common shares to 7,972.
            All references to number of shares, except shares authorized, and to
           per share information in the consolidated financial statements have
            been adjusted to reflect the stock split on a retroactive basis, for
all periods presented.                                  

         The Company is currently authorized to issue 50,000,000 shares of
         its common stock, $.0001par value. As of December 31, 1999, there
      were 10,071,437 shares of common stock issued and outstanding.

       The Company has 5,000,000 authorized shares of preferred stock,
 $.0001 par value. The Company presently has no issued and
outstanding preferred stock.                            

    On March 30, 1999, the Company completed a private placement
         offering of 4,400,000 shares of its common stock for an aggregate
price of $44,000.                                       

          In July 1999, the Company issued 33,465 shares of its common stock
        to seven persons at $7.50 per share, in settlement of any claims
            such persons may have against the Company. The Company increased its
expenses and paid-in-capital by $250,988.               

         In August 1999, the Company issued 5,500,000 shares of its common
          stock, $.0001 par value, in exchange for all the outstanding stock
         of S&S Plus, Inc. The consolidated financial statements have been
           restated to reflect the effect of the acquisition of S&S Plus, Inc.

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 6      CAPITAL STOCK                                                       
(Continued)                                                                     

 On August 19, 1999, the Company purchased the domain name
      "www.Lessonstop.org", and its subscriber list, in exchange for
           20,000 shares of common stock, $.0001 par value per share at a fair
            market value of $7.75 per share for an aggregate amount of $155,000.
          The Company did not assume any liabilities or obligations relating
to the purchased assets.                                

       On August 31, 1999, the Company entered into a bridge financing
          agreement aggregating $500,000 (the "Note"), see Subsequent Events
      (Note 14). The note bears interest at 8% per annum, matures on
           January 19, 2000, and is secured by all assets and properties owned
          by the Company. Additionally, in consideration for such financing,
        the Company issued 100,000 shares of its $.0001 par value common
   stock of $10.0 per share. The Company recorded a $1,000,000
      commission expense in connection with the financing agreement.

         Additionally, in connection with the placement of such financing,
            the Company also paid a one-time fee of $50,000 to Robb Peck McCooey
            Clearing Corporation and issued 50,000 warrants at an exercise price
           of $.10 per share with a deemed fair market value of $25,500, which
expire December 31, 2004.                               

         In September 1999, the Company issued 10,000 shares of its common
       stock at $10.00 per share for consulting services rendered. The
      Company increased its expense and paid-in-capital by $100,000.

     During the six months ended June 30, 2000, the Company issued
          1,567,500 shares of common stock. Of such shares 910,000 were sold
      at $2.00 per share, aggregating $1,820,000. The balance of the
          common shares issued totaling 657,500 were issued for services and
           as additional consideration in connection with loan financings. The
            Company recorded a total of $2,521,406 in expenses from the issuance
of such shares.                                         

NOTE 7      FAIR VALUE OF FINANCIAL INSTRUMENTS                                 

            The following methods and assumptions were used to estimate the fair
value of financial instruments:                         

          Cash and Cash  Equivalents.  The carrying  amount  reported in the
          balance sheet for cash and cash equivalents  approximates its fair
value.                                                  

        Accounts Receivable and Accounts Payable. The carrying amount of
     accounts receivable and accounts payable in the balance sheet
approximates fair value.                                

           Short-Term and Long-Term Debt. The carrying amount of the revolving
            credit facility approximates fair value. The carrying amounts of the
         Company's financial instruments at December 31, 1999 and June 30,
           2000 approximate fair value with the exception of the interest rate
swap agreement.                                         

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 8      INCOME TAXES                                                        

           As of December 31, 1998 the Company has no available unused Federal
       and State net operating loss carry forwards that may be applied
           against future taxable income. Further, since S & S Plus, Inc was a
           sub chapter S Corporation prior to the reverse acquisition, the net
           operating losses are passed through to the former stockholders of S
        & S Plus, Inc., and therefore cannot be utilized by the Company.
     Accordingly, no deferred tax benefit has been recorded in the
consolidated statements of operations.                  

       As of December 31, 1999 the Company had $6,322,781 in available
           unused Federal and State net operating loss carry forwards that may
          be applied against future taxable income. These losses will expire
over a period of twenty years.                          

       The Company intends to follow Statement of Financial Accounting
        Standards No. 109 (SFAS 109), "Accounting for Income Taxes" when
         either operations achieve profitability or the realization of net
       operating loss benefits can more readily be measured, whichever
occurs first.                                           

NOTE 9      SECURED AND UNSECURED CREDITORS                                     

            The Company set up a provision of $132,033 for secured and unsecured
   creditors, in accordance with the filing of the bankruptcy.
        Ult-I-Med Health Centers, Inc., incurred this liability prior to
           December 31, 1996. The liability was satisfied in October 1999. The
current outstanding balance is zero.                    

NOTE 10     COMMITMENTS AND CONTINGENCIES                                       

        The Company entered into a five-year lease agreement with United
       Securities Services, Inc. The lease currently calls for monthly
            rental of $6,998 for approximately 4,533 square feet of office space
located in Lakewood, New Jersey.                        

       At December 31, 1999, the Company is committed to total minimum
     rental under all noncancellable operating leases of $200,355.
  Generally, these leases include additional charges for tax
            escalation and other expenses. The minimum future rental commitments
are payable at $42,180 per year for five years.         

            The Company entered into a three-year lease agreement on May 1, 2000
            with Cresskill Millennium Associates, LLC. The lease currently calls
            for monthly rental of $1,727 including maintenance for approximately
           1,275 square feet of office space located in Cresskill, New Jersey.

          At June 30, 2000, the Company is committed to total minimum rental
         under all noncancellable operating leases of $249,960. Generally,
            these leases include additional charges for tax escalation and other
      expenses. The minimum future rental commitments are payable at
$61,305 per year for five years.                        

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 11     WARRANTS                                                            

    As of December 31 1999, warrants consisted of the following:

               WARRANTS           EXERCISE           DATE OF
               OUTSTANDING           PRICE          EXPIRATION
               -----------           -----          ----------

                       450,000            $1.0       December 31, 2004
                       590,000            $3.0       December 31, 2004
                     1,050,000            $5.0       December 31, 2004
                       350,000            $7.0       December 31, 2004
                       350,000             $10       December 31, 2004
                        50,000            $.10       December 31, 2004
---------                   
Total         2,840,000                                 
=========                   

            As of December 31, 1999, no warrants have been exercised. All of the
           outstanding warrants are restricted subject to Rule 144 of the act.

           The Company has elected to follow APB No. 25, "Accounting for Stock
  Issued to Employees" to account for warrants issued to its
   employees. Under APB No. 25, when the exercise price of the
         Company's warrants issued to its employees are less than the fair
          value price of the underlying stock at the date of the grant, than
       compensation will be recognized by the Company. The Company had
            granted 450,000 warrants to certain key employees at exercise prices
            that were below the fair value of the underlying stock. Accordingly,
         the Company recorded stock-based compensation of $900,000 for the
          year ended December 31, 1999 based upon the intrinsic value of the
         options at the grant date. No stock warrants were issued in 1998.

           Pro forma information regarding earnings (loss) per common share is
            required by SFAS #123, and has been determined as if the Company had
      accounted for its warrants under the fair value method of that
       statement. In 1999, the fair market value of these warrants was
         estimated at the date of the grant using the Black-Scholes Option
         Pricing Model with the following weighted average assumptions for
    1999: risk-free interest rate of 6.5%; dividend yield of 0%;
        volatility factor for the expected market price of the Company's
           common stock of 54.31%; and a weighted average expected life of the
option of four years.                                   

       The Black-Scholes Option Pricing Model was developed for use in
        estimating the fair value of traded options. In addition, option
           valuation models require the input of highly subjective assumptions
           included the expected stock price volatility. Because the Company's
            stock options have characteristics significantly different for those
      of traded options, and because changes in the subjective input
     assumptions can materially affect the fair value estimate, in
            management's opinion, the existing models do not necessarily provide
         a reliable single measure of the fair value of its stock options.
    During the year ended December 31, 1999 the Company recorded
    $900,900 in stock-based compensation on the 990,000 warrants
outstanding issued to consultants.                      

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 11     WARRANTS                                                            
(Continued)                                                                     

          In accordance with the provision of SFAS #123, the Company applies
      APB No. 25 and related interpretations in accounting for stock
    warrants issued to its employees, and, accordingly, does not
        recognize compensation costs for warrants with an exercise price
       greater then the fair value of common shares at the time of the
            grant. However, if the Company had elected to recognize compensation
           costs based on the fair value of the warrants granted at grant date
           as prescribed by SFAS #123, net income and earnings per share would
         have been reduced to the pro forma amounts indicated in the table
below.                                                  

                                           1999                 1998
                                           ----                 ----
          Net Loss - as reported         $ (4,525,603)        $  (322,351)
          Net Loss - pro forma           $ (5,834,603)        $  (322,351)
          Loss Per Share - as reported   $       (.48)        $      (.54)
          Loss Per Share - pro forma     $       (.61)        $      (.54)

        The fair value of each warrant is estimated on the date of grant
       using the Black-Scholes option-pricing model with the following
assumptions:                                            

         Expected dividend yield                                    0.0%
         Expected stock price volatility                          54.31%
         Risk free interest rate                                    6.5%

 The expected life of the options is 4 years, and they are
   immediately exercisable upon issuance without restrictions.

         The weighted average fair value of options granted during 1999 is
$5.22 per share.                                        

 As of June 30, 2000, warrants consisted of the following:

                 WARRANTS             EXERCISE           DATE OF
                 OUTSTANDING             PRICE          EXPIRATION
                 -----------             -----          ----------

                       1,850,000             $1.00       December 31, 2004
                       1,190,000             $3.00       December 31, 2004
                         965,000             $4.00       December 31, 2004
                       1,375,000             $5.00       December 31, 2004
                         650,000             $7.00       December 31, 2004
                         250,000             $9.00       December 31, 2004
                         425,000            $10.00       December 31, 2004
                          50,000             $ .10       December 31, 2004
                         100,000            $14.63          March 31, 2003
                         300,000            $12.00       December 31, 2004
---------                   
Total         7,155,000                                 
=========                   

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 11     WARRANTS                                                            
(Continued)                                                                     

        As of June 30, 2000, no warrants have been exercised. All of the
           outstanding warrants are restricted subject to Rule 144 of the act.

           The Company has elected to follow APB No. 25, "Accounting for Stock
  Issued to Employees" to account for warrants issued to its
   employees. Under APB No. 25, when the exercise price of the
         Company's warrants issued to its employees are less than the fair
          value price of the underlying stock at the date of the grant, than
      compensation will be recognized by the Company. During the six
     months ended June 30, 2000, the Company granted an additional
      400,000 warrants to certain employees. Of the 400,000 warrants
           granted, 200,000 were at exercise price below the fair market value
  of the underlying stock. Accordingly, the Company recorded
            stock-based compensation of $1,550,000 for the six months ended June
            30, 2000, based upon the intrinsic value of the options at the grant
date and stock issued for services.                     

           Pro forma information regarding earnings (loss) per common share is
            required by SFAS #123, and has been determined as if the Company had
      accounted for its warrants under the fair value method of that
       statement. In 1999, the fair market value of these warrants was
         estimated at the date of the grant using the Black-Scholes Option
         Pricing Model with the following weighted average assumptions for
    1999: risk-free interest rate of 6.5%; dividend yield of 0%;
        volatility factor for the expected market price of the Company's
          common stock of 81.2%; and a weighted average expected life of the
option of four years.                                   

       The Black-Scholes Option Pricing Model was developed for use in
        estimating the fair value of traded options. In addition, option
           valuation models require the input of highly subjective assumptions
            including the expected stock price volatility. Because the Company's
            stock options have characteristics significantly different for those
      of traded options, and because changes in the subjective input
     assumptions can materially affect the fair value estimate, in
            management's opinion, the existing models do not necessarily provide
         a reliable single measure of the fair value of its stock options.

     The Company recorded $952,000 at June 30, 2000 in stock based
     compensation and $488,000 in interest in connection with debt
  financing on an aggregate of 3,815,0000 warrants issues to
consultants.                                            

          In accordance with the provision of SFAS #123, the Company applies
      APB No. 25 and related interpretations in accounting for stock
    warrants issued to its employees, and, accordingly, does not
        recognize compensation costs for warrants with an exercise price
       greater then the fair value of common shares at the time of the
grant.                                                  

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

NOTE 11     WARRANTS                                                            
(Continued)                                                                     

           However, if the Company had elected to recognize compensation costs
        based on the fair value of the warrants granted at grant date as
        prescribed by SFAS #123, net income and earnings per share would
         have been reduced to the pro forma amounts indicated in the table
below.                                                  

                                            June 30,
                                           2000                 1999
                                           ----                 ----

           Net Loss - as reported         $ (9,257,177)        $ (133,883)
           Net Loss - pro forma           $(11,357,372)        $ (133,883)
           Loss Per Share - as reported   $       (.85)        $     (.02)
           Loss Per Share - pro forma     $       (.71)        $     (.02)

        The fair value of each warrant is estimated on the date of grant
       using the Black-Scholes option-pricing model with the following
assumptions:                                            

          Expected dividend yield                                   0.0%
          Expected stock price volatility                          81.2%
          Risk free interest rate                                   6.5%

 The expected life of the options is 4 years, and they are
   immediately exercisable upon issuance without restrictions.

          The weighted average fair value of options granted during 1999 and
2000 is $5.22 and $4.51 per share, respectively.        

NOTE 12     FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISKS                  

           The Company maintained approximately $472,720 in one bank in excess
            of amounts that would be insured by the Federal Depository Insurance
          Corporation. Management of the Company feels that the bank is well
capitalized under FDIC guidelines.                      

NOTE 13     SUBSEQUENT EVENTS                                                   

      In July 2000, the Company received $1,500,000 from the sale of
           750,000 shares of its common stock at $2.00 per share. The proceeds
        were used to partially payoff $775,000 of the notes outstanding.

        In July 2000, the Company cancelled 3,450,000 warrants issued at
           various prices to employees and related parties in exchange for the
       issuance of 5,840,000 warrants at an exercise price of $.10 per
share.                                                  

         In August 2000, the Company issued a $400,000 promissory note. As
           consideration for such loan, the Company also issued 400,000 shares
of the Company's Common Stock.                          

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 YOUTHLINE USA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1999 (AUDITED) AND
 JUNE 30, 2000 (UNAUDITED)

           In September 2000 the Company issued a $500,000 promissory note. As
           consideration for such loan, the Company also issued 500,000 shares
       of the Company's Common Stock. Additionally, the Company issued
            $4,000,000 of convertible notes. As consideration for the financing,
            the Company issued 1,500,000 shares of Common Stock. These notes are
          convertible at a minimum of $.70 per share of Common Stock, or 75%
            of the average closing bid price. In connection with this financing,
          the Company issued 250,000 shares of Common Stock as a commission.

            The Company issued 6,437,000 shares of Common Stock to employees and
 consultants from July 1, 2000 through September 30, 2000.

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--------------------------------------------------------------------------------

        YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.   
THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE  
INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON THE DATE OF THIS DOCUMENT. 

    ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN OR THAT ARE
CURRENTLY DEEMED IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. THE RISKS  
AND UNCERTAINTIES DESCRIBED IN THIS DOCUMENT AND OTHER RISKS AND UNCERTAINTIES  
WHICH WE MAY FACE IN THE FUTURE WILL HAVE A GREATER IMPACT ON THOSE WHO PURCHASE
OUR COMMON STOCK. THESE PURCHASERS WILL PURCHASE OUR COMMON STOCK AT THE MARKET 
PRICE OR AT A PRIVATELY NEGOTIATED PRICE AND WILL RUN THE RISK OF LOSING THEIR  
ENTIRE INVESTMENT.                                                              

YouthlineUSA, INC.

DISTRIBUTION OF 58,109,768 SHARES OF
COMMON STOCK

----------------
PROSPECTUS
----------------

 ___________, 2000

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 PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24.  INDEMNIFICATION OF DIRECTORS AND OFFICERS                             

 Section 145 of the Delaware General Corporation Law (the "GCL")
empowers a corporation to indemnify its directors and officers and to purchase  
insurance with respect to liability arising out of the performance of their     
duties as directors and officers. The GCL provides further that the             
indemnification permitted thereunder shall not be deemed exclusive of any other 
rights to which the directors and officers may be entitled under the            
corporation's by-laws, any agreement, vote of stockholders or otherwise.        

  Article Ninth of our Certificate of Incorporation eliminates the
personal liability of directors to the fullest extent permitted by Section 102  
of the GCL. Article Tenth provides for indemnification of all persons whom it   
shall have the power to indemnify pursuant to Section 145 of the GCL.           

       The effect of the foregoing is to require Youthline USA to the extent
permitted by law to indemnify the officers and directors of Youthline USA for   
any claim arising against such persons in their official capacities if such     
person acted in good faith and in a manner that he reasonably believed to be in 
or not opposed to the best interests of the corporation, and, with respect to   
any criminal action or proceeding, had no reasonable cause to believe his       
conduct was unlawful. Insofar as indemnification for liabilities arising under  
the Securities Act may be permitted to directors, officers or persons           
controlling Youthline USA pursuant to the foregoing provisions, we have been    
informed that in the opinion of the Commission, such indemnification is against 
public policy as expressed in the Securities Act and is therefore unenforceable.

   We do not currently have any liability insurance coverage for its
officers and directors.                                                         

Item 25.  Other Expenses of Issuance and Distribution                           

      The following table sets forth the costs and expenses payable by the
registrant in connection with the sale of the securities being registered. All  
amounts are estimates except the SEC registration fee:                          

      SEC registration fee......................................$ 6,649.63
   Printing and engraving expenses...........................$ 1,500
   Accounting fees and expenses..............................$10,000
   Attorneys' fees and expenses..............................$40,000
   Transfer agent's fees and expenses........................$ 1,000
      Miscellaneous.............................................$   850.37

            Total............................................$60,000

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ITEM 26.  RECENT SALES OF UNREGISTERED SECURITIES.                              

    Set forth below is information regarding the issuance and sales of
YouthlineUSA's common stock without registration during the last three years.   
Other than as set forth below, no such sales involved the use of an underwriter 
and no commissions were paid in connection with the sale of any securities.     

      During the third quarter ended September 30, 2000, we issued
6,437,000 shares of common stock to employees and consultants, pursuant to      
Section 4(2) of the Act.                                                        

      During the third quarter ended September 30, 2000, we issued
900,000 shares to two lenders, as additional consideration in connection with   
loans in the aggregate amount of $900,000, pursuant to Section 4(2) of the Act. 

      During the third quarter ended September 30, 2000, we issued
750,000 shares of common stock, at $2.00 per share, to an accredited investor   
pursuant to Section 4(2) of the Act. We paid $75,000 in commissions in          
connection with such transaction.                                               

      During the third quarter ended September 30, 2000, we issued
1,500,000 shares to two lenders, as additional consideration in connection with 
loans in the aggregate amount of $4,000,000, pursuant to Section 4(2) of the    
Act. We paid $300,000 and issued 250,000 shares as commissions in such          
transaction.                                                                    

         During the third quarter ended September 30, 2000, we issued an
aggregate of 13,185 shares of common stock upon cashless exercise of certain    
outstanding warrants, pursuant to Section 3(a)(9) of the Act.                   

          During the second quarter ended June 30, 2000, we issued 407,500
shares of common stock to employees and consultants, pursuant to Section 4(2) of
the Act.                                                                        

          During the second quarter ended June 30, 2000, we issued 250,000
shares of common stock to a lender, as additional consideration in connection   
with a loan in the amount of $550,000, pursuant to Section 4(2) of the Act.     

          During the second quarter ended June 30, 2000, we issued 910,000
shares of common stock, at $2.00 per share, to accredited investors, pursuant to
Section 4(2) of the Act. We paid $91,000 in commissions in connection with such 
transactions.                                                                   

         In September 1999, we issued 10,000 shares of common stock to a
consultant for services rendered. The sale was made in reliance upon Section    
4(2) of the Act.                                                                

     In connection with a $500,000 bridge financing in September 1999 in
which we issued promissory notes in the aggregate amount of $500,000, we issued,
for no additional consideration, 100,000 shares of common stock to nine (9)     
accredited investors. The sales were made in reliance upon Rule 506 of          
Regulation D under the Act. We paid commissions of 9% to the placement agent of 
the financing.                                                                  

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        In connection with the acquisition of all of the outstanding shares of
S&S Plus, Inc. (a wholly-owned subsidiary of Youthline USA) in August 1999, we  
issued 5,500,000 shares of common stock to the shareholders of S&S. The sale was
made in reliance upon Section 4(2) of the Act.                                  

      In connection with the acquisition of Lesson Stop in August 1999, we
issued 20,000 shares of common stock to an employee of Youthline USA. The sale  
was made in reliance upon Section 4(2) of the Act.                              

        In July 1999, we issued 33,465 shares of common stock to seven persons
in settlement of any claims such persons may have had against us. The sales were
made in reliance upon Section 4(2) of the Act.                                  

        In March 1999, we sold 4,400,000 shares of common stock to eleven (11)
accredited investors for an aggregate purchase price of $44,000. The sales were 
made in reliance upon Rule 504 of Regulation D under the Act.                   

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ITEM 27.  EXHIBITS                                                              

Exhibit                                                                         
Number         Name                                                             
------         ----                                                             

3.1            Certificate of Incorporation*                                    
3.2            Certificate of Merger (Delaware)*                                
3.3            Articles of Merger (Utah)*                                       
3.4            Plan of Merger*                                                  
3.5            Bylaws *                                                         
5.1            Opinion of Berlack, Israels & Liberman LLP**                     
10.1           Employment Agreement between the Company and Saki Dodelson*      
10.2           Employment Agreement between the Company and Susan Gertler*      
10.3           Bridge Loan Financing Agreement**                                
21.1           Subsidiaries of Youthline USA**                                  
23.1           Consent of Michael C. Finkelstein & Co., independent certified   
public accountants                                
23.2           Consent of Counsel (see Exhibit 5.1)                             
27.1           Financial Data Schedule                                          

*    Incorporate by reference to the exhibits to the Company's Registration     
Statement on Form 10-SB (File No. 0-28725)                                      

**   To be filed by amendment.                                                  

ITEM 28.  UNDERTAKINGS.                                                         

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:

                 (a) To include any prospectus required by section 10(a)(3) of
Securities Act.                                         

                (b) To reflect in the prospectus any facts or events arising
           after the effective date of the registration statement (or the most
          recent post-effective amendment thereof) which, individually or in
            the aggregate, represent a fundamental change in the information set
           forth 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 commission pursuant to Rule 424(B) if, in
        the aggregate, the changes in volume and price represent no more
            than 20% change in the maximum aggregate offering price set forth in
    the "Calculation of Registration Fee" table in the effective
registration statement; and                             

               (c) To include any material information with respect to the
         plan of distribution not previously disclosed in the registration
   statement or any material change to such information in the
registration statement                                  

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                (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) That, for purposes of determining any liability under the
        Securities Act, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Exchange Act that is 
         incorporated by reference in the registration statement 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.          

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SIGNATURES

        Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the       
undersigned, thereunto duly authorized, in the County of New York, State of New 
York, on October 12, 2000.                                                      

                        YouthlineUSA, INC.

                           By: /s/ SAKI DODELSON
                                               ---------------------------------
                                  Name:  Saki Dodelson
                                          Title: President, Treasurer,
                                                Principal Executive/
                                                    Financial and Accounting
                                                Officer and Director

       Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the 
dates indicated.                                                                

                                                        [Enlarge/Download Table]


Name                                           Title                        Date      
----                                           -----                        ----      
                                                                                      
/s/ JACOB Y. "ROCKY" STEFANSKY    Chairman of the Board of Directors  October 12, 2000
--------------------------------                                                      
Jacob Y. "Rocky" Stefansky                                                            

/s/ SAKI DODELSON                 President, Treasurer, Principal     October 12, 2000
--------------------------------  Executive/Financial and Accounting                  
Saki Dodelson                     Officer and Director                                

/s/ SUSAN GERTLER                 Vice President                      October 12, 2000
--------------------------------                                                      
Susan Gertler                                                                         

/s/ EMANUEL YARMISH               Director                            October 12, 2000
--------------------------------                                                      
Emanuel Yarmish                                                                       

/s/ LOUIS LIBIN                   Director                            October 12, 2000
--------------------------------                                                      
Louis Libin                                                                           

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Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This SB-2 Filing		Date		First		Last			Other Filings
		12/31/96		77
		1/7/97		71
		12/31/97		50		51
		2/1/98		73
		12/31/98		9		77
		1/1/99		75
		3/29/99		75
		3/30/99		75
		5/28/99		72
		6/30/99		47		72
		7/27/99		6		68
		8/16/99		6		68
		8/19/99		76
		8/31/99		73		76
		9/24/99		47		69
		9/30/99		56
		10/11/99		69
		12/14/99		73
		12/21/99		73
		12/31/99		8		82			10KSB
		1/19/00		73		76
		2/22/00		61
		3/31/00		51		75			10QSB, NT 10-Q
		4/10/00		74
		5/1/00		77
		5/17/00		74
		6/30/00		8		85			10QSB, NT 10-Q
		7/1/00		82
		7/10/00		74
		8/15/00		62
		9/15/00		30
		9/22/00		28		30
		9/30/00		7		85			10QSB, NT 10-Q
		10/10/00		2		56
		10/11/00		2		28
		10/12/00		89
Filed On / Filed As Of		10/13/00		1		3
		10/17/00		74
		12/14/00		73
		12/21/00		73
		12/31/00		8					NT 10-K
		1/1/01		57		72
		3/22/01		28
		9/22/01		28
		9/15/02		30
		3/31/03		28		79
		4/30/03		46
		9/15/03		30
		10/31/04		46
		12/31/04		26		79
		12/31/05		58
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