XFormity Technologies/Inc · 424B3 · On 11/15/00

Filed On 11/15/00 4:43pm ET   ·   SEC File 333-37802   ·   Accession Number 1011034-0-128

Prospectus   ·   Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus                                            73±   234K 

Document Table of Contents

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Filed Pursuant to Rule 424(b)(3)  

Relating to Registration Statement No. 333-37802  

Prospectus  

XML - GLOBAL TECHNOLOGIES, INC. 

24,335,000 Shares Common Stock  

This is an offering of shares of the common stock of XML - Global     
Technologies, Inc. by persons who were issued shares of our common stock or     
warrants or options to purchase our common stock in private offerings.          
Selling Securityholders holding warrants or options may sell the common stock   
covered by this Prospectus when they have exercised their warrants or options   
to purchase common stock.                                                       

 Prior to this offering, there has been no public trading market for our
common stock.                                                                   

Investing in our common stock involves a high     
degree of risk.  You should read the "Risk        
Factors" beginning on Page 4.                     

Neither the Securities and Exchange Commission nor any state securities         
commission has approved or disapproved of these securities or determined if     
this Prospectus is truthful or complete.  Any representation to the contrary    
is a criminal offense.                                                          

The Date of This Prospectus is November 13, 2000. 

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Prospectus Summary  

About our Company 

We, together with our subsidiaries, are positioning ourselves to take           
advantage of what we believe is one of the most significant trends in business  
today: the adoption of a complete, e-business strategy using XML (eXtensible    
Markup Language) by global businesses. XML is a markup language that is able    
to add structure, intelligence and content identification to information on     
the Internet or intranets.  By being able to attract and retain persons who     
are at the forefront of XML technology, we have been able to identify and       
develop several commercial products and services that will enable us to         
exploit the XML opportunities.  Our primary objective is to assist businesses   
in their effort to migrate from existing HTML and EDI (Electronic Data          
Interchange) standards to XML.  There is an emerging market for XML-based       
tools such as our search engine and other e-commerce products which will be     
targeted and served by our XML specialists.                                     

Our executive offices are located at 1818 Cornwall Avenue, Suite 9, Vancouver,  
British Columbia V6J 1C7 Canada.  Our telephone number is (800) 201-1848.  Our  
Internet Website address is http://www.xmlglobal.com.                           

About the Offering  

This is an offering of shares of our common stock by Selling Securityholders    
who were issued shares of our common stock and/or warrants or options to        
purchase our common stock.  Selling Securityholders who were issued warrants    
or options may sell the shares of common stock covered by this prospectus when  
they have exercised their warrants or options to purchase common stock.  We     
will nor receive any proceeds from the resale of common stock by the Selling    
Shareholders.  The Selling Securityholders are offering 14,605,000 shares of    
common stock which they already own and an additional 9,730,000 shares of       
common stock that may be acquired by them upon exercise of warrants and         
options which they currently hold.  We are registering the common stock         
covered by this Prospectus in order to fulfill the obligations we have under    
agreements with the Selling Securityholders.                                    

Shares Outstanding Before Offering:          27,505,000     

Shares Outstanding After Offering:           37,235,000     

Shares Offered by Selling Securityholders:   24,335,000     

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Summary Financial Data  

As we have only been in operation for a brief period of time, our historical    
operating information may not be indicative of our future operating results.    

                                                                [Download Table]


Statement of Operations Data:      Fiscal Year Ended  Period Ended
                                     June 30, 2000   June 30, 1999
                                                                  

            Total Revenues           $   53,185        $    2,137 

            Operating expenses        1,713,378           122,986 
            Net loss                 (1,573,241)         (120,849)
            Net loss applicable to                                
               common stockholders   (1,573,241)         (120,849)
            Basic and diluted loss                                
               per share                  (0.07)            (0.01)
            Shares used                                           
               in computing                                       
               basic and diluted                                  
               loss per share        21,205,800        17,500,000 


                                At June 30, 2000  At June 30, 1999
                                ----------------  ----------------
                                                                  
Balance Sheet Data                                                
            Working capital                                       
               (deficit)             $8,158,004        $ (173,092)
            Total assets             10,082,007            88,052 
            Stockholders' equity                                  
               (deficit)              9,978,830          (111,020)


________________                                                                

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Risk Factors  

An investment in our securities is speculative and involves a high degree of    
risk.  Please carefully consider the following risk factors, as well as the     
possibility of the loss of your entire investment, before deciding to invest    
in our securities.                                                              

We are an early stage company, we have a history of losses, and we expect       
future losses                                                                   

We have never been profitable, we expect to incur net losses for the  
foreseeable future and we may never be profitable.  We incurred net losses of   
$1,573,241 and $120,849 for the fiscal years ended June 30, 2000 and period     
ended June 30, 1999.  As of June 30, 2000, we had an accumulated deficit of     
$1,694,090.                                                                     

We have only recently introduced our new products and services.  As a 
result of our limited operating history it is difficult to forecast our future  
operating results.  We expect to substantially increase our sales and           
marketing, product development and general administrative expenses.  As a       
result, we will need to generate significant revenues to achieve and maintain   
profitability in the future.  Our future operating results will depend on many  
factors, including:                                                             

*    The overall growth rate for the markets in which we compete      

   *    The level of market acceptance of, and demand for, XML technology in
general and our XML products in particular                  

*    The level of product and price competition                       

 *    Our ability to attract, train and retain consulting, technical and
other key personnel                                         

If the market's acceptance and adoption of XML technologies does not develop,   
our future results may suffer                                                   

 All of our products are based upon and rely solely upon XML technology,
which has only recently been commercially introduced.  While we believe XML     
has demonstrated clear advantages over HTML platforms in defining the content   
of a document, the vast majority of e-commerce still uses HTML.  To date,       
there has not been widespread adoption of XML technology, products or           
applications.  Moreover, there may exist resistance among users of Internet     
and intranet e-commerce to transition from HTML to XML.  Conversely, new        
entrants into e-commerce may be slow to adopt XML in the absence of widespread  
acceptance of standards to insure compatibility.  As a result, numerous         
factors, many of which are not in our control, may slow the development of      
market adoption for XML technology and as a result, our products and services.  

   We cannot be sure that XML technology will be adopted as a standard, that
XML based products will achieve broad market acceptance, that our XML products  
will be accepted or that other superior technologies will not be developed.     
The failure of XML technology to become a standard or the failure of our XML    
products to achieve broad acceptance could adversely affect our ability to      
generate revenues.  The XML technology is one of several competing              
technologies used in information exchange and Internet commerce.                

Lack of growth or decline in Internet usage or the lack of acceptance of        
commerce conducted via the Internet could be detrimental to our future          
operating results                                                               

   Our products enhance a company's ability to transact business and conduct
operations utilizing the Internet.  Therefore, our future sales and any future  
profits are substantially dependent upon the widespread acceptance and use of   
the Internet as an effective medium of commerce by consumers and businesses.    
Rapid growth in the use of the Internet and other online services is a recent   
development, and we are unsure whether that acceptance and use will continue    
to develop, or that a sufficiently broad base of consumers will adopt and       
continue to use the Internet and other online services as a medium of           
commerce.  To be successful, we must rely on consumers and businesses, which    
have historically used traditional means of commerce to purchase products,      
accepting and utilizing new ways of conducting business and exchanging          
information over the Internet.                                                  

In addition, the Internet may not be accepted as a viable commercial  
marketplace for a number of reasons, including potentially inadequate           
development of the necessary network infrastructure or delayed development of   
enabling technologies and web performance improvements.  If the Internet        
continues to experience significant growth in the number of users, frequency    
of use or an increase in bandwidth requirements, the Internet's infrastructure  
may not be able to support the demands placed upon it.  In addition, the        
Internet could lose its viability due to delays in the development or adoption  
of new standards and protocols required to handle increased levels of Internet  
activity, or due to increased governmental regulation.  If Congress, or other   
governing bodies within and outside the United States, decide to alter          
materially the current approach to, and level of, regulation of the Internet,   
we may need to adapt our technology.  Any required adaptation could cause us    
to spend significant amounts of time and money.  If use of the Internet does    
not continue to grow or grows more slowly than expected, if the infrastructure  
for the Internet does not effectively support growth that may occur, if         
government regulations change, or if the Internet does not become a viable      
commercial marketplace, our business will likely suffer.                        

Intense competition and increasing consolidation in our industry could create   
stronger competitors and harm our business                                      

  The market for our products is intensely competitive, highly fragmented,
characterized by rapid technological change and significantly affected by new   
product introductions.  Recent acquisitions of several competitors by large     
software companies and other market activities of industry participants have    
increased the competition in our market.  Our competitors consist of a number   
of private and public companies, including, among others, Sequoia Software,     
which markets an XML search engine called Xdex for intranet use; Inktomi,       
which has already established relationships with companies such as America      
Online, British Telecommunications, Cnet, Excite@Home, Intel, Microsoft, Sun    
Microsystems and Yahoo, each of which uses XML for various purposes;            
Ultraseek, a division of Go.com (a Disney company) whose customers include Sun  
Microsystems, 3Com, Ericsson and others; and IBM, which has modified an         
existing HTML search tool to accommodate XML documents.  In addition, we face   
competition from in-house software developers who may develop some or all of    
the functionality that our products provide.  Many of our competitors have      
longer operating histories, significantly greater financial, technical,         
marketing and other resources, greater name recognition, a broader range of     
products to offer and a larger installed base of customers, any of which        
factors could provide them with a significant competitive advantage.            

If we fail to develop strategic relationships with industry partners, our       
efforts to license our product may be unsuccessful                              

   At the present time, we lack an existing installed customer base to which
our innovative products and services can be offered.  As a result, we will      
need to establish critical strategic relationships with industry partners who   
have large installed customer bases to whom we can offer licenses to our        
products, which may be combined or bundled, with their own software. If we are  
not successful in establishing these relationships, it will be more difficult   
for us to be successful in our efforts to achieve a large customer base for     
our products.                                                                   

In order for our business to be successful, it will be necessary to convince    
businesses to adopt a new technology and platform                               

As we do not have an existing customer base, our success will be      
dependent upon our ability to convince business to business e-commerce users    
to adopt XML technology.  Many business to business e-commerce users already    
have long term customer agreements with our e-commerce competitors with whom    
we may be unable to establish a strategic partnership.  Businesses that have    
made substantial up-front payments to our competitors for electronic commerce   
solutions may be reluctant to replace their current solution and adopt our      
solution.  As a result, our efforts to create a larger customer base may be     
more difficult than expected even if we are deemed to offer products and        
services superior to those of our competitors.  In addition, because the        
business to business e-commerce market is new and underdeveloped, potential     
customers in this market may be confused or uncertain about the relative        
merits of each electronic commerce solution or which electronic commerce        
solution to adopt, if any.  Confusion and uncertainty in the marketplace may    
inhibit customers from adopting our solution.                                   

If we fail to develop new products and services in the face of our industry's   
rapidly evolving technology, our future results may be adversely affected       

Due to the recent emergence of the Internet and the Web as a forum for
conducting business, the market for Web application server systems in which we  
participate is subject to rapid technological change, changing customer needs,  
frequent new product introductions and evolving industry standards that may     
render existing products and services obsolete.  Our growth and future          
operating results will depend in part upon our ability to enhance existing      
applications and develop and introduce new applications or components that:     

*    meet or exceed technological advances in the marketplace         
*    meet changing customer requirements                              
*    achieve market acceptance                                        
  *    integrate successfully with third party software and platforms, and
*    respond to competitive products.                                 

Our product development and testing efforts have required, and we are 
expected to continue to require, substantial investment.  We may not possess    
sufficient resources to continue to make the necessary investments in           
technology.                                                                     

We will continue to need significant capital, without which our business may    
fail                                                                            

  We have required significant capital to date and will require additional
capital to implement our business plan.  We are currently generating only       
nominal operating revenues.  We have no current arrangements with respect to    
other sources of additional financing and there can be no assurance that        
additional financing will be available to us on commercially reasonable terms,  
or at all.  None of the Selling Securityholders have committed or are           
obligated to exercise any of the options or warrants that they hold.  As a      
result, we cannot be sure that we will generate any additional working capital  
through the exercise of options or warrants.  The inability to obtain           
additional financing, when needed, would have a material adverse affect on us,  
including possibly requiring us to curtail or cease our operations.  To the     
extent that future financing involves the sale of our equity securities, our    
then existing stockholders, including investors in this offering, could be      
substantially diluted.                                                          

We need to manage our growth effectively or we may not succeed                  

 We are a growing company.  Our ability to manage our growth will depend
in large part on our ability to generally improve and expand our operational    
and sales and marketing capabilities, to develop the management skills that     
our managers and supervisors, many of whom have been employed by us for a       
relatively short time, and to train, motivate and manage both our existing      
employees and the additional employees that may be required.  Additionally, we  
may not adequately anticipate all the demands that growth may impose on our     
systems, procedures and structure.  Any failure to adequately anticipate and    
respond to these demands or manage our growth effectively would have a          
material adverse affect on our future prospects.                                

Security risks of electronic commerce may deter future use of our products and  
services                                                                        

   A fundamental requirement to conduct Internet based, business to business
electronic commerce is the secure transmission of confidential information      
over public networks.  Failure to prevent security breaches in the              
marketplaces, or well-publicized security breaches affecting the Web in         
general, could significantly harm our business, operating results and           
financial condition.  We cannot be certain that advances in computer            
capabilities, new discoveries in the field of cryptography, or other            
developments will not result in a compromise or breach of the algorithms we     
use to protect content and transactions or proprietary information in our       
databases.  Anyone who is able to circumvent our security measures could        
misappropriate proprietary, confidential customer information or cause          
interruptions in our operations.  We may be required to incur significant       
costs to protect against security breaches or to alleviate problems caused by   
breaches.                                                                       

If we lose our key personnel or fail to attract and retain additional           
personnel, the success and growth of our business may suffer                    

A significant portion of our management team has been in place for a  
relatively short period of time.  We do not have written employment agreements  
with any of our key personnel.  We only have a limited consulting arrangement   
with Mr. David Webber, the chief technology leader of the expressXCHG product.  
Our future success will also depend significantly on our ability to attract,    
integrate and retain highly skilled technical personnel who are active and      
highly regarded in the XML community.  As XML technology is relatively new,     
the degree to which it is accepted and absorbed in the marketplace is           
dependent, in part, upon assembling technology personnel who have the           
credibility and skills to successfully promote acceptance of our products.  If  
we are unable to attract, integrate and retain such persons, our business       
could be adversely affected.  Our chief technology officer, Duane Nickull, is   
internationally recognized as a leading innovator in the field of XML           
technology.  While we maintain a key man life insurance policy on him in the    
amount of $1,000,000, if we were to lose his services it would have a material  
adverse effect upon our competitive position in the industry.                   

The failure to implement successfully our web software and XML search engine    
could result in dissatisfied customers and limited sales                        

Implementation of our Web software and XML search engine involves a   
significant commitment of financial and other resources by our customers.  The  
customer's implementation cycle can be lengthy due to the size and complexity   
of their systems and operations.  In addition, our customers will rely heavily  
on third party systems integrators to assist them with the installation and     
use of our products.  Our failure or the failure of our alliance partners, our  
customers or our third party integrators to implement successfully our          
products could result in dissatisfied customers which could adversely affect    
our reputation.                                                                 

Capacity restrictions of our XML-based products could reduce the demand and     
utility for our products                                                        

  Concurrency restrictions can limit Internet deployment and use capacity.
The boundaries of our XML capacity, in terms of numbers of concurrent users or  
interactions, are unknown because, to date, no customer or testing environment  
has reached these boundaries.  The XML capacity boundaries may, at some future  
time, be reached and, when reached, may be insufficient to enable our           
customers to achieve their desired levels of information deployment and         
exchange.  We may lose customers or fail to gain new customers if either of     
these occurs.                                                                   

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Certain Market Information  

   There currently exists no public trading market for our common stock, and
there can be no assurance that a public trading market will develop or be       
sustained in the future.  Without an active public trading market, there can    
be no assurances that you will be able to liquidate your investment without     
considerable delay, if at all.  If a market does develop, the price for our     
securities may be highly volatile and may bear no relationship to our actual    
financial condition or results of operations.  Factors we discuss in this       
prospectus, including the many risks associated with an investment in us, may   
have a significant impact on the market price of our common stock.  Also,       
because of the relatively low price of our common stock, many brokerage firms   
may not effect transactions in the common stock.                                

  In addition, it is likely that our common stock will be subject to rules
adopted by the Commission regulating broker dealer practices in connection      
with transactions in "penny stocks."  Those disclosure rules applicable to      
"penny stocks" require a broker dealer, prior to a transaction in a "penny      
stock" not otherwise exempt from the rules, to deliver a standardized list      
disclosure document prepared by the Commission.  That disclosure document       
advises an investor that investment in "penny stocks" can be very risky and     
that the investor's salesperson or broker is not an impartial advisor but       
rather paid to sell the shares.  The disclosure contains further warnings for   
the investor to exercise caution in connection with an investment in "penny     
stocks," to independently investigate the security, as well as the salesperson  
with whom the investor is working and to understand the risky nature of an      
investment in this security.  The broker dealer must also provide the customer  
with certain other information and must make a special written determination    
that the "penny stock" is a suitable investment for the purchaser and receive   
the purchaser's written agreement to the transaction.  Further, the rules       
require that, following the proposed transaction, the broker provide the        
customer with monthly account statements containing market information about    
the prices of the securities.                                                   

 These disclosure requirements may have the effect of reducing the level
of trading activity in the secondary market for our common stock.  Many         
brokers may be unwilling to engage in transactions in our common stock because  
of the added disclosure requirements, thereby making it more difficult for      
stockholders to dispose of their shares.                                        

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Forward-looking Statements  

In General                                                                      

This prospectus contains statements that plan for or anticipate the   
future.  Forward-looking statements include statements about the future of the  
software development, computer-based project management, consulting and         
strategic business consulting industries, statements about our future business  
plans and strategies, and most other statements that are not historical in      
nature.  In this prospectus, forward-looking statements are generally           
identified by the words "anticipate," "plan," "believe," "expect," "estimate,"  
and the like.  Although we believe that any forward-looking statements we make  
in this prospectus are reasonable, because forward-looking statements involve   
future risks and uncertainties, there are factors that could cause actual       
results to differ materially from those expressed or implied.  For example, a   
few of the uncertainties that could affect the accuracy of forward-looking      
statements, besides the specific factors identified above in the Risk Factors   
section of this prospectus, include:                                            

*    changes in general economic and business conditions affecting the
XML and Internet industries;                                

*    technical developments that make our products or services less   
competitive or obsolete;                                    

*    changes in our business strategies;                              

*    the level of demand for our products and services; and           

*    our ability to develop or maintain strategic relationships within
    the XML and e-commerce industries, which are critical to gaining
market share.                                               

   In light of the significant uncertainties inherent in the forward-looking
statements made in this prospectus, particularly in view of our early stage of  
operations, the inclusion of this information should not be regarded as a       
representation by us or any other person that our objectives and plans will be  
achieved.                                                                       

No "Safe Harbor"                                                                

The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for similar statements by existing public companies, does not     
apply to our offerings.                                                         

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Dividend Policy 

We have not declared or paid cash dividends on our common stock in the
preceding two fiscal years.  We currently intend to retain all future           
earnings, if any, to fund the operation of our business, and, therefore, do     
not anticipate paying dividends in the foreseeable future.  Future cash         
dividends, if any, will be determined by our Board of Directors, based upon     
such factors as the Company's historical and projected earnings, its working    
capital surplus and anticipated demands for capital expenditures.               

Capitalization  

  The following table sets forth our capitalization as of June 30, 2000 on
an actual basis.  This section should be read in conjunction with the           
consolidated financial statements and related notes contained elsewhere in      
this prospectus.                                                                

                                                                [Download Table]

                                             As of June 30, 2000
                                             -------------------
                                                                
Stockholders' Equity                                            
  Preferred Stock, $.01 par value,                              
     100,000,000 shares authorized;                             
     no shares outstanding                      $           -   
  Common Stock, $.0001 par value;                               
     authorized 500,000,000 shares:                             
     27,505,000 issued and outstanding                          
     shares                                             2,751   

    Additional paid-in capital                     11,675,258   

    Accumulated other comprehensive income                      
     (loss)                                            (5,089)  
    Accumulated deficit                            (1,694,090)  
                                                --------------  

Total stockholders' equity and capitalization   $   9,978,830   
                                                ==============  


These amounts do not include 4,000,000 shares of common stock we may  
issue upon exercise of options which may be granted under our Equity Incentive  
Plan.  Currently under the Plan we have issued 1,551,000 options which are      
subject to outstanding and unexercised options having exercise prices between   
$1.00 and $5.00 per share.  In addition, we have committed to certain persons   
to issue an additional 1,075,000 options at exercise prices ranging between     
$1.50 and $2.00 share. Of the 1,551,000 options outstanding, 206,000 options    
are currently not exercisable by the holder but will vest in the future,        
subject to the holder's continuing employment.                                  

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Selected Financial Data 

 We have set forth below certain selected financial data. This financial
data was derived from the consolidated financial statements and notes thereto   
included elsewhere in this prospectus.                                          

                                                                [Download Table]


                                Fiscal Years Ended June 30,   
                                  2000              1999      
                                 -------           -------    
                                                              
Statement of Operations Data                                  
 Revenues                      $   53,185      $       2,137  
 Operating Expenses             1,713,378            122,986  
 Operating Loss                (1,660,193)          (120,849) 
 Other Income (Expenses)           94,161                  -  
 Net Income (Loss)             (1,573,241)          (120,849) 
 Net (Loss) Per Share               (0.07)             (0.01) 
 Average Common Shares                                        
    Outstanding                 21,205,800        17,500,000  


                          At June 30, 2000    At June 30, 1999
                          ----------------    ----------------
                                                              
Balance Sheet Data                                            
 Total assets                 $ 10,082,007   $     88,052     
 Working Capital (deficiency)    8,158,004        (173,092)   
 Total Liabilities                 103,177        199,072     
 Accumulated Deficit            (1,694,090)       (120,849)   
 Stockholders' Equity            9,978,830        (111,020)   


___________________                                                             

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Management's Discussion and Analysis of Financial Condition and 
Results of Operations of XML - Global Technologies, Inc.  

  The following discussion and analysis should be read in conjunction with
the Financial Statements and Notes thereto appearing elsewhere in this          
Prospectus.  Unless otherwise noted, references to "we," "our," and "us" refer  
to XML-Global Technologies, Inc. and its subsidiaries.                          

Operations                                                                      

Effective August 27, 1999, XML-Technologies, Inc. and International   
Capital Funding, Inc. (ICF) entered into an agreement and plan of               
reorganization.  In accordance with the plan of reorganization, the             
shareholders of XML-Technologies, Inc. received 12.5 million shares of ICF      
stock in exchange for the 12.5 million outstanding shares of XML-Technologies,  
Inc.  The shareholders of ICF retained 5 million shares in exchange for no      
assets and the assumption of $2,671 of liabilities of ICF by XML-Technologies,  
Inc.  The transaction was accounted for as a recapitalization of XML-           
Technologies, Inc.                                                              

The founders of the Company began working with XML in early 1998 and  
began to develop software as a group in the fall of 1998. The Company was       
formed in May 1999 to develop commercial applications using the founders' XML   
expertise.  In July 1999, we commenced sales of Cartnetwork, our proprietary    
e-commerce software and in September 1999, we announced GoXML, which we         
believe is the world's first XML search engine.  On September 29, 1999, we      
filed an application with the United States Patent Office in respect of our     
GoXML search engine under the title "Authoring, altering, indexing, storing     
and retrieving electronic documents embedded with contextual markup".           

  We continue to develop proprietary XML-based solutions for the Internet-
based economy with a focus on e-commerce and the conversion of data from        
legacy formats to XML. As an adjunct to our e-commerce business, we develop     
Websites for our clients.  Our main sources of revenue are currently from the   
development of Websites and the licensing of our e-commerce software.           

1999 Equity Incentive Plan                                                      

 On October 19, 1999 the shareholders approved the 1999 Equity Incentive
Plan (the "1999 Plan") which provides for the grant of:                         

*    incentive and nonstatutory stock options,                        
*    stock bonuses,                                                   
*    rights to purchase restricted stock and                          
*    stock appreciation rights.                                       

Our Board of Directors adopted the 1999 Plan on September 15, 1999.  The Plan   
provides a means by which selected officers and employees of and consultants    
may be given an opportunity to purchase our stock, to assist in attracting and  
retaining employees holding key positions and to provide incentives for such    
persons to exert maximum efforts. The 1999 Plan is administered by our Board    
of Directors, which has exclusive power over the granting of options and their  
vesting provisions.  We have reserved a total of 4,000,000 shares of common     
stock for issuance under the 1999 Plan, of which 1,551,000 options have been    
granted to employees, directors and consultants at exercise prices of between   
$1.00 per share and $5.00 per share.  In addition, we have made commitments to  
grant an additional 1,075,000 options at exercise prices ranging between $1.50  
per share and $2.00 per share.                                                  

Plan of Operations                                                              

To date, we have raised gross proceeds of approximately $11 million   
through private offerings of equity securities.  We expect that funds           
remaining from these offerings, which amounted to $8.2 million at September     
30, 2000, will be sufficient to fund our operating and investing activities     
for at least the next twelve months.  Accordingly, we have no plans to raise    
additional funds during the next twelve months.                                 

  We are developing expressXCHG Version 1.0, a data transformation engine,
which we expect to release in December 2000, and the next release of our goXML  
search engine which we plan to release in February 2001. We plan to continue    
developing these products and to undertake development of new products          
including a version of Ceremony(-TM-), a system for authenticating online       
transactions, which we have licensed from PenOp Ltd.                            

  We plan to help companies implement XML solutions using our products and
are completing work under a contract with a Korean company that is setting up   
an Internet-based business-to-business marketplace to serve the Korean market.  
The contract value is $950,000 and the work is to be completed by December      
2000.  The full contract value may be subject to withholding taxes by the       
Korean tax authorities at a rate of 16.5%.  We will be able to apply these      
withholding taxes against United States income taxes otherwise payable, should  
we become taxable in the future.                                                

   We do not expect to undertake any significant purchases or sales of plant
and equipment during the next twelve months.  We will continue to acquire       
computer hardware and software and office furniture in the ordinary course as   
we hire new employees.                                                          

At the date of this Registration Statement, we employ approximately 48
staff.  We plan to hire an additional 25 employees over the next year,          
consisting of 15 software engineers, five implementation specialists and five   
sales and marketing personnel.  The actual number of staff that we hire will    
be dependent on how our business develops and will be subject to our ability    
to find qualified individuals on mutually acceptable terms.                     

Results of Operations                                                           

REVENUE.  Revenue consists of fees received from the sale of e-commerce         
solutions, the design and Web site development, implementation and support.     
Revenue was $53,200 for the year ended June 30, 2000, compared to $2,100 for    
the previous fiscal year. The increase was due to the longer fiscal period,     
sales of software products under development during the previous fiscal period  
and a generally increased scale of operations.                                  

RESEARCH AND DEVELOPMENT EXPENSES.  Product and content development costs       
include expenses we incur to develop our technology and our clients' web        
sites. These costs consist primarily of salaries and fees paid to employees     
and consultants to develop and maintain software and web sites. For the year    
ended June 30, 2000 and 1999, these costs were $774,100 and $49,800             
respectively. The increased expenditures in the year just ended, reflect        
increased staffing levels to accelerate development of existing and new         
products.                                                                       

SALES AND MARKETING EXPENSES.  Marketing, sales and client services costs       
include expenses we incur to obtain and maintain client relationships. These    
costs include fees paid to contractors and consultants, related travel and      
incidental costs and occupancy costs for our Seattle sales office. For the      
year ended June 30, 2000, sales and marketing expenses were $218,700. Sales     
and marketing expenses in the previous period were not material. The increase   
is due to the addition of staff and corporate identity and sales initiatives    
undertaken in the current year.                                                 

GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses       
consist primarily of salaries, contractor fees and related costs for general    
corporate functions, including travel, finance, accounting and legal expenses.  
For the year ended June 30, 2000, general and administrative expenses were      
$629,100, up from $70,100 in previous year. The increase reflects the longer    
fiscal period, increased staff, travel costs and professional fees associated   
with licensing our products and defending our intellectual property.            

DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation expense reflects            
depreciation of computer hardware, software and equipment over their estimated  
useful lives of between two and three years. Depreciation expense was $35,600   
and $3,100 respectively for the years ended June 30, 2000 and 1999. The         
company recorded only nominal amortization expense in regard to trademarks and  
patents as these costs largely relate to applications that had not been         
granted at June 30, 2000.                                                       

FAIR VALUE OF STOCK OPTIONS. The Company reports the financial impact of stock  
options issued to employees using APB-25. We record the estimated fair value    
of stock options granted to non-employees as an operating expense at the date   
the services were performed. During the year ended June 30, 2000 we granted     
275,000 options to non-employees at exercise prices of $1.00 per share. We      
estimate that the fair value of each of these options was approximately $0.22.  
We have recorded an expense of $55,900 in respect of options that have vested;  
25,000 of the options granted to non-employees were forfeited during the        
period. There was no corresponding expense in the prior year, as we had not     
issued any stock options.                                                       

INTEREST INCOME. During the year ended June 30, 2000, the company earned        
interest income of $94,200. We did not earn any interest income in the year     
ended June 30, 1999. Interest income has been earned on funds received from     
private equity placements which have  exceeded operating expenditures to date   
with the result that cash and cash equivalents increased in the period.         

Liquidity and Capital Resources                                                 

Since inception, we have financed our operations primarily through the
placement of equity securities and advances from our principal stockholder. In  
the year ended June 30, 2000, we received net proceeds of approximately         
$10,612,300 from private offerings of equity securities including the           
extinguishment of a note payable to a stockholder. Issue costs associated with  
these offerings, which have been offset against the net proceeds of the         
offering, were $840,200. As of June 30, 2000 we had $7,535,900 in cash and      
cash equivalents and $1,000,000 in short term investments.                      

Since August 1999, we have received gross proceeds of $11,452,500 from
the private placement of equity securities and the exercise of stock purchase   
warrants.                                                                       

                                                                [Download Table]


                         Number of                     Gross   
Date                   Units Sold       $/unit         Proceeds
----                   ----------       ------         --------
                                                               
Private Placements                                             
   August, 1999         2,330,000       1.00        $ 2,330,000
   January, 2000          500,000       2.00          1,000,000
   February and April,                                         
     2000               1,000,000       1.00          1,000,000
   February 2000           50,000       1.00             50,000
   March, 2000          4,625,000       1.50          6,937,500
   April, 2000            100,000       1.00            100,000
                                                    -----------
                                                    $11,417,500

Exercise of Warrants                                           
   March, 2000            500,000       .07              35,000
                                                    -----------
Total                                               $11,452,500
                                                    ===========


Approximately $8,000,000 is currently held in short term investments. 
The balance, net of issue costs, has been used as follows:                      

                                                                [Download Table]


                                                   
Research and development expenses       $   553,812
Sales and marketing expenses                173,542
General and administrative expenses         420,531
Capital assets                              135,816
Trademarks and patents                       39,945
Commissions, professional fees and                 
   other offering costs                     784,816

   We have incurred costs to design, develop and implement search engine and
electronic commerce applications and to grow our business. As a result, we      
have incurred operating losses and negative cash flows from operations in each  
quarter since we commenced operations. As of June 30, 2000, we had an           
accumulated deficit of $1,694,100. These losses have been primarily funded      
through private placement of equity securities.                                 

To date, we have experienced negative cash flows from operating       
activities. For the year ended June 30, 2000, net cash used in operating        
activities was primarily attributable to our net operating loss of $1,573,200.  
The net loss for the year was partially offset by non-cash depreciation and     
amortization of $35,600, the fair value of options granted to non-employees of  
$55,900 and a net cash outflow of $27,500 with respect to working capital       
changes. For the year ended June 30, 2000, net cash used in operating           
activities was therefore $1,509,300. In the year ended June 30, 1999 $63,500    
was used in operating activities.                                               

 For the year ended June 30, 2000, net cash used in investing activities
was $1,434,900. We spent $129,700 on computer hardware, software and            
equipment, $10,000 on leasehold improvements, $45,200 on patent and trademark   
applications, $250,000 on intellectual property, and $1,000,000 on short-term   
investments. The computer hardware and software purchases related to server     
upgrades and computers used by programmers. The leasehold improvements relate   
to our new Vancouver offices which opened in June 2000.                         

For the year ended June 30, 2000, net cash provided by financing      
activities was $10,477,100 attributable to the private placements of equity     
securities, offset by related issue costs. In addition, we acquired a 60%       
interest in DataXchg, Inc. at a deemed price of $1,000,000 in exchange for the  
issuance of 1,000,000 shares of common stock.  In the year ended June 30,       
1999, $135,100 was provided by financing activities relating to the issuance    
of a note payable.                                                              

   Changes in exchange rates had a net effect of decreasing our cash balance
by $6,700.                                                                      

As of June 30, 2000, we had no contractual capital commitments        
outstanding.                                                                    

   Our ability to generate significant revenue is uncertain. We incurred net
losses of approximately $1,573,200 during the year ended June 30, 2000. We      
expect losses from operations and negative cash flow to continue for the        
foreseeable future, at least through fiscal 2001, as a result of our expansion  
plans and our expectation that operating expenses will increase significantly   
in the next several years. The rate at which these losses will be incurred is   
likely to increase from current levels. Although we have experienced revenue    
growth, revenues have been substantially less than expenses and may not         
increase in the future. If our revenue does not increase and if our spending    
levels are not adjusted accordingly, we may not generate sufficient revenue to  
achieve profitability, which would have a materially adverse effect on our      
business, financial condition and results of operations. Even if we achieve     
profitability, we may not sustain or increase profitability on a quarterly or   
annual basis in the future.                                                     

Our working capital requirements depend on numerous factors. We have  
experienced increased expenditures since inception, consistent with growth in   
our operations and staffing, and expect that this trend will continue for the   
foreseeable future. We anticipate incurring additional expenses to increase     
our marketing and sales efforts, for software and infrastructure development.   
Additionally, we will continue to evaluate possible investments in businesses,  
products and technologies, the expansion of our marketing and sales programs    
and brand promotions. If we experience a shortfall in revenue in relation to    
expenses, or if our expenses precede increased revenue, our business,           
financial condition and results of operations could be materially and           
adversely affected                                                              

   We currently estimate that available cash resources at June 30, 2000 will
be sufficient to meet our anticipated needs for working capital and capital     
expenditures through June 2001. We may need to raise additional funds,          
however, in order to fund more rapid expansion, to develop new or enhance       
existing services or products, to respond to competitive pressures or to        
acquire complementary products, businesses or technologies. There can be no     
assurance that any required additional financing will be available on terms     
favorable to us, or at all. If additional funds are raised by the issuance of   
equity securities, stockholders may experience dilution of their ownership      
interest and these securities may have rights senior to those of the holders    
of the common stock. If additional funds are raised by the issuance of debt,    
we may be subject to certain limitations on our operations, including           
limitations on the payment of dividends. If adequate funds are not available    
or are not available on acceptable terms, we may be unable to fund our          
expansion, successfully promote our brand name, take advantage of acquisition   
opportunities, develop or enhance services or respond to competitive            
pressures, any of which could have a materially adverse effect on our           
business, financial condition and results of operations.                        

  Some of our revenues are earned and a substantial portion of our payroll
and other expenses are paid outside the United States in currencies other than  
US dollars. Because our financial results are reported in US dollars, they are  
affected by changes in the value of the various foreign currencies in which we  
make payments in relation to the US dollar. We do not cover known or            
anticipated currency fluctuation exposures through foreign currency exchange    
option or forward contracts. The primary currency for which we have foreign     
currency exchange rate exposure is the Canadian dollar. Our financial           
instruments, including cash, accounts receivable, accounts payable and accrued  
liabilities are carried at cost which approximates their fair value because of  
the short-term maturity of these instruments.                                   

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Business  

Overview                                                                        

We, together with our subsidiaries, are positioning ourselves to take 
advantage of what we believe is one of the most significant trends in business  
today: the adoption of a complete, e-business strategy using XML (eXtensible    
Markup Language) by global businesses. XML is a markup language that is able    
to add structure, intelligence and content identification to information on     
the Internet or Intranets.  By being able to attract and retain persons who     
are at the forefront of XML technology, we have been able to identify and       
develop several commercial products and services that will enable us to         
exploit the XML opportunities.  Our primary objective is to assist businesses   
in their effort to migrate from existing HTML and EDI standards to XML.  There  
is an emerging market for XML-based tools such as our search engine and other   
e-commerce products which will be targeted and served by our XML specialists.   

About XML                                                                       

Previously Web pages have been written on HTML (HyperText Mark-up     
Language).  HTML is essentially a presentation technology, concerned with how   
a browser should arrange text and graphics on a page.                           

HTML was never designed or intended to accommodate the complexity and 
quantity of information on the Web.  HTML browsers cannot identify or           
determine the meaning of a word or presentation on a page.  For example, if     
you were looking for a book authored by a person named "Gold," you may search   
terms such as "gold" and "book."  Yet, an HTML browser cannot differentiate     
between "books by Gold" and "books about gold" and therefore might present the  
searcher with irrelevant information.                                           

In response to this acknowledged difficulty, the World Wide Web       
Consortium ("W3C"), the industry association that promotes standards for the    
evolution of the Web, defined a new mark-up standard known as XML.  XML is a    
very simple and flexible text format which, like HTML, is tag based and saves   
its information in plain text files.  However, while HTML defines a set of      
tags used for formatting and displaying text, XML defines a set of tags used    
for representing text as pieces of information.  XML was originally designed    
to meet the challenges of large-scale electronic publishing.  However, with     
new XML tools, products and services being introduced, we believe that the      
greatest potential for XML will be related to business-to-business              
applications and, in particular, order processing and order fulfillment.        

   XML allows individual users to easily customize the presentation of their
data to meet their specific needs.  XML overcomes the limitation of HTML in     
that it:                                                                        

*  Provides metadata, or data about information, that will help people
   find information and help information producers and users find each
other.                                                          

*  Delivers information to users in a form that allows automatic      
processing after receipt.                                       

*  Enables media independent international electronic publishing.     

*  Makes it easy for users to process data using inexpensive software.

*  Allows users to display information in any form.                   

 The advantages flow from the fact that XML allows each writer to define
the tags that mark up and identify the type of data contained in a particular   
document.  Commerce on the Internet is undergoing global changes, including a   
shift in mark-up language technology.  HTML based e-commerce systems have       
severe limitations in terms of portability, data recognition and integration    
with back-end systems, and generally fail to provide a streamlined client-      
friendly approach to e-commerce.  XML addresses these limitations, primarily    
through its inherent extensibility and is therefore ideal for creating          
industry wide shopping systems.                                                 

Business strategy                                                               

Our marketing strategy                                                          

We intend to pursue the global business-to-business e-commerce market 
with our search engine and software tools.   Our initial marketing strategy     
will focus on forming partnerships and affiliations with leading software and   
XML companies.                                                                  

GoXML.com and expressXCHG marketing strategy                                    

  *  Corporate Partnerships and Affiliations.  We are developing strategic
alliances with businesses offering complementary software; for  
example, database vendors, and related services and system      
integrators.                                                    

*  License GoXML.  We will target companies in industry segments, such
     as publishing and education, that need to search for information from
   many disparate sources.  We believe that these companies are likely
     to be early adopters of XML and they will find it more cost effective
to license a search engine than develop one.  We have recently  
   licensed GoXML to a Korean company.  Direct sales, telesales and e-
  support for the marketing campaign form the basis of our licensing
strategy.                                                       

 *  License expressXCHG.  We will target companies that wish to adopt an
e-business strategy using their existing computer systems, and  
     businesses setting up "net markets" that allow online trading between
     many unrelated companies.  As with GoXML, these businesses are likely
  to be early adopters and many of these companies will be potential
     customers for both GoXML and expressXCHG.  For the foreseeable future
we will rely on direct sales to promote expressXCHG operations. 

*  Develop the convert2xml.com Website.  This Website will be an      
     important source of technical information, instructions and tutorials
 on how to write XML and will provide free software for converting
simple HTML to XML.                                             

*  XSLT.com.  We developed this Website to advance XSLT and promote   
    technical contributions.  XSLT is at the recommendation stage of the
 W3C and is expected to become the dominant language for template-
based stylizing of XML documents.                               

XML CommercePro marketing strategy                                              

The end-users for our XML CommercePro software are small and medium e-
commerce businesses seeking an XML-enabled e-commerce solution.  In order to    
effectively reach such businesses, we market XML CommercePro to e-commerce      
hosting businesses, such as ISPs, ASPs and server farms that have multiple e-   
commerce clients.  By using XML CommercePro, the hosting businesses offer       
their clients the ability to XML-enable their e-commerce Websites.              

Our sales and marketing approach combines direct sales through our    
Seattle and Vancouver offices with a web presence at our CartNetwork site.      
The basic software for XML CommercePro is available as a free download at the   
CartNetwork site allowing both web hosting businesses and end-users to sample   
the software before committing to a purchase.                                   

By allowing free downloads (averaging 100 per week) of the LeCart     
shopping cart program, we believe that we will expose our XML CommercePro to    
its intended audience of small to medium e-commerce providers.  XML             
CommercePro is XML enabled and appeals to individuals and corporations that     
want to be able to sell online and utilize our XML e-commerce solution.  The    
product is currently being re-branded to focus on the XML capability of the     
product as well as to use it as a link to the GoXML.com site and to promote     
our core XML products.                                                          

Our strategic relationships                                                     

We have developed important relationships with many of the leading XML
firms and we are also maintaining an active role in associations and industry   
consortiums that are considered leaders in the development of XML standards.    

Corporate relationships                                                         

  We have agreements or are in negotiation with a number of major software
companies for the exchange, development  and cross-license of XML and other     
applications.  We consider the creation and maintenance of these relationships  
to be important to our business development and future success.                 

*    PenOp, Ltd.                                                                

In May, 2000, we purchased from PenOp, Ltd. a non-exclusive license to
use its patented technology that permits verifiable electronic signatures for   
a wide range of eBusiness and web-based systems.  Known as "Ceremony," the      
technology allows individuals to sign and secure electronic transactions with   
an electronic signature that replaces ink signatures for paper transactions.    
We paid a total of $250,000 for the license.  We intend to incorporate          
Ceremony into several of our proprietary XML applications.                      

*    B2B Internet, Inc.                                                         

In June 2000, we entered into a software development and license      
agreement with B2B Internet, Inc., a Korean Internet software and technology    
company.  Under the agreement, we are developing a net market solution using    
our GoXML and expressXCHG products.  The product is scheduled to be completed   
in December 2000 for a total development fee of $950,000.  When completed, the  
software will be owned by B2B Internet and will be part of an integrated        
online marketplace that allows buyers and sellers to better communicate and     
transact business.  Under the agreement we will receive sublicense fees when    
B2B Internet sublicenses our products in Korea where they will have exclusive   
distribution rights for four years.                                             

Standards associations                                                          

*  XML EDI.  This is a consortium of over 1,500 of the world's leading
   technology-based companies co-founded and directed by David Webber,
one of our Directors.  Its purpose is to promote the exchange of
information and technology among participants in the XML-EDI    
industry.                                                       

*  ebXML.  This is an association sponsored by the United Nations and 
     OASIS whose mandate is to develop standards for businesses to use the
 Internet for the exchange of data and e-commerce and business-to-
     business transactions using XML.  Duane Nickull, our Chief Technology
     Officer, is Editor of the Technical Architectural Committee of ebXML.

 *  OASIS.   OASIS is a non-profit international consortium of users and
 vendors dedicated to the promotion of open specifications for the
 exchange of structured data.  It is focused on the definition and
implementation of XML communication.                            

In addition, we maintain ongoing dialogues with many technology and software    
companies that are involved in the growing XML industry.  These discussions     
and relationships have not resulted in specific business arrangements or        
revenues, but rather they position us to capture possible future opportunities  
should they arise.                                                              

Products                                                                        

We have developed and are using our proprietary technology to         
commercialize a suite of applications for e-business to help companies convert  
from HTML to XML.  We believe that this technology, together with technology    
we currently have under development, will allow existing businesses to          
successfully adopt XML database structures:                                     

  *  GoXML - is, we believe, the first context XML search engine, allowing
   users to search for terms according to the type of information they
    are looking for.  Version 1.0 of GoXML was launched in July 1999 and
    was designed to handle over 60 million documents. It is based on our
     proprietary technology that is patent pending, and uses a proprietary
     spidering program that scans the Internet to find and index XML data.
 We released Version 2.0 together with a software developer kit in
  August  2000.  Version 2.0 is designed to handle up to 200 million
    complex documents.  One application for the search engine product is
for corporate intranets of companies that have already converted
  databases to XML.  The Internet-based version of the search engine
has been showcasing our technology since July 1999.             

*  expressXCHG - is a patented data transformation tool under final   
  development that allows direct interface between different systems
including EDI, HTML, EDIFACT / X12, SAP BAPIs with an expected  
    release in November, 2000.  We are developing expressXCHG to be able
   to effect the conversion between all of these standards and XML. We
   believe this to be a key component to the migration and interchange
of business data on the Internet.                               

*  XML CommercePro - is an XML enabled multi-user shopping cart system
designed for ISPs (Internet Service Providers), CSPs (Commerce  
   Service Providers) and ASPs (Application Service Providers). It was
  first launched in June 1999 but one of its components, LeCart, has
  been commercially available since September 1998.  Its setup-once,
run-anywhere design means it not only enables hosted clients'   
 Websites for e-commerce, but any Website on the Internet as well.
The software has a simple browser-based administration interface
which will allow users to sign up manually or online, thereby   
becoming e-commerce enabled immediately.                        

*  XML Data Conversions - XML Global is developing solutions to enable
     Websites to seamlessly integrate an XML-based solution into their Web
     presence. One such solution is eXtensible Object Server Pages (XOSP).
    XOSP is the XML equivalent to the ASP (Active Server Pages) standard
  which was developed by Microsoft. This software allows web masters
  and ISPs to mark up HTML documents with XML, thus providing all of
   the retrieval benefits of XML to HTML documents.  XOSP will be used
along with our other tools to develop other XML-based business  
applications.                                                   

Competition in general                                                          

As in most technology-based industries, competitive advantages in our 
industry are gained by speed of market entry, availability of working capital,  
scope and scalability of software functionality, adaptability to different      
applications, existence or access to distribution channels and, of course,      
technological innovation and related patent protection.  Our greatest           
advantage is in our patented technology; however, many of our competitors have  
better finances and have better access to channels of distribution.  Each of    
these factors applies to our business, which is quickly evolving.               

Our competitors are frequently quite secretive about their development
efforts, but because of the rapid evolution of XML technology, we expect new    
competitive product releases will appear quickly and frequently.                

Competition with GoXML search engine                                            

Our competition comes from a variety of companies who have adopted XML
and are using various XML-based products for commercial purposes.               

Private search engines                                                          

*  Sequoia Software has what we believe to be the only other pure XML 
  search engine which is called "Xdex."  This is for use in intranet
applications with very small businesses.  To our knowledge, the 
product has not yet been commercially launched, and its future  
release date is unknown.                                        

*  Inktomi has an HTML search engine created at the University of     
    California at Berkeley.  It develops and markets software design for
   Internet infrastructure and media companies.  It works with leading
companies including America On Line, British Telecommunications,
    Cnet, Excite@Home, Intel, Microsoft, Real Networks, Sun Microsystems
and Yahoo.  The Inktomi search engine is licensed to both public
   search portals and private corporations for their intranets.  There
     is no public portal for a direct query of the Inktomi index directly.
We believe that Inktomi is the industry leader in search engine 
    licensing.  Based on published reports, it reported 1999 revenues of
 $71,000,000 and handled 2.9 billion queries in the fourth quarter
alone.                                                          

*  Ultraseek, as a division of Go.com (a Disney company), launched its
Ultraseek server in 1997 and now claims customers such as Sun   
  Microsystems, 3Com and Ericsson.  Ultraseek's 3.0 version provides
     support for indexing and search of XML documents.  They have modified
  their HTML search engine to recognize XML documents.  Ultraseek is
   not actively marketed and, to our knowledge, is not a context-based
search engine.                                                  

*  IBM, like Ultraseek, has modified an existing HTML search tool to  
  accommodate XML documents.  This product has not been commercially
launched to date.                                               

Commercial search engines                                                       

  We believe that eventually our GoXML.com search engine will compete with
the large Web-based search portals.  To date, there are not a sufficient        
number of XML documents to make a commercial Internet XML portal competitive    
with HTML search portals, and we are not presently capable of competing with    
the HTML-based search portals.  However, we believe that we ultimately may      
compete with the larger HTML based search portals such as Alta Vista, Ask       
Jeeves, Excite, Go.com, Goto.com, Google, HotBot, Look Smart, Snap and Yahoo.   

Competition with expressXCHG                                                    

   Several companies have developed XML/EDI translation systems that compete
with our expressXCHG transformation software:                                   

*  XML Solutions offers its XEDI translator which can convert EDI     
    documents to XML documents for transmission over the public Internet
or private networks.                                            

*  EComXML offers secure EDI/Backoffice integration.  Its EComTalk    
     Server is a secure e-commerce gateway for the exchange of transaction
documents.                                                      

*  IBM has recently moved into a beta testing stage for its new EDI to
   XML translator.  When fully deployed, IBM has estimated substantial
savings for its internal systems resulting from a broad         
implementation of this translator.                              

Competition with XML CommercePro                                                

  There are many e-commerce shopping cart programs available for sale, and
a growing number available for free on the Internet.  Although certain of       
these programs directly compete with our bolt-on capability, none of these      
programs, we believe, compete with us in being able to input and output XML     
product data.  We intend to continue to sell and license our product to be      
sublicensed, in many cases at very competitive prices.  If the use of XML       
increases and e-commerce applications begin utilizing XML, we would expect to   
experience increased competition.                                               

Intellectual property                                                           

Patents and licenses                                                            

We have filed a 51 point patent with the United States Patent and     
Trademark Office on our XML search engine and are in the process of preparing   
two other patents relating to our proprietary technologies.  We also have a     
perpetual worldwide exclusive license to use and sublicense and make, use and   
sell products based on the expressXCHG technology, including, without           
limitation, the patented "expressXCHG" software.  No assurance can be given     
that any patent will be issued or that the scope of any patent protection will  
exclude competitors or that any patent, if issued, will be held valid if        
subsequently challenged.                                                        

 We have recently licensed Ceremony from PenOp, Ltd., a technology-based
electronic signature product.  This capability will be incorporated into        
several of our XML applications.                                                

Other intellectual property                                                     

As we discussed under the section "Risk Factors," we have applied with
the United States Patent and Trademark Office to register the following         
trademarks all of which are still pending:                                      

*  GoXML                                                              
*  XOSP                                                               
*  XHML                                                               
*  LeCart                                                             
*  XOP                                                                

In addition we have registered the following domain names:                      

*  www.GoXML.com                                                      
*  www.lecart.com                                                     
*  www.cartnetwork.com.                                               
*  www.cartnetwork.net                                                
*  www.convert2xml.com                                                
*  www.findxml.com                                                    
*  www.xslt.com                                                       
*  www.xosp.com                                                       
*  www.xosp.net                                                       
*  www.xosp.org                                                       
*  www.walkaboutwebs.com                                              
*  www.xmldirectory.com                                               

 Our trademarks and domain names play an important role in expanding the
awareness of our products on the Internet and developing partnerships between   
those who use the Internet to retrieve information and many providers of        
products and services available on the web.  While we have applied for          
registration of the foregoing trademarks and registered domain names in an      
effort to protect them, our efforts may be inadequate to prevent others from    
claiming violations of their marks and may be inadequate to protect our use of  
those names as unique.  In addition, trademark protection and the uncertainty   
surrounding the legal protections of domain names may be unenforceable or       
limited in other countries, and the global nature of the Internet makes it      
impossible to control the ultimate destination of our communications.  The      
regulation of web addresses in the United States and in foreign countries is    
subject to change.  As a result, we may not be able to acquire or maintain our  
web addresses in the future.  Furthermore, the relationship between             
regulations governing such addresses and the laws protecting trademarks is      
unsettled.                                                                      

In fact, we are aware of a German company that has been using the name
"Go-XML" for its Website.  We have made a demand that it cease and desist from  
such use, but there can be no assurance that we will be able to prevent or      
limit this conflicting and competing use.  If we are unsuccessful in these      
efforts, our use of the trademark "Go-XML" may be limited or restricted, or,    
at the very least, may become so diluted as to lose its value, in which case    
we may have to consider rebranding the product.                                 

Despite our efforts to protect our proprietary rights, unauthorized   
parties may attempt to copy aspects of our products or obtain and use           
information that we regard as proprietary.  Policing unauthorized use of our    
products is difficult and, though we are unable to determine the extent to      
which piracy of our software products exists, we expect software piracy to be   
a problem.   In addition, the laws of some foreign countries do not protect     
our proprietary rights to the same extent as the laws of the United States and  
Canada (where XML Research is located).  Furthermore, our competitors may       
independently develop technology similar to ours.  The number of intellectual   
property claims in our industry may increase as the number of computing         
products grows and the functionality of products in different industry          
segments overlaps.  Although we are not aware that any of our products or       
other intellectual property infringe upon the proprietary rights of third       
parties, there can be no assurance that third parties will not claim            
infringement by us with respect to current or future products.  Any of these    
claims, with or without merit, could be time consuming to address, result in    
costly litigation, cause product shipment delays or require us to enter into    
royalty or license agreements.   These royalty or license agreements might not  
be available on terms acceptable to us or at all, which could have a material   
adverse affect on our business.                                                 

Research and development                                                        

We have 33 full time software engineers and architects devoted to     
software research and development and Website development. In the period ended  
June 30, 1999, and the year ended June 30, 2000, we expended approximately      
$49,800 and $774,100 respectively, for research and development costs related   
to our products.                                                                

General Risks of Our Business                                                   

We are vulnerable to general Internet systems failures or interruptions of our  
service                                                                         

Our success depends on the capacity, reliability and security of our  
networking hardware, software and telecommunications infrastructure.  Despite   
precautions taken by us, our system is susceptible to natural and man-made      
disasters.  Telecommunications failures, computer viruses, electronic break-    
ins or other similar disruptive problems could adversely affect the operation   
of our systems.  Any such technical failure or security problems could harm     
our business, financial condition and results of operations.  Periodically, we  
may experience unscheduled system downtime that may result in our Website       
being inaccessible to customers, or we may experience slow response times       
which may result in decreased traffic to our Websites.  If these problems       
arise, they could materially and adversely affect our business, results of      
operations and financial condition.                                             

Additional government regulations may adversely affect our business             

 The laws governing Internet transactions remain largely unsettled.  The
adoption or modification of laws or regulations relating to the Internet could  
harm our business, operating results and financial condition by increasing our  
costs and administrative burdens.  It may take years to determine whether and   
how existing laws such as those governing intellectual property, privacy,       
libel, consumer protection and taxation apply to the Internet.  Laws and        
regulations directly applicable to communications or commerce over the          
Internet are becoming more prevalent.  We must comply with new regulations in   
Europe, Canada and the United States, as well as any other regulations adopted  
by other countries where we may do business.  The growth and development of     
the market for online commerce may prompt calls for more stringent consumer     
protection laws, both in the United States and abroad, as well as new laws      
governing the taxation of Internet commerce.  Compliance with any newly         
adopted laws may prove difficult for us and may harm our business, operating    
results and financial condition.                                                

In 1998 the United States Government enacted a three-year moratorium  
preventing states and local governments from imposing new taxes on electronic   
commerce transactions.  Upon expiration of this moratorium, if it is not        
extended, states or other governments might levy sales or use taxes on          
electronic commerce transactions.  An increase in taxation of electronic        
commerce transactions might also make the Internet less effective for           
consumers and businesses.                                                       

We may be subject to future product liability claims and our products'          
reputations may suffer                                                          

  Many of our installations will involve projects that are critical to the
operations of our customers' business and provide benefits that may be          
difficult to quantify.  Any failure in a customer's system could result in a    
claim for substantial damages against us, regardless of our responsibility for  
the failure.  Although our license agreements with our customers will contain   
provisions designed to limit contractually our liability for damages arising    
from negligent acts, errors, mistakes or omissions, it is possible that these   
provisions will not be enforceable in certain instances or would otherwise not  
protect us from liability for damages.  Although we maintain general liability  
insurance coverage, this coverage may not continue to be available on           
reasonable terms or at all, or may be insufficient to cover one or more large   
claims.  Moreover, such insurance coverage may not provide benefits for         
certain product liability claims.                                               

   In addition, we plan to enter into agreements with our strategic alliance
partners whereby we license our products for integration with the alliance      
partners' products.  If an alliance partners' product fails to meet customer    
expectations or causes a failure in its customer's systems, the reputation of   
our products could be materially and adversely affected, even if our products   
performed in accordance with their functional specifications.                   

Employees                                                                       

We now have 48 full time employees most of whom are located at our principal    
office in Vancouver, British Columbia.  In addition, we also have an            
additional labor pool consisting of contract professionals that are hired on a  
part-time basis.                                                                

Facilities                                                                      

Our principal executive offices are located in Vancouver, British     
Columbia.  This office consists of 8,100 square feet which we  hold on a five-  
year lease expiring on May 31, 2005 with a monthly rent beginning at $5,500     
and increasing to $6,300 after two years with triple net adjustments and a      
total commitment, including deposits and excluding operating costs, of $28700.  

Our Seattle, Washington office consists of 500 square feet which we   
occupy on a month-to-month basis.  The monthly rent at that location is $350,   
including common area costs.                                                    

Legal proceedings                                                               

A German company, Software AG has a Website using the title "Go-XML"  
which we believe violates our pending "GoXML" trademark. We have exchanged      
correspondence with Software AG but have not initiated legal proceedings. At    
the date of this report, there are no pending legal proceedings in which we     
are a party and, with the exception of the Software AG matter, we are not       
aware of any threatened legal proceedings.                                      

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Corporate Organization  

Our Company is comprised of a series of corporations organized in a   
multi-tiered arrangement depicted in the following schematic:                   

XML - Global Technologies, Inc.                                 
(Colorado)                              
-------------------------------                                 
100%   |              100%  |                                   
|                    |                            
XML Technologies, Inc.        DataXchg, Inc.                                    
(Nevada)  |                (Delaware)                                 
|                                                 
100%   |                                                        
|                                                 
XML Global Research, Inc.                                                       
(British Columbia, Canada)                                                      
|                                                 
100%   |                                                        
|                                                 
Walkabout Website Designs, Ltd.                                                 
(British Columbia, Canada)                                                      

 The functions and relationships of these entities to one another can be
summarized as follows:                                                          

*  XML - Global Technologies, Inc., a Colorado corporation, ("XML     
   Global") is the parent corporation whose shares of common stock are
    registered under the Exchange Act.  XML Global is primarily involved
in capital formation and marketing and sales efforts for the    
Company's products.  In addition, it holds intellectual property
  rights, including trademark registration applications, our pending
   patent applications and an exclusive license from DataXchg, Inc. to
market the expressXCHG product to end users.  In addition, upon 
completion of the merger of XML Nevada with and into XML Global 
     (described below), XML Global will hold all intellectual property and
 other technology rights previously held by XML Nevada, including,
  without limitation, the pending patents and patent applications in
   preparation.  XML Global has a professional services agreement with
    XML Research (described below) pursuant to which XML Global has been
     assigned the right to all technology and intellectual property rights
owned by XML Research.                                          

*  XML Technologies, Inc., a Nevada corporation, ("XML Nevada") is a  
   wholly owned subsidiary of XML Global.  Founded in 1999, XML Nevada
holds the assignment of all of the past and future intellectual 
    property rights developed by our technology founders, Duane Nickull,
  Matthew MacKenzie, Jamie Hoglund and Michael Palethorpe, including
   the pending patent and agreement with XML Research described above.
   XML Nevada was acquired by XML Global in a reorganization in August
1999.  In that transaction, the shareholders of XML Nevada were 
    issued 12,500,000 shares of our common stock in exchange for 100% of
the outstanding common stock of XML Nevada.  As a result of this
  share exchange, the shareholders of XML Nevada acquired 71% of our
total outstanding shares.                                       

*  XML Global Research, Inc., a British Columbia corporation, ("XML   
Research") is a wholly-owned British Columbian subsidiary of XML
Nevada.  XML Research performs the technology research and      
   development under contract with XML Nevada.   XML Research operates
 out of its Vancouver, British Columbia offices and was created to
ensure that the intellectual property developed by the Company's
     Canadian-based technology employees is made available to and owned by
XML Nevada.                                                     

*  Walkabout Website Designs, Ltd.., a British Columbia corporation,  
  ("Walkabout") was acquired by XML Research in May 1999 in order to
   obtain a client base to be used for beta testing of its technology.
    At the present time, Walkabout has no separate employees, offices or
corporate functions.                                            

*  DataXchg, Inc., a Delaware corporation, ("DataXchg") was formed by 
 XML Global and David Webber, a director of the Company in October
     1999.  Initially, DataXchg  was 40% owned by XML Global and 60% owned
   by David Webber.  In exchange for  60% of the outstanding shares of
    DataXchg,  David Webber assigned to DataXchg all of his right, title
and interest in and to the intellectual property rights and     
underlying technology owned, developed or conceived of by them  
 pertaining to  business-to-business solutions and EDI and XML-EDI
  solutions, including, without limitation, the e-business solutions
     known as "BizTokens" and the software product known as "expressXCHG",
   which offers the ability to convert standard EDI documents into XML
   format.  DataXchg also granted to XML Global an exclusive perpetual
worldwide license to use and sublicense and make, use and sell  
     products based on the technology and associated intellectual property
  rights owned by DataXchg, in consideration for a variable royalty.
     In June 2000, we acquired Mr. Webber's 60% interest in DataXchg, Inc.
 in consideration of issuing to Mr. Webber 1,000,000 shares of our
   common stock.  As a result of this transaction, DataXchg became our
wholly-owned subsidiary.                                        

  We plan to simplify our corporate organization by completing a statutory
merger:  the merger of Walkabout with and into XML Research, with XML Research  
to be the surviving corporation.  The effect of these mergers will be to        
consolidate all of our intellectual property and other technology rights, and   
marketing and sales activity, in XML Global.  XML Research will continue to     
perform technology research and development functions under its agreement with  
XML Nevada which XML Global will succeed to as a result of the merger.          

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Management  

Directors, executive officers and key employees                                 

Our executive officers, key employees and outside Directors and their 
respective ages and positions are set forth below:                              

                                                                [Download Table]


Name                Age       Position                                   
                                                                         

Peter Shandro       56        Chairman of the Board, Chief Executive     
                              Officer, President and Director            
Duane Nickull       36        Chief Technology Officer and Director      
Simon Anderson      39        Chief Financial Officer and Director       
Matt MacKenzie      22        Vice President Research and Development    
Jamie Hoglund       29        Vice President E-Commerce                  
Gordon Ebanks       39        Vice President of Sales and Marketing      
David Webber        46        Director                                   
Dick Hardt          37        Director                                   
Laurie Horvath      25        Controller and Principal Accounting Officer


Peter Shandro has been our CEO and a Director since June 1999 and     
President since June 2000.  He was an initial founder of XML Technologies,      
Inc., the Nevada corporation, and supervised its reorganization with the        
Company in August 1999. From 1970 to 1982, he was a Partner and Vice President  
of Marketing with FMH Canada, Ltd., a leisure products distribution company.    
Since 1992, through his privately owned companies, Noram Capital Partners and   
Wes-Sport Holdings, Ltd., he has arranged private debt and equity as well as    
bank financing for both public and private companies.  He is currently the      
owner, President and Director of Spectrum BioTech, Inc., a private company      
that holds the patents to a unique self-destructing safety syringe.  This       
company is not currently active.  He is also a partner in Production Finance,   
Inc., a merchant trade finance company specializing in financing companies in   
the leisure and lifestyle products industry. From 1982 to 1991, he provided     
management and marketing services for Noram Recreation, Ltd., a company         
engaged in the development, financing and operation of eight aquatic            
recreation businesses.                                                          

 Duane Nickull has been a Director since August 1999, was President from
August 1999 to June 2000 and has been Chief Technology Officer since June       
2000.  He has worked with computers for 19 years and is a certified level 2     
HTML Designer with application skills in Javascript and DHTML.  Prior to        
helping form and organize XML, from 1986 to 1999 he was President of Nickull-   
Dowdall Sales, Ltd., a cosmetics manufacturer.                                  

 Simon Anderson has been Chief Financial Officer and Director since June
1999. Mr. Anderson is also a 50% owner and Vice President of MCSI Consulting    
Services Inc. from 1996 to present, to which he devotes about half of his time  
and attention.  Mr. Anderson is both a Chartered Accountant and a Chartered     
Business Valuator and from 1994 to 1996 was a partner with BDO Dunwoody, an     
international accounting and consulting firm, where he specialized in mergers,  
acquisitions and valuations.  From 1999 to June 2000, he was a director of mv   
Video, a Vancouver-based post production facility.  From 1999 to 2000 he was    
Treasurer of MC2 Learning Systems, Inc.  He was also a director of Trade Wind   
Communications, Ltd. from March 1997 to June 1999 and a director of             
Flexemessaging.com, Inc. from March 1999 to June 1999.  Mr. Anderson received   
a Bachelor of Commerce in Accounting and Management Information Systems from    
the University of British Columbia in May 1983 and was admitted as a member of  
the Institute of Chartered Accountants in British Columbia in 1986.  He is      
also a Chartered Business Valuator.                                             

   Matthew MacKenzie has been our Vice President of Research and Development
since August 1999.  Mr. MacKenzie attended the University of New Brunswick      
from September 1996 to April 1999, majoring in Sociology.  Prior to 1996, Mr.   
MacKenzie was a high school student.                                            

   Jamie Hoglund has been our Vice President of E-Commerce since August 1999
and a Director of XML Nevada since August 1999.  Beginning in 1998, he began    
independently collaborating with Matt MacKenzie on the development of our       
technology.  Prior to that, he was employed by Carghill Agricultural            
Enterprises for several years.  Mr. Hoglund developed his software programming  
skills through independent study and work.                                      

Gordon Ebanks has been our Executive Vice President of Sales and      
Marketing since November 2000.  Prior to that, he was employed with Gelco       
Information Network, which had acquired Performance Wave, Inc., where Mr.       
Ebanks served as President and Chief Operating Officer.  From 1989 to 1997, he  
was employed with Tambrands Corporation, a leading global consumer goods        
manufacturer, where he served as Chief Technology Officer.  Mr. Ebanks is a     
1983 graduate of Southbank University in London, England where he received      
Bachelor of Arts degrees in both Computer Science and Mathematics.  He also     
holds an M.B.A. in Finance from the same university which he obtained in 1988.  

  David R. R. Webber has been a Vice President of DataXchg and Director of
the Company since October 1999.  Mr. Webber is co-founder of the XML/EDI        
Group, a consortium which provides technical support to the advancement of      
XML/EDI technologies as an emerging worldwide standard. In January 1999, he     
founded Gnosis, Inc., a computer consulting firm which he continues to serve    
as President.  From January 1997 to January 1999, he was a Senior Engineer      
with Elumen Solutions, a health care management information systems firm.       
From September 1994 to January 1997, he was Project Manager for LNK             
Corporation, an information technology research firm.  From March 1994 to       
September 1994, he was an EDI specialist with DynCorpViar.  Mr. Webber has a    
degree in Physics with Computing from the University of Kent at Canterbury, UK  
which was received in 1976.                                                     

   Dick Hardt has been a Director since October 2000.  He is currently Chief
Executive Officer of ActiveState Tool Corporation, which he founded in July     
1997 with O'Reilly and Associates.  Prior to that, he formed hip                
communications, inc., a company that became one of the larger web development   
and hosting companies in western Canada.  Mr. Hardt sold his interest in hip    
communications, inc. in 1997 before founding ActiveState Tool Corporation.      
From 1993 he was employed by Paradigm Development (now known as Schema          
Software, Inc.) as a software architect manager until his founding of hip       
communications, inc.  From 1986 to 1993, he was employed by Consumer Software   
where he was responsible for porting one of the first LAN e-mail packages.      
Mr. Hardt serves as a member of the Board of Directors of BC TIA and the        
Advisory Board of AceTech Early Stage, Inc.                                     

 Laurie Horvath has been our Controller and Principal Accounting Officer
since May 2000. Ms. Horvath was an Accountant with Martin Meeres, Chartered     
Accountants from 1994 to 1998 and a Financial Analyst in Corporate Accounting   
with Canadian Airlines International Ltd. from 1998 to May 2000. She was        
admitted as a member of the Certified General Accountants Association of        
Canada and British Columbia in August 1999.                                     

 No family relationship exists between any of our directors or executive
officers.                                                                       

 Our directors each serve for a term of one year and are elected at each
annual meeting of our shareholders.                                             

We have an agreement with XML Fund, LLC, one of our principal         
shareholders, that its managing director, David Pool, will join as a member of  
our board of directors at some point in the future, subject to our obtaining    
director and officer liability insurance.  The following sets forth             
information with respect to Mr. Pool:                                           

David Pool founded XML Fund, LLC in 1999 as a private investment fund 
that makes equity investments in companies involved in the development of XML   
technology.  From October 1996 to the present, he has been a director of        
Aventail Corporation, a managed service provider of secured partner networks.   
From September 1995 to the present, he has been a director of ASC Network,      
Inc., an on-line network for the United States ambulatory surgery center        
market.  In October 1996, he founded DataChannel, Inc. which he served as       
President and CEO from October 1996 to January 2000 and which he has served as  
a director since October 1996.  DataChannel is a provider of XML-based          
enterprise information portal products.  From May 2000 to the present, he has   
been a director of Intalio, Inc., a business process management system          
provider, and from January 2000 to August 2000, he served as director of        
Fishmonger, Inc., and on-line marketplace for the seafood industry.  From       
August 2000 to the present, he has been a director of WorldCatch, Inc., an on-  
line marketplace for the seafood industry; from May 2000 to the present, he     
has served as a director of Entricom, Inc., a provider of operations support    
systems to communications services providers; from September 2000 to the        
present, he has been a director of XYZFind Corporation, a provider of search    
engines for database and XML data; from January 2000 to the present, he has     
served as a director of Thinkview, Inc., a media syndication group; and from    
February 2000 to June 2000, he served as a director Live Software, Inc., a      
java software developer.                                                        

Currently, we do not have standing Audit, Compensation or Nominating  
Committees of the Board of Directors.  We do plan to form an Audit Committee    
at the earliest opportunity.  No member of the Audit Committee will receive     
any additional compensation for his service as a member of that Committee and   
members of this committee will be primarily comprised of non-officer            
directors.  The Audit Committee will be responsible for providing assurance     
that financial disclosures made by management reasonably portray our financial  
condition, results of operations, plan and long-term commitments.  To           
accomplish this, the Audit Committee will oversee the external audit coverage,  
including the annual nomination of the independent public accountants, review   
accounting policies and policy decisions, review the financial statements,      
including interim financial statements and annual financial statements,         
together with auditor's opinions, inquire about the existence and substance of  
any significant accounting accruals, reserves or estimates made by management,  
review with management the Management's Discussion and Analysis section of the  
Annual Report, review the letter of management representations given to the     
independent public accountants, meet privately with the independent public      
accountants to discuss all pertinent matters, and report regularly to the       
Board of Directors regarding its activities.                                    

   We also plan to form a Compensation Committee during as soon as possible.
No member of the Compensation Committee will receive any additional             
compensation for his service as a member of that Committee.  The Compensation   
Committee will be responsible for reviewing pertinent data and making           
recommendations with respect to compensation standards for our executive        
officers, including the President and Chief Executive Officer, establishing     
guidelines and making recommendations for the implementation of management      
incentive compensation plans, reviewing the performance of the President and    
CEO, establishing guidelines and standards for the grant of incentive stock     
options to key employees under our Equity Incentive Plan, and reporting         
regularly to our Board of Directors with respect to its recommendations.        

Advisory Board                                                                  

  In February 2000, our Board of Directors authorized the establishment of
an Advisory Board whose members consist of persons who possess particular       
expertise in one or more disciplines that we believe are relevant to our        
strategic plan, business development and core technologies.  To date, four      
persons have agreed to serve as members of the Advisory Board:  Scott Briggs,   
Mark Van der Griend, Ken Holman and Greg Celmainis.  The members of the         
Advisory Board do not exercise or possess any of the authority of members of    
our Board of Directors, but are merely advisors to our board.                   

1999 Equity Incentive Plan                                                      

  On September 15, 1999, the Board of Directors authorized, and on October
19, 1999, our stockholders approved, the 1999 Equity Incentive Plan for our     
executive and other employees, plus a limited number of outside consultants     
and advisors.  Under the Equity Incentive Plan, our employees, outside          
consultants and advisors may receive awards of non-qualified options and        
incentive options, stock appreciation rights or restricted stock.  A maximum    
of 4,000,000 shares of our common stock are subject to the Equity Incentive     
Plan. As of the date of this Memorandum, no stock appreciation rights or        
restricted stock has been granted under the Equity Incentive Plan, and options  
to purchase 1,591,000 shares of our common stock have been granted, including   
options to purchase 125,000 shares which have been granted to each of our non-  
employee directors and 30,000 options granted to each member of our Advisory    
Board.  To date, no restricted shares have been issued pursuant to the Plan.    
The purpose of the Equity Incentive Plan is to provide employees, including     
our officers and employee directors, and non-employee consultants and           
advisors, with an increased incentive to make significant and extraordinary     
contributions to our long-term performance and growth, to join their interests  
with the interests of our shareholders, and to facilitate attracting and        
retaining employees of exceptional ability.                                     

The Equity Incentive Plan may be administered by the Board, or in the 
Board's sole discretion by the Compensation Committee of the Board or such      
other committee as may be specified by the Board to perform the functions and   
duties of the Committee under the Equity Incentive Plan. Subject to the         
provisions of the Equity Incentive Plan, the Committee and the Board shall      
determine, from those eligible to be participants in the Plan, the persons to   
be granted stock options, stock appreciation rights and restricted stock, the   
amount of stock or rights to be optioned or granted to each such person, and    
the terms and conditions of any stock option, stock appreciation rights and     
restricted stock.                                                               

Under the Equity Incentive Plan, in the event there occurs a change of
control of the company, all outstanding and unexercised options granted to our  
key employees, officers, directors and consultants will at once become          
immediately vested and exercisable.  This provision of the Plan could deter     
suitors from seeking business combinations with us that might otherwise be      
beneficial to our shareholders.                                                 

Director compensation                                                           

Under our Equity Incentive Plan, upon their election to our Board of  
Directors, non-employee directors are entitled to receive a grant of non-       
qualified stock options exercisable to purchase 125,000 shares of our common    
stock at an exercise price equal to the market value of our common stock on     
the date of grant.                                                              

Executive compensation                                                          

   The following table and discussions summarizes all compensation earned by
or paid to our Chief Executive Officer ("CEO") and the other most highly        
compensated executive officers for all services rendered in all capacities to   
us and our subsidiaries for each of our last three fiscal years.  However, no   
disclosure has been made for any executive officer, other than the CEO, whose   
total annual salary and bonus is less than $100,000.                            

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                                                        [Enlarge/Download Table]
                                      TABLE 1                                                              
                            SUMMARY COMPENSATION TABLE                                                     

                                                                           Long Term Compensation          
                                                                  ----------------------------------       
                                    Annual Compensation(1)              Awards              Payouts        
                                  --------------------------      ---------------------     -------        
                                                     Other                                     All         
                                                     Annual    Restricted                     Other        
Name and                                            Compen-      Stock                 LTIP   Compen-      
Principal                      Salary     Bonus     sation     Award(s)   Options/    Payouts   sation     
Position            Year         ($)       ($)      ($)(2)        ($)       SARs       ($)(#)   ($)        
---------------    -------    --------    -----    ---------  ----------  --------    -------     ------   
                                                                                                           

Peter Shandro, CEO  1999       $96,000     -0-        -0-         -0-      125,000      -0-        -0-     
                    ---------------------------------------------------------------------------------------

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Employment agreements                                                           

   To date, we do not have any written employment agreements with any of our
key personnel.  It is our intent to enter into such agreements with our key     
employees: Messrs. Shandro, Nickull, MacKenzie and Hoglund, as soon as          
possible.                                                                       

We have entered into lock-up and vesting agreements with certain key  
personnel pursuant to which their shares of common stock are subject to         
vesting over a two year period ending August 2001.  It is our intent that       
these agreements will provide additional incentive to those employees to        
continue devoting their efforts and resources to our success until such time    
as their shares of our common stock have become fully vested.                   

Indemnification and limitation on liability of directors                        

Our Articles of Incorporation provide that we shall indemnify, to the 
fullest extent permitted by Colorado law, any of our directors, officers,       
employees or agents who are made, or threatened to be made, a party to a        
proceeding by reason of the former or present official position of the person,  
which indemnity extends to any judgments, penalties, fines, settlements and     
reasonable expenses incurred by the person in connection with the proceeding    
if certain standards are met.  At present, there is no pending litigation or    
proceeding involving any of our directors, officers, employees or agents where  
indemnification will be required or permitted.  Insofar as indemnification for  
liabilities arising under the Securities Act of 1933 may be permitted to our    
directors, officers and controlling persons pursuant to the foregoing           
provisions, or otherwise, we have been advised that, in the opinion of the      
Securities and Exchange Commission, such indemnification is against public      
policy as expressed in the Securities Act and is, therefore, unenforceable.     

   Our Articles of Incorporation limit the liability of our directors to the
fullest extent permitted by the Colorado Business Corporation Act.              
Specifically, our directors will not be personally liable for monetary damages  
for breach of fiduciary duty as directors, except for:                          

*    any breach of the duty of loyalty to us or our stockholders,     
*    acts or omissions not in good faith or that involved intentional 
misconduct or a knowing violation of law,                   
*    dividends or other distributions of corporate assets that are in 
   contravention of certain statutory or contractual restrictions,
*    violations of certain laws, or                                   
   *    any transaction from which the director derives an improper personal
benefit.                                                    

Liability under federal securities law is not limited by the Articles.          

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Certain Relationships And Related Transactions  

Founders - XML - Global                                                         

   When we were first organized in 1991, we issued a total of 500,000 shares
of our common stock to a total of 11 investors in consideration of a purchase   
price of $.0003 per share.  The following sets forth the names and the number   
of shares, giving retroactive effect to a 10-for-1 forward split, received by   
persons who would be considered promoters:                                      

                                                                [Download Table]


Name                    Number of Shares
                                        
Matthew J. Kavanaugh          2,550,000 
Terry Whiteside                 500,000 
Marshal Griffin                 500,000 
Equitas Corp.                   900,000 


Founders - XML Nevada; the reorganization                                       

  In May 1999, XML Nevada was organized through the issuance of 12,500,000
shares of common stock and the simultaneous acquisition of certain              
intellectual property and other assets.  XML Nevada also formed a wholly owned  
subsidiary, XML Research, which in turn acquired 100% of the outstanding stock  
of Walkabout Websites.  The purpose of these transactions was to consolidate    
all of the intellectual property and other assets contributed by Messrs.        
Nickull, MacKenzie, Hoglund and Palethorpe into one entity, XML Nevada.  The    
persons who would be deemed founders of XML Nevada, and the number of shares    
of common stock received by each, is set forth below:                           

                                                                [Download Table]

Name                         Number of Shares
                                             

Duane Nickull                 2,000,000 *    
Matt MacKenzie                1,500,000 *    
Jamie Hoglund                 1,500,000 *    
Peter Shandro                   735,000      
Simon Anderson                  200,000      
Michael Palethorpe              200,000 **   


_________________                                                               

*    Subject to vesting agreements over a two year period ending August 2001.   
**   Mr. Palethorpe left the Company in February 2000 and surrendered 600,000   
of his shares for cancellation.                                       

  In August 1999, XML Global (then known as International Capital Funding,
Inc.) acquired 100% of the issued and outstanding shares of common stock of     
XML Nevada.  In that transaction, all 12,500,000 shares of XML Nevada were      
exchanged on a one-for-one basis for 12,500,000 shares of XML Global, which     
then represented approximately 71% of the total issued and outstanding shares   
of common stock of XML Global.                                                  

DataXchg, Inc.                                                                  

   In 1999, we formed and organized a new company called DataXchg, Inc.  40%
of the equity securities of DataXchg, Inc. was held by us and 60% was held by   
David Webber.  At that time, David Webber also became a member of our Board of  
Directors and a consultant.                                                     

   Upon its organization, David Webber assigned to DataXchg, Inc. all of the
patents, patent rights and other intellectual property owned by them related    
to the Xchg product, an e-business to e-business interchange solution that      
permits the conversion of standard EDI documents into an XML format.  As part   
of the arrangement, DataXchg, Inc. granted to XML Global an exclusive           
worldwide license to market, sell and sublicense the expressXCHG product to     
end users, for which DataXchg, Inc. is entitled to a variable royalty           
depending upon the nature and configuration of the product marketed and sold.   

In June, 2000, we acquired the remaining 60% of DataXchg, Inc. in     
exchange for the issuance to Mr. Webber of 1,000,000 shares of our common       
stock.                                                                          

XMLFund, LLC                                                                    

 In January 2000, we sold to XMLFund, LLC an unrelated party, a total of
500,000 Units of our securities at a price of $2.00 per Unit, for a total cash  
consideration of $1,000,000.  Each Unit consisted of two shares of our common   
stock, one Warrant exercisable for three years to purchase an additional share  
of common stock at an exercise price of $2.00 per share, and a second Warrant   
exercisable for 60 days to purchase an additional share of our common stock at  
an exercise price of $.07 per share.  In March 2000, XMLFund, LLC exercised     
warrants to purchase 500,000 shares of our common stock at an exercise price    
of $.07 per share.  The managing partner of XMLFund, David Pool agreed to       
become a member of our Board of Directors subject to our obtaining directors    
and officers liability insurance.  In addition, XMLFund, LLC was granted a      
limited preemptive right on certain future financings that we may undertake.    
By virtue of this limited preemptive right, XMLFund, LLC purchased in April     
2000 100,000 units at a price of $1.00 per unit, each unit consisting of one    
share of our common stock and one warrant exercisable until December 31, 2000   
to purchase an additional share of common stock at an exercise price of $4.00   
per share.  Further, pursuant to the preemptive right, in April 2000 XMLFund,   
LLC purchased 8.5 units at a price of $75,000 per unit, each unit consisting    
of 50,000 shares of our common stock and warrants exercisable to purchase an    
additional 50,000 shares of our common stock for 18 months at an initial        
exercise price of $4.00 per share.  This preemptive right will terminate upon   
our completion of an initial public offering.                                   

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Security Ownership of Management And Principal Stockholders 

The following table sets forth information with respect to beneficial 
ownership of our common stock by:                                               

  *    each person who beneficially owns more than 5% of the common stock;
*    each of our executive officers named in the Management section;  
*    each of our Directors; and                                       
*    all executive officers and Directors as a group.                 

The table shows the number of shares owned as of November 1, 2000 and the       
percentage of outstanding common stock owned as of November 1, 2000.  Each      
person has sole voting and investment power with respect to the shares shown,   
except as noted.                                                                

                                                                [Download Table]

                                                  Percentage of Outstanding
                                                        Shares Owned(2)    
                                                  -------------------------
                              Number of Shares                             
                              of Common Stock                              
 Name and Address              Beneficially                 Current        
of Beneficial Owner                Owned                 (as of 9/1/00)    
-------------------           -----------------   -------------------------
                                                                           

Duane Nickull                 2,125,000                7.7%                

Peter Shandro                   860,000                3.1%                

Simon Anderson                  325,000                1.2%                

Matt MacKenzie                1,625,000                5.9%                

Jamie Hoglund                 1,600,000                5.8%                

Gordon Ebanks                       -0-                -0-                 

Dick Hardt                      125,000                nil                 

Matthew J. Kavanaugh                                                       
3140 South Peoria Street                                                   
Unit K-230                                                                 
Aurora, Colorado  80014       1,950,000                7.1%                

XML Fund, LLC                                                              
777 108th Avenue, N.E.,                                                    
Suite 1800                                                                 
Bellevue, WA  98004           3,050,000                11.1%               

All Officers and Directors                                                 
as a Group (7 persons)        6,655,000                23.8%               


Beneficial ownership is based on information provided to us, and the  
beneficial owner has no obligation to inform us of or otherwise report any      
changes in beneficial ownership.  Except as indicated, and subject to           
community property laws when applicable, the persons named in the table above   
have sole voting and investment power with respect to all shares of common      
stock shown as beneficially owned by them.                                      

The percentages shown are calculated based upon 27,505,000 shares of  
common stock outstanding on September 1, 2000.  In calculating the percentage   
of ownership, unless as otherwise indicated, all shares of common stock that    
the identified person or group had the right to acquire within 60 days of       
September 1, 2000 upon the exercise of options and warrants are deemed to be    
outstanding for the purpose of computing the percentage of shares of common     
stock owned by such person or group, but are not deemed to be outstanding for   
the purpose of computing the percentage of the shares of common stock owned by  
any other person.                                                               

  Unless otherwise stated, the beneficial owner's address is 1818 Cornwall
Avenue, Suite 9, Vancouver, British Columbia  V6J 1C7 Canada.                   

We have granted options to purchase shares of our common stock to our 
executive officers.  Mr. Nickull was granted options to purchase 125,000        
shares, Mr. Shandro was granted options to purchase 125,000, Mr. Anderson was   
granted options to purchase 125,000 shares, Mr. MacKenzie was granted options   
to purchase 125,000 shares and Mr. Hoglund was granted options to purchase      
100,000 shares.  The number of shares of common stock shown on the foregoing    
table as being beneficially owned by each of these persons includes the shares  
of common stock underlying these options.                                       

  XML Fund, LLC is a private investment fund that has warrants to purchase
500,000 shares of common stock at an exercise price of $2.00 per share.         
Voting and investment power with respect to its Securities is exercised by      
David Pool, the Manager of the Fund. The Fund's ownership includes warrants to  
purchase an additional 100,000 of common stock at an exercise price of $4.00    
per share and Warrants exercisable to purchase an additional 425,000 shares of  
common stock at an initial exercise price of $4.00 per share until April 6,     
2001 and thereafter at an exercise price of $6.00 per share.                    

  Mr. David Pool, the Manager of XML Fund, has agreed to become a director
subject to our obtaining directors' and officers' liability insurance.  Upon    
his election and including the securities owned by XML Fund, the directors and  
officers of the company as a group will consist of six persons, and will be     
the beneficial owners of 9,585,000 shares, representing 34.8% of the total      
issued and outstanding shares of our common stock.                              

Lock-up and Vesting Agreements                                                  

  Messrs. Nickull, Shandro, MacKenzie and Hoglund have each entered into a
Lock-up and Vesting Agreement pursuant to which all of the shares of our        
common stock which they own are subject to being returned and forfeited if      
their employment terminates.  Under the vesting schedule, their shares will     
vest on August 29, 2001.  Until the shares are vested, they may not be sold.    
If the person's employment with the company is terminated before the vesting    
date, all unvested shares will be forfeited and revert to our authorized but    
unissued shares of common stock.                                                

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Additional Information  

   We file annual, quarterly and special reports, proxy statements and other
information with the Commission.  You may read and copy any document we file    
at the Commission's Public Reference Rooms in Washington, D.C., New York, New   
York, and Chicago, Illinois.  Please call the Commission at 1-800-SEC-0330 for  
further information on the Public Reference Rooms.  You can also obtain copies  
of our Commission filings by going to the Commission's Website at               
http://www.sec.gov.                                                             

 We have filed with the Commission a Registration Statement on Form SB-2
to register the shares of our common stock and common stock warrants to be      
sold by the Selling Securityholders and issued pursuant to the exercise of the  
warrants.  This Prospectus is part of that Registration Statement and, as       
permitted by the Commission's rules, does not contain all of the information    
set forth in the Registration Statement.  For further information about us or   
our common stock, you may refer to the Registration Statement and to the        
exhibits filed as part of the Registration Statement.  You can review a copy    
of the Registration Statement and its exhibits at the public reference rooms    
maintained by the Commission and on the Commission's Website as described       
above.                                                                          

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Selling Securityholders 

   The Selling Securityholders are offering to sell 24,335,000 shares of our
common stock.  None of the Selling Securityholders has, or within the past      
three years has had, any position, office or other material relationship with   
us or any of our predecessors or affiliates, except as noted.                   

Of the securities being offered,                                      

*    5,000,000 shares of common stock are being offered by Selling    
      Securityholders who were the original shareholders of ICF prior to
the reverse merger and reorganization, and their assignees, 

*    2,330,000 shares of common stock and warrants to purchase an     
      additional 2,330,000 shares of common stock were sold in a private
offering which closed in August 1999,                       

   *    warrants to purchase 200,000 shares of common stock were issued to a
consultant,                                                 

*    1,600,000 shares of common stock and warrants to purchase an     
    additional 600,000 shares of common stock were issued to the XML
Fund, LLC, an institutional investor,                       

*    1,050,000 shares of our common stock and warrants to purchase an 
    additional 1,050,000 shares of our common stock were issued in a
      private transaction to a private trust and an individual investor,

*    4,625,000 shares of our common stock and warrants to purchase an 
   additional 4,625,000 shares of our common stock were sold to 50
     accredited investors in a private offering which was completed in
April 2000 and                                              

 *    462,500 shares of common stock and an additional 462,500 shares of
    common stock issuable upon exercise of warrants included in 9.25
 units of our securities which may be purchased by Westminster
      Securities Corp. upon exercise of its unit purchase option granted
     in connection with a private offering which we completed in April
2000.                                                       

The following table lists the Selling Securityholders eligible to sell
shares of common stock under this Prospectus, the number of shares              
beneficially owned by each Selling Securityholder prior to this offering, and   
the maximum number of shares each Selling Securityholder may sell under this    
Prospectus.  We will not receive any of the proceeds from the sale of our       
common stock by the Selling Securityholders.  The number of shares owned by     
each Selling Securityholder after the offering will depend upon the number of   
shares actually sold by each Selling Securityholder.                            

                                                                [Download Table]


                      Number of     Maximum      Number of           
                       Shares      Number of      Shares             
                    Beneficially Shares to be  Beneficially          
                     Owned Prior    Sold in     Owned after          
                   to Offering(1)  Offering      Offering     Percent
                    ------------- -----------   -----------   -------
                                                                     
Amherst Group               500         500             -0-      0%  

AMRO International,                                                  
 SA(7)                1,300,000   1,300,000             -0-      0%  
Antilles Partners,                                                   
 LP(7)                  200,000     200,000             -0-      0%  

Aspen Gold Group,                                                    
 Inc.(7)                 50,000      50,000             -0-      0%  

Austost Anstalt                                                      
 Schaan(7)              500,000     500,000             -0-      0%  

Glenn Bailey(4)          50,000      50,000             -0-      0%  

Balmore, SA(7)          500,000     500,000             -0-      0%  

Bank Von Ernst(4)       260,000     260,000             -0-      0%  

Banqe Ippa & Associes,                                               
 Luxemberg(4)            70,000      70,000             -0-      0%  

Banque Julius Baer & Co.                                             
  Ltd., Zurich(4)        80,000      80,000             -0-      0%  

Bruce Barr(4)           200,000     200,000             -0-      0%  

John Barsoli(7)          50,000      50,000             -0-      0%  

Chris Battensbury           500         500             -0-      0%  

Bayonet Capital,                                                     
 LLC(7)             1,000,000      1,000,000            -0-      0%  

Aleta M. and Layton M.                                               
  Bennett, JTRS(7)       50,000      50,000             -0-      0%  

John Bradley                500         500             -0-      0%  

Carolyn Brewer              500         500             -0-      0%  

Mark Brewer                 500         500             -0-      0%  

Brewin Nominees                                                      
 Ltd.(4)                 40,000      40,000             -0-      0%  

Whitney Briscoe             500         500             -0-      0%  

Steve Calandrella           500         500             -0-      0%  

Darryl S. Caplan(7)     200,000     200,000             -0-      0%  

Vincent Capodanno(7)               100,000         100,000     -0- 0%

Ronald Carlile              500         500             -0-      0%  

Susan Carlile               500         500             -0-      0%  

Stuart Carmichael           500         500             -0-      0%  

Shannon Carthy            1,000       1,000             -0-      0%  

Patrick Churchill(4)    120,000     120,000             -0-      0%  

Glen Roth, Inc.(7)       50,000      50,000             -0-      0%  

Richard Cober               500         500             -0-      0%  

Jonathan Cohen          200,000     200,000             -0-      0%  

Credit Suisse                                                        
 (Guernsey) Ltd.(4)     160,000     160,000             -0-      0%  

Crypto Corporation(7)   100,000     100,000             -0-      0%  

CSPS, Inc.(7)           100,000     100,000             -0-      0%  

Cycad Limited(7)        200,000     200,000             -0-      0%  

Mark DeGeorge(7)         50,000      50,000             -0-      0%  

Mark DeStefano(7)        50,000      50,000             -0-      0%  

Jim Dixon                   500         500             -0-      0%  

Randy Doherty               500         500             -0-      0%  

Thomas Donino(7)        100,000     100,000             -0-      0%  

Don Elving                  500         500             -0-      0%  

Jennifer Enslein                                                     
 Trust(7)                50,000      50,000             -0-      0%  

Equitas Corp.           900,000     900,000             -0-      0%  

Karen Ewenson               500         500             -0-      0%  

Harry Faircloth             500         500             -0-      0%  

Charles Fowler(4)        50,000      50,000             -0-      0%  

Scott Bradley                                                        
 Frisoli(7)             100,000     100,000             -0-      0%  

Golden Securities(4)    400,000     400,000            -0-       0%  

Norman Goldstein &                                                   
 James Jorasch,                                                      
  JTEN(7)                50,000      50,000             -0-      0%  

Anthony Griffin          10,000      10,000             -0-      0%  

Dan Griffin                 500         500             -0-      0%  

Gayle Griffin               500         500             -0-      0%  

Marshal Griffin         500,000     500,000             -0-      0%  

George E.                                                            
 Groehsl (7)             50,000      50,000             -0-      0%  

Ms. H.R. Griffiths        1,000       1,000             -0-      0%  

Rick Griffiths              500         500             -0-      0%  

Egbert Hardenbol(4)      70,000      70,000             -0-      0%  

Paul Hazlett                500         500             -0-      0%  

HB Trading, Inc.(7)     100,000     100,000             -0-      0%  

Scott Hean                2,000       2,000             -0-      0%  

Alex Herman             250,000     250,000             -0-      0%  

Justin Hilbert(4)        50,000      50,000             -0-      0%  

Sheila Hirsch               500         500             -0-      0%  

Steven Hirsch(7)        100,000     100,000             -0-      0%  

Richard Ilich(7)         50,000      50,000             -0-      0%  

International                                                        
 Distribution Corp.(4)  100,000     100,000             -0-      0%  

Mike James                  500         500             -0-      0%  

Debra Jeske                 500         500             -0-      0%  

T. J. Jesky (7)          50,000      50,000             -0-      0%  

Keith Johnson            10,000      10,000             -0-      0%  

Matthew J. Kavanaugh  1,950,000   1,950,000             -0-      0%  

Brent King                  500         500             -0-      0%  

Frank L. Kramer (7)      50,000      50,000             -0-      0%  

Ross Kramer                 500         500             -0-      0%  

John Kubiak                 500         500             -0-      0%  

Laiy, Ltd.              600,000     600,000             -0-      0%  

Ken Lee(4)               20,000      20,000             -0-      0%  

Jon Lerner (7)          100,000     100,000             -0-      0%  

Lloyds Bank PL1(4)       50,000      50,000             -0-      0%  

Jim Locke(4)             10,000      10,000             -0-      0%  

Daniel Luskind (7)       50,000      50,000             -0-      0%  

Eugene & Eileen                                                      
 Lynch (7)               50,000      50,000             -0-      0%  

Mabcrown, Inc.(7)       600,000     600,000             -0-      0%  

Magellan International,                                              
 Ltd.(7)                200,000     200,000             -0-      0%  

John B. Marsala (7)      50,000      50,000             -0-      0%  

William Marshall,                                                    
 Jr.(4)                 200,000     200,000             -0-      0%  

Dan McCracken               500         500             -0-      0%  

Ian McDougall               500         500             -0-      0%  

Rob McKay                   500         500             -0-      0%  

Joseph P. McKenna           500         500             -0-      0%  

Jeffrey McLaughlin (7)   50,000      50,000             -0-      0%  

Melborne Investment                                                  
 Ltd.(4)                300,000     300,000             -0-      0%  

Stephan Moses(4)         70,000      70,000             -0-      0%  

Dale B. Newburg (7)     100,000     100,000             -0-      0%  

Arthur J. Niebauer (7)   50,000      50,000             -0-      0%  

Rick Nilsson                500         500             -0-      0%  

Nottinghill Resources,                                               
 Ltd.(4)              1,000,000   1,000,000             -0-      0%  

John P. O'Shea (7)      250,000     250,000             -0-      0%  

Gene Paul Percudani(7)   50,000      50,000             -0-      0%  

Duane Peterson          250,000     250,000             -0-      0%  

Christine Platt(9)        1,000       1,000             -0-      0%  

Providence Securities                                                
     (Bahamas) Ltd.(4)  470,000     470,000             -0-      0%  

M. Psarompa(4)          200,000     200,000             -0-      0%  

Thomas Relling              500         500             -0-      0%  

David J. Ritchie (7)    100,000     100,000             -0-      0%  

Mark Robertson (7)      100,000     100,000             -0-      0%  

Ropart Investments,                                                  
 LLC (7)                200,000     200,000             -0-      0%  

Mark C. Ross(4)         200,000     200,000             -0-      0%  

Christian Russenberger  100,000     100,000             -0-      0%  

Phil Sancken                500         500             -0-      0%  

August B. Schwarz (7)    50,000      50,000             -0-      0%  

Ralf P. Schwarz (7)     200,000     200,000             -0-      0%  

Adam Shandro(9)           1,000       1,000             -0-      0%  

Andrew Shandro(9)           500         500             -0-      0%  

Matthew Shandro(9)          500         500             -0-      0%  

Robert E. Smith           1,000       1,000             -0-      0%  

Smithson Ventures (7)   100,000     100,000             -0-      0%  

Troy Straith                500         500             -0-      0%  

Gary Sukovaty               500         500             -0-      0%  

Craig Taubman               500         500             -0-      0%  

Gene Taubman                500         500             -0-      0%  

Tech-Trade Capital,                                                  
 LLC (7)                 50,000      50,000             -0-      0%  

Jay Teitelbaum (7)      100,000     100,000             -0-      0%  

Genell Thorn                500         500             -0-      0%  

Tomasovich Family                                                    
 Trust(6)             2,000,000   2,000,000             -0-      0%  

Gary Triesman               500         500             -0-      0%  

Union Bancaire(4)       170,000     170,000             -0-      0%  

Hans van der Griend         500         500             -0-      0%  

Mark van der Griend(7)  100,000     100,000             -0-      0%  

Vestcom, Ltd.(7)         50,000      50,000             -0-      0%  

Willi Vogl                  500         500             -0-      0%  

Cameron Watt (4)         50,000      50,000             -0-      0%  

Willie West, for and                                                 
 on behalf of(4)                                                     
 Toucan International                                                
 Investments             20,000      20,000             -0-      0%  

West Capital &                                                       
 Associates (7)         100,000     100,000             -0-      0%  

Westminster Securities                                               
 Corp.(8)               925,000     925,000             -0-      0%  

Lane Whiteside              500         500             -0-      0%  

Terry Whiteside         500,000     500,000             -0-      0%  

E. Evelyn Williamson(4) 200,000     200,000             -0-      0%  

Ashley Wills                500         500             -0-      0%  

John Wills                  500         500             -0-      0%  

Albert Wouters(4)        50,000      50,000             -0-      0%  

XML Fund, LLC(5)(7)   3,050,000   3,050,000             -0-      0%  

Louis Zauderer(7)       400,000     400,000             -0-      0%  

Scott Ziegler(7)        100,000     100,000             -0-      0%  


___________________                                                             

(1)  The number of shares indicated includes shares acquired directly from us   
  by the Selling Securityholders as well as shares which are issuable upon
the exercise of warrants held by the Selling Securityholders.         

(2)  Beneficial ownership is based on information provided to us, and the       
beneficial owner has no obligation to inform us of or otherwise report
   any changes in beneficial ownership.  Except as indicated, and subject to
 community property laws when applicable, the persons named in the table
   above have sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them.                     

(3)  The percentages shown are calculated based upon 27,505,000 shares of       
common stock outstanding on September 30, 2000.  In calculating the   
percentage of ownership, unless as otherwise indicated, all shares of 
   common stock that the identified person or group had the right to acquire
within 60 days of September 30, 2000 upon the exercise of options and 
warrants are deemed to be outstanding for the purpose of computing the
 percentage of shares of common stock owned by such person or group, but
are not deemed to be outstanding for the purpose of computing the     
percentage of the shares of common stock owned by any other person.   

(4)  The selling shareholder was an investor in the Company's private offering  
which closed in August 1999.  In the offering, the selling shareholder
purchased for $1.00 a unit consisting of one share of common stock and
 one warrant exercisable to purchase an additional share of common stock
at an exercise price of $4.00 per share.                              

(5)  XML Fund, LLC is a private investment fund whose manager is David Pool.    
Mr. Pool has agreed to join our board of directors subject to our     
 obtaining directors and officers liability insurance.  In January 2000,
  the XML Fund purchased 500,000 units at a price of $2.00 per unit.  Each
   unit consisted of two shares of common stock, one Class A warrant and one
Class A-1 warrant.  Each Class A warrant entitles XML Fund to purchase
 one additional share of common stock at a price of $2.00 per share, and
   each Class A-1 warrant entitled XML Fund to purchase one additional share
 of common stock at a price of $0.07 per share.  The term of the Class A
warrants is three years and the term of the Class A-1 warrants was 60 
 days.  The Class A-1 warrants were exercised in March 2000.  As part of
its agreement, XML Fund has a preemptive right to subscribe for and   
   purchase its proportionate share of future offerings in order to maintain
 its percentage equity interest in the Company.  In April 2000, XML Fund
purchased 100,000 units at a price of $1.00 per unit.  Each unit      
consisted of one share of common stock and one warrant.  Each warrant 
entitles XML Fund to purchase one additional share of common stock at 
$4.00 per share.  The warrants expire on December 31, 2000.           

(6)  Includes warrants exercisable until December 31, 2000 to purchase          
   1,000,000 shares of common stock at an exercise price of $4.00 per share.

(7)  The selling shareholder was an investor in the Company's private offering  
which closed in April 2000.  In the offering, the selling shareholder 
purchased units for $75,000 per unit, each unit consisting of 50,000  
   shares of common stock and 50,000 warrants.  The warrants are exercisable
until October 2001 to purchase an additional share of common stock,   
initially at an exercise price of $4.00 per share and beginning April 
2001 and thereafter at an exercise price of $6.00 per share.  As an   
investor in the April 2000 private offering, the selling shareholder  
  agreed to the following restriction on resales of securities:  Until the
earlier of three months following the date of this prospectus or      
 September 6, 2000, the selling shareholder agreed not to make any sales
 of our securities.  Thereafter, the selling shareholder agreed to limit
   sales of our securities to 25% of shares of common stock purchased by the
   selling shareholder in our April 2000 offering during each 90 day period.
With respect to shares of common stock which may be acquired by the   
selling shareholder upon exercise of warrants, the selling shareholder
 has agreed not to sell those shares of common stock until 30 days after
 the date of this prospectus and thereafter limit resales of such shares
of common stock to 25% of such shares owned by the selling shareholder
during each 90 day period.                                            

(8)  Consists of shares of common stock issuable upon exercise of an option to  
   buy up to 9.25 of the units sold in our April 2000 offering at a price of
$75,000 per unit.  Westminster was granted the option as partial      
consideration of its services as our placement agent in the offering. 
Does not include 175,000 shares of common stock and 175,000 warrants  
 owned by John P. O'Shea, a principal of Westminster, which he purchased
 as an investor in our April 2000 private offering.  Securities acquired
   by Westminster are subject to the same restrictions on resale as apply to
securities sold in the offering and described in Note 7.              

(9)  The following familial relationships exist between certain selling         
securityholders and the Company's management.  Christine Platt is the 
   daughter-in-law of Peter Shandro.  Adam Shandro and Patrick Churchill are
   nephews of Peter Shandro.  Andrew Shandro and Matthew Shandro are sons of
Peter Shandro.                                                        

  We will pay all expenses to register the shares, except that the Selling
Securityholders will pay any underwriting and brokerage discounts, fees and     
commissions, specified attorneys' fees and other expenses to the extent         
applicable to them.                                                             

We have agreed to indemnify the Selling Securityholders and certain   
affiliated parties against specified liabilities, including liabilities under   
the Securities Act, as amended, in connection with this offering.  The Selling  
Securityholders have agreed to indemnify us and our directors and officers, as  
well as any persons controlling our Company, against certain liabilities,       
including liabilities under the Securities Act.  Insofar as indemnification     
for liabilities under the Securities Act may be permitted to our directors or   
officers, or persons controlling our Company, we have been advised that in the  
opinion of the SEC this kind of indemnification is against public policy as     
expressed in the Securities Act and is, therefore, unenforceable.               

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Use of Proceeds 

   We will not receive any proceeds when Selling Securityholders sell shares
of common stock  under this Prospectus.  We have previously received proceeds   
from the sale of the common stock and warrants and may receive proceeds from    
the exercise of the warrants.                                                   

   If we receive proceeds from the exercise of warrants, it will be used for
general working capital purposes.                                               

Plan of Distribution  

   This Prospectus covers the sale of shares of common stock pursuant to the
exercise of outstanding warrants held by the Selling Securityholders as well    
as the resale by those Selling Securityholders of additional shares of our      
common stock which they have already purchased from us.                         

Selling Securityholders may sell their shares of common stock either  
directly or through a broker-dealer or other agent at prices related to         
prevailing market prices or  negotiated prices, in one or more of the           
following kinds of transactions:                                                

*    Transactions in the over-the-counter market if a public trading  
market develops;                                            

*    A block trade in which a broker or dealer will attempt to sell   
      shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction.                 

  *    Purchases by a broker or dealer as principal and resale by a broker
or dealer for its account.                                  

 *    Ordinary brokerage transactions and transactions in which a broker
solicits a buyer.                                           

*    In privately negotiated transactions not involving a broker or   
dealer.                                                     

Broker-dealers or agents may purchase shares directly from a Selling  
Securityholder or sell shares to someone else on behalf of a Selling            
Securityholder.  Broker-dealers may charge commissions to both Selling          
Securityholders selling common stock, and purchasers buying shares sold by a    
Selling Securityholder.  If a broker buys shares directly from a Selling        
Securityholder, the broker may resell the shares through another broker, and    
the other broker may receive compensation from the Selling Securityholder for   
the resale.                                                                     

 To the extent required by laws, regulations or agreements we have made,
we will use our best efforts to file a Prospectus supplement during the time    
the Selling Securityholders are offering or selling shares covered by this      
Prospectus in order to add or correct important information about the plan of   
distribution for the shares.                                                    

In addition to any other applicable laws or regulations, Selling      
Securityholders must comply with regulations relating to distributions by       
Selling Securityholders, including Regulation M under the Securities Exchange   
Act of 1934, as amended.  Regulation M prohibits Selling Securityholders from   
offering to purchase or purchasing our common stock at certain periods of time  
surrounding their sales of shares of our common stock under this Prospectus.    

   Some states may require that registration, exemption from registration or
notification requirements be met before Selling Shareholders may sell their     
common stock.  Some states may also require Selling Securityholders to sell     
their common stock only through broker-dealers.                                 

There is no assurance that a public market for our common stock will develop    

  There has been no public market for our common stock.  We cannot predict
the extent to which investor interest in our common stock will lead to the      
development of a trading market or how liquid that market might become,         
especially if a large number of shares were introduced into the market upon     
exercise of options or warrants.  If a market does develop, the price for our   
common stock may be highly volatile and may bear no relationship to our actual  
financial condition or results of operations.                                   

Our public trading market, if and when it develops, will likely be highly       
volatile                                                                        

We have applied to have our common stock quoted on the OTC Electronic 
Bulletin Board, a NASD sponsored and operated quotation system for equity       
securities.  It is a more limited trading market than the Nasdaq SmallCap       
Market, and timely, accurate quotations of the price of our common stock may    
not always be available.  You may expect trading volume to be low in such a     
market.  Consequently, the activity of only a few shares may affect the market  
and may result in wide swings in price and in volume.                           

Once our common stock is listed on the OTC Bulletin Board, it will be 
subject to the requirements of Rule 15g.9, promulgated under the Securities     
Exchange Act as long as the price of our common stock is below $5.00 per        
share.  Under such rule, broker-dealers who recommend low-priced securities to  
persons other than established customers and accredited investors must satisfy  
special sales practice requirements, including a requirement that they make an  
individualized written suitability determination for the purchaser and receive  
the purchaser's consent prior to the transaction.  The Securities Enforcement   
Remedies and Penny Stock Reform Act of 1990 also requires additional            
disclosure in connection with any trades involving a stock defined as a penny   
stock.  Generally, the Commission defines a penny stock as any equity security  
not traded on an exchange or quoted on Nasdaq that has a market price of less   
than $5.00 per share.  The required penny stock disclosures include the         
delivery, prior to any transaction, of a disclosure schedule explaining the     
penny stock market and the risks associated with it.  Such requirements could   
severally limit the market liquidity of the securities and the ability of       
purchasers to sell their securities in the secondary market.                    

 If a public trading market does develop, the market price of our common
stock could fluctuate substantially due to:                                     

*    quarterly fluctuations in operating results                      
 *    announcements of new products or product enhancements by us or our
  competitors technological innovations by us or our competitors
*    general market conditions or market conditions specific to our or
our customers' industries                                   
*    changes in earnings estimates or recommendations by analysts.    

   Stock prices of Internet related companies have been highly volatile.  In
the past, following periods of volatility in the market price of a company's    
securities, securities class action litigation has at times been instituted     
against that company.  If we become subject to securities litigation, we could  
incur substantial costs and experience a diversion of management's attention    
and resources.                                                                  

Future sales of our common stock and preferred stock could adversely affect     
the market                                                                      

Future sales of our common stock into the market may also depress the 
market price of our common stock if one develops in the future.  We have        
issued common stock, options and warrants to purchase our common stock.  Sales  
of these shares of our common stock or the market's perception that these       
sales could occur may cause the market price of our common stock to fall.       
These sales also might make it more difficult for us to sell equity or equity   
related securities in the future at a time and price that we deem appropriate   
or to use equity as consideration for future acquisitions.                      

We have the authority to issue up to 100,000,000 shares of preferred  
stock without shareholder approval.  The issuance of preferred stock by our     
Board of Directors could adversely affect the rights of the holders of our      
common stock.  An issuance of preferred stock could result in a class of        
outstanding securities that would have preferences with respect to voting       
rights and dividends and in liquidation over the common stock and could, upon   
conversion or otherwise, have all of the rights of our common stock.  Our       
Board of Directors' authority to issue preferred stock could discourage         
potential takeover attempts or could delay or prevent a change in control       
through merger, tender offer, proxy contest or otherwise by making these        
attempts more difficult or costly to achieve.                                   

A change of control of the company will result in the vesting of all            
outstanding stock options issued under our plan                                 

   Under the terms of our Equity Incentive Plan, in the event there occurs a
change of control of the Company, all outstanding and unvested stock options    
previously granted to our employees, officers, directors and consultants will   
immediately become vested and exercisable in their entirety.  This vesting      
acceleration could deter parties from pursuing business combinations with us    
that might otherwise be beneficial to our shareholders.                         

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Description of Securities 

Common stock                                                                    

  We are authorized to issue 500,000,000 shares of common stock, par value
$.0001 per share.  Except as otherwise expressly provided by law, and subject   
to the voting rights provided to the holders of preferred stock by our          
Articles of Incorporation, as amended, the common stock shall have voting       
rights on all matters requiring a vote of stockholders, voting together with    
the holders of preferred stock, as one class.  Each share of common stock       
issued and outstanding shall be identical in all respects one with the other,   
and no dividends shall be paid on any shares of common stock unless the same    
is paid on all shares of common stock outstanding at the time of such payment.  
Except for and subject to those rights expressly granted to the holders of the  
preferred stock, or except as may be provided by the laws of the State of       
Colorado, the holders of common stock shall have exclusively all other rights   
of stockholders.  There is no cumulative voting with respect to the election    
of Directors, with the result that the holders of more than 50% of the shares   
voting for the election of Directors can elect all of the Directors.  The       
holders of common stock are entitled to receive dividends if declared by the    
Board of Directors out of funds legally available for them.  In the event of    
liquidation, dissolution or winding up of the Company, the holders of common    
stock are entitled to share ratably in all assets remaining which are           
available for distribution to them after payment of liabilities and after       
provision has been made for each class of stock, if any, having preference      
over the common stock.  Holders of shares of common stock, as such, have no     
conversion, preemptive or other subscription rights, and there are no           
redemption provisions applicable to the common stock.                           

Preferred stock                                                                 

We are authorized to issue 100,000,000 shares of preferred stock, par 
value $.01 per share.  Our preferred stock can be issued in one or more series  
as may be determined from time-to-time by our Board of Directors.  In           
establishing a series our Board of Directors shall give to it a distinctive     
designation so as to distinguish it from the shares of all other series and     
classes, shall fix the number of shares in such series, and the preferences,    
rights and restrictions thereof.  All shares of any one series shall be alike   
in every particular.  Our Board of Directors has the authority, without         
stockholder approval, to fix the rights, preferences, privileges and            
restrictions of any series of preferred stock including, without limitation:    

*    The rate of distribution                                         
 *    The price at and the terms and conditions on which shares shall be
redeemed                                                    
*    The amount payable upon shares for distributions of any kind     
*    Sinking fund provisions for the redemption of shares             
*    The terms and conditions on which shares may be converted if the 
    shares of any series are issued with the privilege of conversion
*    Voting rights except as limited by law                           

  Although we currently do not have any plans to issue shares of preferred
stock or to designate any series of preferred stock, there can be no assurance  
that we will not do so in the future.  As a result, we could authorize the      
issuance of a series of preferred stock which would grant to holders preferred  
rights to our assets upon liquidation, the right to receive dividend coupons    
before dividends would be declared to common stockholders, and the right to     
the redemption of such shares, together with a premium, prior to the            
redemption to common stock.  Our common stockholders have no redemption         
rights.  In addition, our Board could issue large blocks of voting stock to     
fend off unwanted tender offers or hostile takeovers without further            
stockholder approval.                                                           

Warrants and Options                                                            

We have outstanding warrants and options exercisable to purchase up to
10,719,000 shares of our common stock at prices that currently range from       
$1.00 to $5.00 per share.  Holders of the warrants and options do not possess   
any rights as stockholders of the Company.  Holders of the warrants and         
options have no voting, preemptive, liquidation or other rights of              
shareholders, and no dividends will be paid on the warrants, options or the     
shares underlying the warrants or options.  In the event of our liquidation,    
dissolution or winding up, the holders of the warrants and options will not be  
entitled to participate in the distribution of our assets.                      

Transfer agent                                                                  

 Our transfer agent is Corporate Stock Transfer, Inc., 3200 Cherry Creek
Drive South, Suite 430, Denver, Colorado 80209.  Their telephone number is      
(303) 282-5800.                                                                 

Reports to shareholders                                                         

We intend to furnish annual reports to shareholders which will include
audited financial statements reported on by our certified public accountants.   
In addition, we may issue unaudited quarterly or other interim reports to       
shareholders as we deem appropriate.  We will comply with the periodic          
reporting requirements imposed by the Securities Exchange Act of 1934.          

Legal Matters 

 The validity of the issuance of the common stock offered hereby will be
passed upon for us by Neuman & Drennen, LLC of Boulder, Colorado.               

Experts 

Our consolidated financial statements as of June 30, 2000 and 1999 and
for the year ended June 30, 2000 and the period from May 18, 1999 to June 30,   
1999 have been included herein in reliance on the report of Moss Adams, LLP,    
independent certified public accountants, appearing elsewhere  herein, given    
upon the authority of that firm as experts in auditing and accounting.          

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XML-Global Technologies, Inc. and Subsidiaries  

Independent Auditor's Report  
and 
Financial Statements  

June 30, 2000 and 1999  

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XML - GLOBAL TECHNOLOGIES, INC. AND SUBSIDIARIES  

TABLE OF CONTENTS 

JUNE 30, 2000 AND 1999  

                                                                        Page

INDEPENDENT AUDITOR'S REPORT . . . . . . . . . . . . . . . . . . . . . . . F-3  

CONSOLIDATED FINANCIAL STATEMENTS                                               

   Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

   Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . F-6

   Statement of Stockholders' Equity (Deficit) . . . . . . . . . . . . . F-7

   Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . F-9

   Notes to Consolidated Financial Statements. . . . . . . . . . F-11 - F-22

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INDEPENDENT AUDITOR'S REPORT  

To the Board of Directors and Stockholders                                      
XML - Global Technologies, Inc.                                                 

We have audited the accompanying consolidated balance sheet of XML - Global     
Technologies, Inc. and subsidiaries as of June 30, 2000 and 1999, and the       
related consolidated statements of operations, stockholders' equity, and cash   
flows for the year ended June 30, 2000 and the period May 18, 1999 (date of     
inception) to June 30, 1999. 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 audit.                                  

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 consolidated financial statements referred to above         
present fairly, in all material respects, the consolidated financial position   
of XML - Global Technologies, Inc. and subsidiaries as of June 30, 2000 and     
1999, and the results of their operations and their cash flows for the year     
ended June 30, 2000 and the period May 18, 1999 (date of inception) to June     
30, 1999 in conformity with generally accepted accounting principles.           

MOSS ADAMS LLP                                                                  

Bellingham, Washington                                                          
August 14, 2000                                                                 

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                                                                [Download Table]


                        XML - GLOBAL TECHNOLOGIES, INC.               
                          CONSOLIDATED BALANCE SHEET                  
                            JUNE 30, 2000 AND 1999                    

                                    ASSETS                            

                                            June 30,       June 30,   
                                              2000           1999     
                                            --------        -------   
                                                                      
CURRENT ASSETS                                                        
  Cash and cash equivalents               $  7,535,852   $      9,581 
  Investments in securities available                                 
     for sale                                1,000,000              - 
  Trade accounts receivable                     17,185          8,232 
  Other receivable                              53,653          3,509 
  Prepaid expenses                              11,869          4,658 
  Deferred income taxes                          2,622              - 
                                          -------------  -------------
       Total current assets                  8,621,181         25,980 

PROPERTY AND EQUIPMENT, net                    158,633         54,938 

INTANGIBLE ASSETS                                                     
  Intellectual property rights               1,250,000              - 
Trademarks and patents                          52,193          7,134 
                                           ------------  -------------

TOTAL ASSETS                              $ 10,082,007   $     88,052 
                                          =============  =============

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)        

CURRENT LIABILITIES                                                   

  Accounts payable and accrued liabilities $    95,999      $  55,182 
  Income taxes payable                           7,178              - 
  Due to directors                                   -          8,755 
  Note payable                                       -        135,135 
                                          -------------  -------------
       Total current liabilities               103,177        199,072 

STOCKHOLDERS' EQUITY (DEFICIT)                                        
  Preferred stock, $0.01 par value                                    
     100,000,000 shares authorized,                                   
     none issued and outstanding                                      
     at June 30, 2000 and June 30, 1999              -              - 
  Common stock, $.0001 par value,                                     
     500,000,000 shares authorized,                                   
     27,505,000 and 17,500,000 shares                                 
     issued and outstanding at June 30 2000                           
     and June 30, 1999, respectively             2,751          1,750 
  Additional paid-in capital                11,675,258          8,079 
  Accumulated other comprehensive income                              
     (loss)                                     (5,089)             - 
Accumulated deficit                         (1,694,090)      (120,849)
                                          -------------   ------------
       Total stockholders' equity (deficit)  9,978,830       (111,020)
                                          -------------   ------------

TOTAL LIABILITIES AND STOCKHOLDERS'                                   
  EQUITY (DEFICIT)                        $ 10,082,007   $     88,052 
                                          =============  =============


See accompanying notes to these consolidated financial statements.  

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                                                                [Download Table]


                        XML - GLOBAL TECHNOLOGIES, INC.               
                     CONSOLIDATED STATEMENT OF OPERATIONS             
             FOR THE YEAR ENDED JUNE 30, 2000 AND FOR THE PERIOD      
               MAY 18, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999      

                                              2000           1999     
                                                                      

REVENUE                                   $     53,185   $      2,137 
                                           ------------  -------------

OPERATING EXPENSES                                                    
  Research and development                     774,114         49,809 
  Marketing and selling                        218,713              - 
  General and administrative                   629,075         70,091 
  Fair value of options granted to                                    
     consultants                                55,898              - 
Depreciation and amortization                   35,578          3,086 
                                         --------------  -------------
       Total operating expenses              1,713,378        122,986 

OPERATING LOSS                              (1,660,193)      (120,849)

INTEREST INCOME                                 94,161              - 
                                         --------------  -------------

NET LOSS BEFORE PROVISION FOR INCOME                                  
  TAXES                                     (1,566,032)      (120,849)

PROVISION FOR INCOME TAXES                       7,209              - 
                                        ---------------  -------------

NET LOSS                                  $ (1,573,241)  $   (120,849)
                                        ===============  =============

LOSS PER SHARE                                                        
  Basic                                   $      (0.07)  $      (0.01)
                                        =============== ==============
  Diluted                                 $      (0.07)  $      (0.01)
                                        =============== ==============

See accompanying notes to these consolidated financial statements.  

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                       XML - GLOBAL TECHNOLOGIES, INC.                                                     
               CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY                                              
      FOR THE PERIOD MAY 18, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999                                     

                                                                              Accumulated                  
                                                      Additional                 Other                     
                                     Common Stock       Paid-in Accumulated   Comprehensive                
                              Shares         Amount     Capital    Deficit   Income (Loss)    Total        
                              -------        ------    --------  ----------  ---------------  -----        
                                                                                                           
BALANCE, MAY 18, 1999                                                                                      
  (date of inception)                  -     $     -  $       -       $  -   $    -            $        -  
Share issuances for cash      12,500,000       1,250     11,250          -        -                12,500  
Net loss                               -           -          -   (120,849)       -               (12,849) 
Assumption of liabilities of                                                                               
  International Capital                                                                                    
  Funding, Inc.                5,000,000         500     (3,171)         -        -                (2,671) 
                            -------------  ----------  --------------------  ----------        ----------  

BALANCE, June 30, 1999        17,500,000       1,750      8,079   (120,849)       -              (111,020) 
Share issuances for cash       8,969,865         897 10,441,250          -        -            10,442,147  
Share issuance for purchase                                                                                
  of DataXchg Inc.             1,000,000         100    999,900          -        -             1,000,000  
Share issuances on exercise                                                                                
  of warrants                    500,000          50     34,950          -        -                35,000  
Extinguishment of note payable                                                                             
  to stockholder                 135,135          14    135,121          -        -               135,135  
Return of unvested common                                                                                  
  stock                         (600,000)        (60)        60          -        -                     -  
Issuance of compensatory                                                                                   
  stock options                        -           -     55,898          -        -                55,898  
Foreign currency translation                                                                               
  adjustment, net of $2,622                                                                                
  of tax                               -           -          -          -   (5,089)               (5,089) 
Net loss                               -           -          - (1,573,241)       -            (1,573,241) 
                            -------------  ---------- ---------- ----------  -----------       ----------- 
     Total comprehensive                                                                                   
       income(loss)                                                                            (1,578,330) 
                            -------------  ---------- ---------- ----------  -----------        -----------

BALANCE, June 30, 2000        27,505,000     $ 2,751  $11,675,258$(1,694,090)(5,089)          $  9,978,830 
                             ============   ================================ ==========     ===========    


See accompanying notes to these consolidated financial statements.    

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                        XML - GLOBAL TECHNOLOGIES, INC.               
                     CONSOLIDATED STATEMENT OF CASH FLOWS             
             FOR THE YEAR ENDED JUNE 30, 2000 AND FOR THE PERIOD      
               MAY 18, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999      

                          Increase (Decrease) in Cash                 

                                              2000           1999     
                                              ----           -----    
                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES                                  
  Net loss                                $ (1,573,241)  $   (120,849)
Adjustments to reconcile net loss to net                              
  cash used in operating activities                                   
  Stock issued in exchange for                                        
     intellectual property rights                                     
     and for services                                -         12,500 
  Depreciation and amortization                 35,578          3,086 
  Fair value of options granted to                                    
     consultants                                55,898              - 
Changes in operating assets and liabilities                           
  Trade accounts receivable                     (8,923)        (1,661)
  Other receivables                            (49,475)        (3,509)
  Prepaid expenses                              (7,239)        (4,658)
  Trade accounts payable and accrued                                  
     liabilities                                39,705         50,389 
  Income taxes payable                           7,209              - 
  Advances due to directors                     (8,796)         1,223 
                                          -------------  -------------
     Net cash used in operating activities  (1,509,284)  (63,479)     
                                          -------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES                                  
  Purchase of investments available for                               
     sale                                   (1,000,000)             - 
  Purchases of property and equipment         (139,684)       (55,552)
  Acquisition of trademarks and patents        (45,246)        (7,134)
  Acquisition of intellectual property        (250,000)             - 
  Acquisition of subsidiary, net of cash                              
     acquired                                        -            611 
                                          -------------  -------------
     Net cash used in investing activities  (1,434,930)  (62,075)     
                                        ---------------  -------------

CASH FLOWS FROM FINANCING ACTIVITIES                                  
  Issuance of capital stock and exercise                              
     of warrants, net of issue costs        10,477,147              - 
  Proceeds from issuance of note payable             -        135,135 
                                        ---------------  -------------
     Net cash provided from financing                                 
       activities                           10,477,147        135,135 
                                        ---------------  -------------
EFFECT OF CHANGES IN EXCHANGE RATES             (6,662)             - 
                                        --------------- --------------
NET CHANGE IN CASH                           7,526,271          9,581 

CASH AND CASH EQUIVALENTS, beginning                                  
  of period                                      9,581              - 
                                        --------------- --------------

CASH AND CASH EQUIVALENTS, end of period  $  7,535,852   $      9,581 
                                        =============== ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW                                  
  INFORMATION                                                         
  Interest paid                           $          -   $          - 
                                        =============== ==============
  Income taxes paid                       $          -   $          - 
                                        =============== ==============
SUPPLEMENTAL SCHEDULE OF NONCASH                                      
  TRANSACTION                                                         
  Shares issued for acquisition of                                    
     subsidiary                           $  1,000,000   $          - 
                                        =============== ==============
  Extinguishment of note payable to                                   
     stockholder                          $   (135,135)  $          - 
                                        =============== ==============
  Assumption of liabilities of                                        
     International Capital Funding, Inc.  $          -   $      2,671 
                                        =============== ==============


See accompanying notes to these consolidated financial statements.  

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NOTE 1 - ORGANIZATION AND OPERATIONS                                            

Organization and Development Stage Operations                                   

Effective August 27, 1999, XML-Technologies, Inc. (XML-Technologies) and        
International Capital Funding, Inc. (ICF) entered into an agreement and plan    
of reorganization (the Agreement). In accordance with the Agreement, the        
shareholders of XML-Technologies received 12.5 million shares of ICF stock in   
exchange for the 12.5 million outstanding shares of XML-Technologies. The       
stockholders of ICF retained 5 million shares in exchange for no assets and     
the assumption of $2,671 of liabilities of ICF by XML-Technologies. The         
transaction was accounted for as a recapitalization of XML-Technologies and     
the accompanying consolidated financial statements present the financial        
position, results of operations, and cash flows of XML-Technologies.  After     
entering into the Agreement, the ownership percentage of the original           
stockholders of XML-Technologies was reduced from 100% to 71%.                  

ICF was organized in 1991 for the purpose of consummating a merger or           
acquisition with a private entity. Prior to entering into the Agreement, it     
had no material amount of assets or liabilities and no operations. Subsequent   
to completing the Agreement, ICF changed its name to XML-Global Technologies,   
Inc. (XML-Global Technologies or the Company) and changed its year-end to June  
30.                                                                             

The capital structure in the accompanying consolidated financial statements     
reflects a ten for one stock split of ICF shares authorized on August 3, 1999   
in anticipation of entering into the Agreement.                                 

XML-Technologies is a Nevada corporation organized May 18, 1999 to hold either  
directly or indirectly all outstanding shares of XML-Global Research, Inc. and  
Walkabout Website Designs, Ltd., both of which are British Columbia             
corporations.  The Company and its subsidiaries engage in the business of       
developing Internet based software applications using XML (eXtensible Markup    
Language).  XML is an abbreviated version of SGML (Standard General Markup      
Language), the international standard for defining description of the           
structure and content of electronic documents.                                  

For the period May 18, 1999 through June 30, 1999, the Company and its          
subsidiaries' efforts were devoted to legal formation; financial planning;      
recruiting directors, advisors and employees; and raising additional            
financing.  Development stage operations during this period were financed with  
a loan from a director of the Company.  In July 1999, the Company commenced     
selling its e-commerce software and, accordingly, is no longer a development    
stage company.                                                                  

As described in Note 3, during fiscal 2000, the Company acquired DataXchg,      
Inc., a Delaware corporation that owns the rights to certain XML-based e-       
commerce technology.                                                            

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                             

Principles of Consolidation - The consolidated financial statements include     
the accounts of XML-Global Technologies, Inc. and its wholly-owned U.S. and     
Canadian subsidiaries. All material intercompany accounts and transactions      
have been eliminated in consolidation.                                          

Use of Estimates - The preparation of financial statements in conformity with   
generally accepted accounting principles requires management to make estimates  
and assumptions that affect the amounts reported in the consolidated financial  
statements. Actual results could differ from those estimates.                   

Cash and Cash Equivalents - All highly liquid investments with a maturity of    
three months or less at the time of purchase are consider to be cash            
equivalents.  Cash equivalents include cash on deposit with banks, money        
market funds, and managed bond funds.                                           

Investments in Securities Available for Sale - Investments in debt and equity   
securities with readily determinable fair values are classified as available    
for sale and reported at fair value, adjusted for other than temporary          
declines in value.  Realized and unrealized gains and losses are computed       
using the specific identification method.  Unrealized gains and losses are      
included in the determination of comprehensive income, net of applicable        
income taxes.                                                                   

Securities available for sale consist solely of adjustable rate corporate       
notes that mature in October 2003.  At June 30, 2000, there are no unrealized   
gains or losses on the securities.                                              

Allowance for Doubtful Accounts - The Company considers all trade accounts      
receivable to be fully collectible. Accordingly, no allowance for doubtful      
accounts has been recorded.                                                     

Property and Equipment - Property and equipment is recorded at cost.            
Depreciation is computed using the straight-line method over the estimated      
useful lives of the assets.                                                     

Intangible Assets - Intellectual property rights consist primarily of the       
rights to certain technology known as "expressXCHG," which were acquired in     
connection with the business combination with DataXchg, Inc. described in Note  
3.  The recorded value of the rights is $1 million.  Other rights relate to     
certain electronic signature verification technology obtained for $250,000      
cash.  Both rights are being amortized using the straight-line method over      
four years.  The rights were acquired during June 2000, and through June 30,    
2000, no amortization expense was recorded.                                     

Legal costs associated with obtaining and protecting trademarks and patents     
are capitalized and amortized over five years.  As of June 30, 2000, no         
trademarks or patents were perfected, and no amortization expense was           
recorded.                                                                       

Valuation of Long-Lived Assets - The Company periodically reviews long-lived    
assets, including identifiable intangible assets, whenever events or changes    
in circumstances indicate that the carrying amount of an asset may be impaired  
and not recoverable. Adjustments are made if the sum of the expected future     
undiscounted operating cash flows is less than the carrying amount.             

Revenue Recognition - The Company recognizes revenue when earned, in            
accordance with American Institute of Certified Public Accountants Statement    
of Position (SOP) 97-2, Software Revenue Recognition, and SOP 98-9,             
Modification of SOP 97-2 with Respect to Certain Transactions.  Royalties       
based upon licensees' revenues or usage are recognized as licensees' revenues   
are earned or usage occurs. In the event that licensees' revenue recognition    
criteria are not met, revenue is recognized when received.  Maintenance and     
subscription revenue is recognized ratably over the contract period.  Revenue   
attributable to significant undelivered elements, including maintenance and     
technical support, is recognized over the contract period as elements are       
delivered.  Revenues from fixed-price service contracts and software            
development contracts requiring significant production, modification, or        
customization are recognized using the percentage-of-completion method.         
Revenue from service contracts that are based on time incurred is recognized    
as work is performed.                                                           

Research and Development Costs - Research and development costs are expensed    
as incurred. Statement of Financial Accounting Standards No. 86, Accounting     
for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed,   
does not materially affect the Company.                                         

Income Taxes - The Company accounts for income taxes using the liability        
method. Deferred taxes are recognized for temporary differences between the     
basis of assets and liabilities for financial and income tax purposes at        
enacted tax rates. Deferred tax amounts represent the future tax consequences   
of those differences, which will be either deductible or taxable when the       
assets and liabilities are recovered or settled. Valuation allowances are       
established when necessary to reduce deferred tax assets to the amounts         
expected to be realized. The Company files a consolidated tax return in the     
United States. It files separate tax returns for each of its Canadian           
subsidiaries in Canada. Additionally, the Canadian subsidiaries are subject to  
provincial income taxes in Canada.                                              

Foreign Currency Translation - All asset and liability accounts of Canadian     
operations are translated into U.S. dollars at current exchange rates.          
Revenues and expenses are translated using the average exchange rate            
prevailing during the period. Foreign currency translation adjustments are      
reported as a component of accumulated other comprehensive income.  Such        
adjustments were not material during the period May 18, 1999 (date of           
inception) to June 30, 1999.                                                    

Earnings Per Share - The Company reports earnings per share in accordance with  
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per        
Share.                                                                          

Segment Information - The Company reports segment information in accordance     
with SFAS No. 131, Disclosures about Segments of an Enterprise and Related      
Information. SFAS No. 131 requires that reportable segments be designated       
using a management approach, which relies on the internal organization used by  
management for making operational decisions and assessing performance. SFAS     
No. 131 also requires certain disclosures about products and services,          
geographic areas, and major customers.                                          

New Accounting Standard - In June 1998, the Financial Accounting Standards      
Board issued SFAS No. 133, Accounting for Derivative Instruments and Hedging    
Activities. Among other provisions, SFAS No. 133 requires that entities         
recognize all derivatives as either assets or liabilities in the balance sheet  
and measure those financial instruments at fair value. Accounting for changes   
in fair value is dependent on the use of the derivatives and whether such use   
qualifies as hedging activity. The new standard, as amended, becomes effective  
for the Company in fiscal 2001, and management is currently assessing the       
impact, if any, it may have on financial position and results of operations.    

NOTE 3 - MERGERS AND ACQUISITIONS                                               

XML-Global Research, Inc.                                                       

Effective May 20, 1999, XML-Technologies, Inc. completed the acquisition of     
XML-Global Research, Inc. (Global) by purchasing all outstanding shares of      
common stock of Global for a nominal amount. Global is a British Columbia       
corporation organized on February 4, 1999 for the purpose of engaging in        
software development. The acquisition has been accounted for using the          
purchase method of accounting for business combinations. Prior to the           
acquisition, Global had no significant operations, and no goodwill was          
recorded in connection with the combination.                                    

Walkabout Website Designs, Ltd.                                                 

Effective May 27, 1999, XML-Global Research, Inc. completed the acquisition of  
Walkabout Website Designs, Ltd. (Walkabout) by purchasing all outstanding       
shares of common stock of Walkabout for a nominal amount. Walkabout is a        
British Columbia corporation organized on September 1, 1998 for the purpose of  
engaging in software development. The acquisition has been accounted for using  
the purchase method of accounting for business combinations; and, accordingly,  
the operating results of Walkabout have been included in the Company's          
financial statements from the date of acquisition. No goodwill was recorded in  
connection with the combination.                                                

DataXchg,Inc.                                                                   

In October 1999, the Company and one of its non-employee directors, David       
Webber, co-founded DataXchg, Inc. ("DataXchg"), a Delaware corporation.  The    
Company received 40% of common shares and David Webber received the other 60%.  
In exchange for the shares, the parties agreed to transfer all rights to        
certain technology and other intellectual property related to certain B2B       
(Business-to-Business) and XML-EDI (Electronic Data Interchange) solutions.     
Neither party has a historical cost basis in the assets that were transferred   
to DataXchg.                                                                    

Under the terms of a licensing agreement, DataXchg granted the Company the      
right to use, develop, and sublicense certain technology known as               
"expressXCHG."  Pursuant to the license agreement, the Company will pay         
royalties to DataXchg equal to 80% of net revenues derived from the sale and    
licensing of products that are either based on the technology owned by          
DataXchg or jointly developed by the Company and DataXchg.  The Company will    
pay royalties equal to 20% of net revenues derived from third party use of the  
technology and intellectual rights.                                             

Effective June 28, 2000 the Company acquired in a tax-free exchange Mr.         
Webber's 60% interest in DataXchg in exchange for the issuance of 1,000,000     
shares of the Company's common stock.  For financial reporting purposes, the    
acquisition has been accounted for as a purchase.  A $1,000,000 value was       
assigned to the shares given as consideration for the purchase, based on the    
share price of other issuances of Company stock during the period the parties   
agreed in substance to the terms of the purchase. The purchase price was        
allocated to the technology rights held by DataXchg and will be amortized over  
four years.  Management has reviewed the $1,000,000 carrying  amount of the     
technology rights and has identified no events or changes in circumstances      
that would indicate that the carrying amount may not be recoverable.            

DataXchg has no history of operations; through June 28, 2000, it had no         
revenues or expenses.  Accordingly, there are no pro forma results of           
operations to report for periods ended prior to that date that include          
DataXchg.                                                                       

Prior to the business combination with DataXchg, the Company's 40% investment   
was carried at cost, adjusted for its proportionate share of undistributed      
earnings or losses.  Through June 28, 2000, DataXchg had no earnings or         
losses.                                                                         

NOTE 4 - PROPERTY AND EQUIPMENT                                                 

Property and equipment consist of the following:                                

                                                                [Download Table]


                                     2000          1999   
                                     ----          ----   
                                                          

Computer hardware                  $141,215     $  50,685 
Computer software                     8,553             - 
Leasehold improvements                9,975             - 
Office equipment                     37,406         7,339 
                                  ----------    ----------
                                     197,149       58,024 
Accumulated depreciation            (38,516)       (3,086)
                                  ----------    ----------
                                   $158,633     $  54,938 
                                   =========    ==========

NOTE 5 - INCOME TAXES                                                           

Net income (loss) before provision for income taxes consists of the following:  

                                                                [Download Table]


                                     2000           1999   
                                     ----           ----   
                                                           
U.S. operations                  $ (1,695,101)  $        - 
Canadian operations                   129,069     (120,849)
                                  ------------  -----------
                                 $ (1,566,032)  $ (120,849)
                                 =============  ===========


The provision for income taxes consists of the following:                       

                                                                [Download Table]

                                     2000           1999   
                                     -----          ----   
                                                           
Current expense                                            
   Canadian                      $      7,209   $        - 
Deferred expense (benefit)                                 
   U.S.                              (576,300)           - 
   Canadian                            48,300      (48,300)
   Change in valuation allowance      528,000       48,300 
                                  ------------  -----------
                                 $      7,209   $        - 
                                  ============  ===========


The total provision differs from the amount computed using U.S. federal         
statutory income tax rates as follows:                                          

                                                                [Download Table]


                                     2000           1999   
                                     ----           ----   
                                                           

Net loss before provision for                              
   income taxes                  $ (1,566,032)  $ (120,849)
U.S. statutory rate                        34%          34%
Tax benefit at statutory rate        (532,500)     (41,100)
Excess income tax expense                                  
   (benefit) in Canada and other       11,709       (7,200)
Increase in valuation allowance       528,000       48,300 
                                 ------------- ------------
                                 $      7,209   $        - 
                                 ============= ============

The tax effects of temporary differences that give rise to deferred tax assets  
(liabilities) are as follows:                                                   

                                                                [Download Table]

                                     2000           1999   
                                     ----           ----   
                                                           
Assets                                                     
   Net operating loss                                      
     carryforwards               $    557,300   $   48,300 
   Stock-based compensation            19,000            - 
   Foreign currency translation                            
     adjustment                         2,622            - 
   Valuation allowance               (576,300)     (48,300)
                                  ------------  -----------
   Net deferred tax asset        $      2,622   $        - 
                                  ============  ===========


The Company has approximately $1.6 million of U.S. net operating loss           
carryforwards, which expire in 2020. Uncertainty exists surrounding             
realization of the benefit of the loss carryforwards; and, accordingly, the     
Company has recorded a $576,300 valuation allowance to reduce deferred tax      
assets to an amount that will more likely than not be realized.                 

Under existing tax laws, undistributed earnings of foreign subsidiaries are     
not subject to U.S. tax until distributed as dividends.  Currently, the         
Company's Canadian subsidiaries have no undistributed earnings.  In the event   
such earnings accumulate, they would be considered to be indefinitely           
reinvested, and no deferred income taxes would be provided on such amounts.     

NOTE 6 - EARNINGS PER SHARE                                                     

The numerators and denominators of basic and diluted earnings per share are as  
follows:                                                                        

                                                                [Download Table]


                                     2000           1999   
                                     ----           ----   
                                                           
Numerator - net loss             $ (1,573,241)  $ (120,849)
Denominator - weighted average                             
   number of shares outstanding    21,205,800   17,500,000 


As described in Note 7 and Note 8, during fiscal 2000, the Company granted      
stock options and warrants to purchase up to 9,975,000 shares of common stock.  
These shares were not included in computing diluted earnings per share because  
their effects were antidilutive.                                                

NOTE 7 - STOCKHOLDERS' EQUITY                                                   

Preferred Stock                                                                 

The Company has 100,000,000 authorized shares of $0.01 par value preferred      
stock. The Board of Directors may authorize issuance of any number of shares    
in series and assign specific rights and preferences to each series without     
limitation. As of June 30, 2000 and 1999, no shares have been issued.           

Common Stock and Stock Warrants                                                 

The Company has a single class of $0.0001 par value common stock. Authorized    
shares total 500 million. After giving effect to the Agreement discussed in     
Note 1 and a ten for one stock split authorized on August 3, 1999, the Company  
had 17.5 million shares issued and outstanding at June 30, 1999.  At June 30,   
2000, the Company had 27.5 million shares issued (or committed to be issued)    
and outstanding.                                                                

During fiscal 2000, the Company entered into the equity transactions described  
below.  All issuances are exempt from registration in reliance on Rule 506 of   
Regulation D or Section 4(2) of the Securities Act of 1933.                     

1)   Concurrent with completing the Agreement discussed in Note 1, the      
Company issued 2,330,000 units to investors at $1.00 per unit for 
 total proceeds of $2,330,000.  Total issue costs were approximately
$173,000.  Units issued consist of one common share and a stock   
  purchase warrant entitling the holder to acquire one common share at
  an exercise price of $4.00 within the first six months following the
   issue date, or $6.00 within the second six months following the issue
    date.  Subsequent to issuance, the terms of the warrants were modified
such that the holder may acquire one share of common stock at an  
exercise price of $4.00 up until December 31, 2000.               

2)   Effective September 1, 1999, the Company issued a warrant that         
entitles the holder to purchase 200,000 shares of common stock for
$5.00 per share.  The term of the warrant is five years.          

3)   Effective January 13, 2000, the Company entered into a Securities      
   Purchase Agreement (the "Agreement") with XMLFund LLC ("XMLFund"), an
unrelated third party.  Under the Agreement, XMLFund agreed to    
    purchase 500,000 units at a price of $2.00 per unit for total proceeds
   of $1 million.  Each unit consists of two shares of common stock, one
Class A warrant and one Class A-1 warrant.  Each Class A warrant  
    entitles XMLFund to purchase one additional share of common stock at a
   price of $2.00 per share, and each Class A-1 warrant entitles XMLFund
  to purchase one additional share of common stock at a price of $0.07
 per share.  The term of the Class A warrants is three years and the
    term of the Class A-1 warrants is 60 days. The Class A-1 warrants were
exercised in March 2000, from which the Company received gross    
proceeds of $35,000.  Although the exercise price of the Class A-1
   warrants is below the fair value of the Company's stock, the warrants
  were not issued in consideration of past or future services received
from XMLFund.  The total estimated fair value of all equity       
    instruments comprising the units sold to XMLFund approximate the total
proceeds received.  Accordingly, the Company has recognized no    
compensation expense related to the Class A-1 warrants.           

If within one year of the sale of the units (or once all warrants are 
   exercised, if earlier) the Company proposes to register any of its common
stock under the Securities Act of 1993 in connection with a public    
   offering, the Company agrees to use its best efforts to register also the
 shares held by XMLFund.  In the event the Company proposes to offer for
  sale any new common shares or securities convertible into common shares,
  or any other class of capital stock, the Company has granted XMLFund the
  preemptive right to purchase additional shares necessary to maintain its
percentage interest in the Company.                                   

4)   Effective February 22, February 29, and April 7, 2000, the Company     
    entered into agreements to issue a total of 1,050,000 units at a price
of $1.00 per unit for total proceeds of $1,050,000.  Each unit    
  consists of one share of common stock and one warrant.  Each warrant
    entitles holders to purchase one additional share of common stock at a
  price of $4.00 per share.  The warrants expire on December 31, 2000.
 If within one year of the sale of the units the Company proposes to
  register any of its common stock under the Securities Act of 1933 in
   connection with a public offering, the Company agrees to use its best
efforts to register also the shares issued in these private       
placements.                                                       

5)   On February 24, 2000, one of the Company's founding stockholders left  
    the employee of the Company.  The employee and the Company agreed that
he would return 600,000 of the 800,000 shares originally issued to
him, at no cost to the Company.                                   

6)   Effective April 5, 2000, the Company entered into a second Securities  
Purchase Agreement (the Agreement) with XMLFund.  Under this      
Agreement, XMLFund agreed to purchase 100,000 units at a price of 
   $1.00 per unit for total proceeds of $100,000.  Each unit consists of
one share of common stock and one warrant.  Each warrant entitles 
   XMLFund to purchase one additional share of common stock at $4.00 per
    share.  The warrants expire on December 31, 2000.  If, within one year
   of the sale of the units, the Company proposes to register any of its
common stock under the Securities Act of 1933 in connection with a
public offering, the Company agrees to use its best efforts to    
register also the shares held by XMLFund.                         

7)   Effective March 3, 2000, the Company engaged Westminster Securities    
Corporation (Westminster) to serve as its placement agent for the 
 purpose of offering up to 105 units at a price of $75,000 per unit.
Each unit consists of 50,000 shares of common stock and 50,000    
    redeemable warrants.  During the first six months of the 18 month term
of the warrants, each warrant entitles holders to purchase one    
additional share of common stock at a price of $4.00 per share.   
During the following 12 months, holders are entitled to purchase  
   additional common shares at a price of $6.00 per share.  The warrants
 are redeemable by the Company at $0.01 per warrant in the event the
company (i) registers the shares to honor the warrants, (ii) the  
shares are listed on a national exchange, Nasdaq, or the Over-the-
    Counter Bulletin Board, (iii) the closing bid price of such shares for
   the 20 trading days prior to redemption is 200% of the exercise price
   of the warrants, and (iv) no lockup provisions restrict the resale of
  the shares.  In connection with the offering, the Company intends to
    register up to 5.25 million common shares and 5.25 million warrants in
various states where such securities may be sold.                 

Through June 30, 2000 the Company received paid subscriptions for 92.5
 units for gross proceeds of $6,937,500.  Related costs of issuance were
approximately $667,000.  In connection with the issuance, the Company 
granted Westminster an option to purchase 9.25 of the units at the    
$75,000 unit price.  The term of the option is 18 months.             

NOTE 8 - 1999 STOCK PLAN                                                        

On October 19, 1999, the Company adopted a stock incentive plan (the "1999      
Stock Plan") to provide incentives to employees, directors and consultants.     
Under the 1999 Stock Plan, the Company has reserved a total of 4,000,000        
shares of Common Stock for issuance with the maximum term of options being ten  
years. The Board of Directors has the exclusive power over the granting of      
options and their vesting provisions. During the year ended June 30, 2000, the  
Company granted 1,170,000 options to employees, directors and consultants at    
an exercise price of $1.00 per share and 25,000 options to employees at an      
exercise price of $1.50 per share. The options have a seven year term.          

A summary of the status of the Plan during fiscal 2000 is as follows:           

                                                                [Download Table]


                                                  Weighted 
                                                   Average 
                                   Number of      Exercise 
                                    Options         Price  
                                   --------       ---------
                                                           
Options outstanding at June 30,                            
     1999                                                  
   Granted                          1,195,000   $     1.01 
   Exercised                                -            - 
   Forfeited                          (25,000)        1.00 
   Options outstanding at June 30,                         
     2000                           1,170,000         1.01 
                                   ===========  ===========
   Options exercisable at June 30,                         
     2000                           1,140,000   $     1.00 
                                   ===========  ===========


A summary of stock options outstanding at June 30, 2000 is as follows:          

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                                                                [Download Table]


                 Options Outstanding                            Options   
Exercisable                                                               
                 -------------------                        --------------
-------                                                                   
                             Weighted-                                    
                              Average     Weighted                        
  Range of                   Remaining      Average                       
Average                                                                   
  Exercise      Number      Contractual   Exercise      Number            
Exercise                                                                  
   Prices     Outstanding      Life         Price     Exercisable         
Price                                                                     
  ---------  ------------   -----------   --------- ------------     ---- 
-----                                                                     
                                                                          

    $1.00      1,145,000    6.5 years    $     1.00    1,140,000     $    
1.00                                                                      
    $1.50         25,000    7.0 years    $     1.50            -     1.50 
             -----------                            ------------          
               1,170,000                               1,140,000          
             ===========                            ============          


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The Company applies the provision of APB Opinion No. 25, Accounting for Stock   
Issued to Employees, and related interpretations to account for its stock-      
based awards.  Accordingly, costs for employee stock options or issuance of     
shares is measured as the excess, if any, of the fair value of the Company's    
common stock at the measurement date over the amount the employee must pay to   
acquire the stock. The cost for the issuance of options to non-employees is     
based on the fair value of the options granted at the date the services were    
performed using the Black-Scholes option pricing model. Stock-based             
compensation expense recognized during fiscal 2000 was $55,898.                 

SFAS No. 123, Accounting for Stock-Based Compensation, requires disclosure of   
the pro forma effect of applying the fair value method of accounting for stock  
options issued to employees. The Company uses the Black-Scholes option-pricing  
model to compute estimated fair value, based on the following assumptions:      

                                                                [Download Table]


                                               
Risk-free interest rate                 6.0%   
Dividend yield rate                     -%     
Price volatility                        20%    
Weighted average expected life of              
     options                            3 years


In March 2000, the Financial Accounting Standards Board (FASB) issued           
Interpretation No. 44, Accounting for Certain Transactions Involving Stock      
Compensation.  FASB Interpretation No. 44 clarifies that non-employee members   
of an entity's Board of Directors do not meet the definition of an employee,    
in which case the requirements of SFAS No. 123 must be applied.  However, an    
exception is made to require the application of APB Opinion No. 25 to stock     
compensation granted to a non-employee director for services provided as a      
director if the director was (a) elected by stockholders or (b) appointed to a  
board position that will be filled by stockholder election when the existing    
term expires.                                                                   

The pro forma effect of applying the fair value method of accounting for        
options issued to employees and directors results in a $133,400 increase in     
net loss and a $0.01 increase in net loss per share for the year ended          
June 30, 2000.                                                                  

NOTE 9 - RELATED PARTY TRANSACTIONS                                             

During the year ended June 30, 2000, the Company extinguished a $135,135 note   
payable due to a director through the issuance of common stock.  The Company    
also paid $184,000 in management fees to directors and to companies controlled  
by directors.                                                                   

NOTE 10 - CREDIT RISK                                                           

Financial instruments that potentially subject the Company to concentrations    
of credit risk consist of cash and cash equivalents, securities available for   
sale, and trade accounts receivable.  The Company places its temporary cash     
investments with major U.S. and Canadian banks and a U.S. brokerage firm.       
Cash deposited with U.S. banks are insured up to $100,000.  Cash deposited      
with Canadian banks are insured up to Cdn $60,000.  Securities, mutual funds,   
money market funds, and other investments maintained with a U.S. brokerage      
firm are uninsured.                                                             

The Company extends credit to customers based on evaluation of customers'       
financial condition and credit history.  Collateral is generally not required.  
Customers include U.S., Canadian, and Korean entities engaged in e-commerce     
and software development.                                                       

NOTE 11 - FAIR VALUE OF FINANCIAL INSTRUMENTS                                   

The fair values of cash, cash equivalents and trade accounts receivable and     
payable, and accrued liabilities all approximate their fair value due to the    
short-term nature of the instruments. Investments in securities available for   
sale are reported at fair value.                                                

NOTE 12 - SEGMENT AND GEOGRAPHIC INFORMATION AND MAJOR CUSTOMERS                

The Company's operations consist of a single reportable segment.  This segment  
derives its revenues from sales of products and services employing XML          
(eXtensible Mark-up Language) that are used by businesses to conduct e-         
commerce. Through June 30, 1999, the Company's efforts were focused primarily   
on development stage operations, and activities within this segment were        
limited prior to that date. The following tables and schedules summarize        
certain information about this segment.                                         

                                                                [Download Table]


                                                 XML-Based                   
                                           Products and Services             
                                           ---------------------             
                                              2000       1999                
                                             ------      ------              
                                                                             
  External revenues                         $53,185    $ 2,137               
  Intersegment revenues                           -          - Interest      
expense                                           -          - Depreciation  
and amortization                             35,578      3,086               
  Segment loss before tax                (1,510,228)  (120,849)Segment assets
1,587,019                                         88,052                     
  Expenditures for segment assets           434,930     62,686               
  Software rights acquired for stock      1,000,000          -               


Following are reconciliations to corresponding totals in the accompanying       
financial statements:                                                           

                                                                [Download Table]


                                           2000            1999   
                                           ----            ----   
                                                                  
Total revenues for reportable                                     
   segments                            $    53,185    $     2,137 
Less intersegment revenues                       -              - 
                                      -------------   ------------

   Consolidated revenues               $    53,185    $     2,137 
                                      =============   ============

Total loss before tax for reportable                              
   segments                            $(1,510,228)   $  (120,849)
Corporate headquarters expense, net of                            
   interest income                          45,804              - 
                                      -------------   ------------

   Consolidated net loss before                                   
    provision for income taxes         $(1,556,032)   $  (120,849)
                                      =============   ============

Total assets for reportable segments   $ 1,587,019    $    88,052 
Unallocated cash and investments         8,494,988              - 
                                       ------------   ------------

   Consolidated total assets           $10,082,007    $    88,052 
                                      =============   ============


Geographic Information                                                          

Following is a summary of revenues and long-lived assets related to the         
respective countries in which the Company operates. Revenues are attributed to  
countries based on location of customers.                                       

                                                                [Download Table]


                               2000                       1999               
                               -----                     ------              
                                   Long-Lived                 Long-Lived     
Revenues                      Assets           Revenues         Assets  -----
----                 ----------    ----------------------                    
                                                                             
     United States   $    7,254    $       -   $       -      $       -      
Canada                   30,731      158,633        2,137         54,938     
     Korea               15,200             -          -               -     
                      ---------   -----------  ----------     ----------     
        Consolidated                                                         
          totals     $   53,185    $  158,633  $    2,137     $   54,938     
                     ==========    ==========  ==========     ==========     


Major Customers                                                                 

The Company currently has no major customers.                                   

NOTE 13 - LEASE COMMITMENT                                                      

In March 2000, the Company entered into a lease agreement for a new operating   
facility in Vancouver, British Columbia. Prior to entering into this            
agreement, the Company had been renting its existing facility on a short-term   
basis. The new lease commenced on June 1, 2000 and runs for five years. During  
the first two years, monthly lease payments are $4,700. However, the facility   
is provided at no charge for the first five months of each of the first two     
years. During the following three years, monthly lease payments are $5,500.     
The lease agreement also requires that the Company pay its proportional share   
of operating costs and property taxes.                                          

Future minimum lease payments required under the lease, excluding the           
Company's share of operating costs and property taxes, are as follows:          

                                                                [Download Table]


Year Ending                             
   June 30,                             
                                        
   2001                       $   28,000
   2002                           38,200
   2003                           65,500
   2004                           65,500
   2005                           54,500
                              ----------
                              $  251,700
                              ==========


The effect of the scheduled rent increase and "rent holidays" are recognized    
on a straight-line basis over the five-year term of the lease.  During 2000     
and 1999, rent expense was $73,700 and $5,900, respectively.                    

424B3
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You should rely only on the information contained in this document or that we   
have referred you to.  We have not authorized anyone to provide you with        
information that is different.  This prospectus is not an offer to sell common  
stock and is not soliciting an offer to buy common stock in any state where     
the offer or sale is not permitted.                                             

XML - Global Technologies, Inc. 

24,335,000 Shares of Common Stock 

November 13, 2000 

Until December 8, 2000, all dealers effecting                                   
transactions in the shares offered by this pro-                                 
spectus - whether or not participating in the                                   
offering - may be required to deliver a copy                                    
of this prospectus.  Dealers may also be                                        
required to deliver a copy of this prospectus                                   
when acting as underwriters and for their                                       
unsold allotments or subscriptions.                                             

TABLE OF CONTENTS                                                 
Page                        
Prospectus Summary           2                                                  
Risk Factors                 4                                                  
Certain Market Information  14                                                  
Forward-Looking Statements  15    ____________________________                  
Dividend Policy             16                                                  
Capitalization              16             Prospectus                           
Selected Financial Data     17    ____________________________                  
Management Discussion       18                                                  
Business                    24                                                  
Management                  35                                                  
Certain Transactions        40          November 13, 2000                       
Principal Stockholders      42                                                  
Additional Information      44                                                  
Selling Securityholders     45                                                  
Use of Proceeds             54                                                  
Plan of Distribution        55                                                  
Description of Securities   56                                                  
Legal Matters               56                                                  
Experts                     56                                                  

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 424B3 Filing		Date		First		Last			Other Filings
		9/1/98		28
		2/4/99		28					10KSB
		5/18/99		20		28			NT 10-Q
		5/20/99		28
		5/27/99		28
		6/30/99		3		30			10QSB, NT 10-Q
		8/3/99		28
		8/27/99		9		28			8-K, 8-K/A
		9/1/99		28
		9/15/99		9		12
		9/29/99		9
		10/19/99		9		28
		1/13/00		28
		2/24/00		28
		3/3/00		28
		4/5/00		28
		4/7/00		28
		6/1/00		30
		6/28/00		28					8-K, 8-K/A
		6/30/00		3		30			10KSB, 8-K
		8/14/00		23
		9/1/00		16
		9/6/00		18
		9/30/00		9		18			10QSB
		11/1/00		16
		11/13/00		1		31
Filed On / Filed As Of		11/15/00
		12/8/00		31
		12/31/00		15		28			10QSB
		4/6/01		16
		8/29/01		16
		5/31/05		10
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