As filed with the Securities and Exchange Commission on July 23, 2003

Registration Statement No. 333-104670

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 to

FORM S-4/A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

STRATABASE INC.
(Name of Small Business Issuer in its Charter)

Canada 7370 None
------ ---- ----
(State or jurisdiction of (Primary Standard (I.R.S. Employer
incorporation organization) Industrial Classification Identification No.)
Code Number)

34595 3rd Avenue, Suite 101, Abbotsford, BC, Canada V2S.8B7
(604) 504-5811
(Address and telephone number of principal executive offices)

Copies of communications to:

David Lubin, Esq. S. Campbell Fitch, Esq.
Ehrenreich, Eilenberg & Krause LLP Miller Thomson LLP
11 East 44th Street Robson Court, 1000-840 Howe Street
New York, NY 10017 Vancouver, BC, Canada V6Z 2M1
(212) 986-9700 (604) 687-2242

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the requisite votes are obtained pursuant to the solicitation
by Stratabase Inc. referred to in this Registration Statement.

If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [_]

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

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

CALCULATION OF REGISTRATION FEE

Proposed
maximum
aggregate Proposed maximum
Title of each class of Amount to be offering aggregate offering Amount of
securities registered registered price price registration fee
- -------------------------- ------------ ---------- ------------------ -----------------

Common Stock, no par value 8,233,372 1.52(1) $ 12,514,725.44 $ 1,012.44 (2)

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended, on
the basis of the average of the bid and ask prices reported on the
Nasdaq Over-the-Counter Bulletin Board for the common stock, par value
$.001 per share, of Stratabase, which will become common stock, no par
value, of Stratabase Inc., a Canadian corporation, on a one-for-one
basis pursuant to the continuance and conversion described in this
Registration Statement.

(2) Previously paid.

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

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

THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. WE MAY NOT OFFER OR SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROXY STATEMENT/PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

PROXY/PROSPECTUS SUBJECT TO COMPLETION, DATED _____, 2003

STRATABASE
34595 3rd Avenue, Suite 101
Abbotsford, BC, Canada V2S.8B7

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

A special meeting of the stockholders of Stratabase will be held on _____, 2003,
at __ a.m., at the offices of Ehrenreich Eilenberg & Krause, LLP, 11 East 44th
Street, New York, New York 10017, 17th floor, for the purpose of voting upon a
proposal to change the incorporation of the company from Nevada to Canada.

The continuance will be accomplished through the adoption of the proposed plan
of conversion. If we complete the continuance, Stratabase will be continued
under the Canada Business Corporations Act and cease to be incorporated in
Nevada and as a result will be governed by the Canada Business Corporations Act.

Only stockholders of record at the close of business on _____, 2003 are entitled
to notice of and to vote at the meeting.

Stockholders of record are not entitled to appraisal rights of the fair value of
their shares.

If you do not expect to attend in person, please sign and return the enclosed
proxy card.

By Order of the Board of Directors,

Trevor Newton

Chairman, President, Chief Executive
and Operating Officer and Secretary

_________, 2003

______________, 2003

Dear Stratabase stockholder:

You are cordially invited to attend a special meeting of stockholders to be held
on _____, 2003 at ___ a.m. at the offices of Ehrenreich Eilenberg & Krause, LLP,
11 East 44th Street, New York, New York 10017, 17th floor. The purpose of the
meeting is to allow you to vote on the proposed conversion plan that would
change Stratabase's domicile from Nevada to Canada. If we complete the
conversion and continuance, the company will be governed by the Canada Business
Corporations Act.

Stratabase common stock is currently listed for trading on the Nasdaq
Over-the-Counter Bulletin Board under the symbol "SBSF".

The Board of Directors has declared the continuance and conversion plan
advisable and recommends that you vote in favor of the continuance of Stratabase
from Nevada to Canada. Our officers and directors, who currently hold
approximately 50.14 % of the outstanding shares, have indicated that they intend
to vote for the approval of the conversion.

We are calling a special meeting of the stockholders to vote on the plan of
continuance and conversion and are soliciting proxies for use at the meeting.
The record date for voting at the meeting is _____, 2003.

Stockholders of record are not entitled to appraisal rights of the fair value of
their shares if they vote against the plan of conversion.

SEE "RISK FACTORS," BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN RISKS,
INCLUDING TAX EFFECTS, RELATING TO THE CONVERSION AND THE OWNERSHIP OF COMMON
SHARES IN STRATABASE.

This proxy statement/prospectus is first being mailed to holders of Stratabase
common stock on or about _____, 2003.

PLEASE NOTE THAT NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROXY
STATEMENT/PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL
INFORMATION ABOUT STRATABASE THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS
DOCUMENT. THIS INFORMATION IS AVAILABLE WITHOUT CHARGE TO HOLDERS OF STRATABASE
COMMON STOCK UPON WRITTEN OR ORAL REQUEST. REQUESTS SHOULD BE MADE TO
STRATABASE, 34595 3rd AVENUE, SUITE 101, ABBOTSFORD, BC, CANADA V2S.8B7,
ATTENTION: SECRETARY, TELEPHONE: (604) 504-5811 TO OBTAIN TIMELY DELIVERY, YOU
SHOULD REQUEST INFORMATION NO LATER THAN _____, 2003.

Sincerely,

Trevor Newton
Chairman, President, Chief Executive
and Operating Officer and Secretary

TABLE OF CONTENTS

Page

SUMMARY

Stratabase 1
Factors You Should Consider 2
The Special Meeting 6
SUMMARY FINANCIAL INFORMATION 6
RISK FACTORS 8
Risks Relating to the Continuance 8
Risks Relating to Stratabase 9
Risks Relating to our Strategy and our Industry 12
CONTINUANCE AND CONVERSION PROPOSAL 14
VOTING AND PROXY INFORMATION 17
DISSENTERS' RIGHTS 19
MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES 19
MATERIAL CANADIAN TAX CONSEQUENCES 23
COMPARATIVE RIGHTS OF STOCKHOLDERS 26
ACCOUNTING TREATMENT 31
BUSINESS OF STRATABASE 32
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 37
SELECTED FINANCIAL DATA 43
MARKET PRICES, DIVIDENDS AND TRADING INFORMATION 44
MANAGEMENT 45
EXECUTIVE COMPENSATION 46
RELATED PARTY TRANSACTIONS 48
SECURITY OWNERSHIP 48
DESCRIPTION OF CAPITAL STOCK 50
STOCKHOLDER PROPOSALS 50
EXPERTS 51
LEGAL MATTERS 51
AVAILABLE INFORMATION 51
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 51
CAUTIONARY STATEMENT CONCERNING
FORWARD LOOKING STATEMENTS 52

ANNEX A
Plan of Conversion
Articles of Stratabase Canada
By-Laws of Stratabase Canada

SUMMARY

THIS SUMMARY PROVIDES AN OVERVIEW OF THE INFORMATION CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS AND DOES NOT CONTAIN ALL OF THE INFORMATION YOU SHOULD
CONSIDER. THEREFORE, YOU SHOULD ALSO READ THE MORE DETAILED INFORMATION SET
FORTH IN THIS DOCUMENT, THE FINANCIAL STATEMENTS OF STRATABASE AND THE OTHER
INFORMATION THAT IS INCORPORATED BY REFERENCE. THE SYMBOL "$" REFERS TO UNITED
STATES DOLLARS.

Stratabase

Stratabase was incorporated under the laws of the State of Nevada on November
18, 1998 and commenced operations in January 1999. We completed our initial
public offering in February 2000. Our headquarters are located at 34595 3rd
Avenue, Suite 101, Abbotsford, BC, V2S.8B7, Canada. The telephone number is
(604) 504-5811.

Stratabase is a provider of Knowledge Worker Automation software. Knowledge
Worker Automation (KWA) software, of which Enterprise and CRM software are
components, is designed to allow enterprises to improve the efficiency of
knowledge workers. The KWA software we have produced consists of web-based
software tools. These tools allow enterprises to manage relationships and
contacts, administer and organize time allocations, collaborate with others,
manage data, automate communications and productivity reporting, and conduct
data synchronization.

We have developed both proprietary and open source software. Although in the
past we have focused predominantly on developing open source code software, we
have altered our direction to focus on proprietary software development.

It was originally thought by management that the demand for open source software
would increase significantly over time, and that open source software developers
would realize significant revenue from associated service contracts. While this
has indeed happened over the last four years in the software industry, we have
seen much of the anticipated service revenues go to established service
contractors such as the likes of IBM, and not to small companies like us.
Therefore it was determined by management that we can extract more value from
our software by keeping it proprietary, and offering it on a subscription basis
as a hosted solution.

We previously generated revenues by selling databases of sales leads and mailing
lists, and providing technical services aimed to customize and improve the
quality of the databases we sold. Such technical services and customization
substantially occurred prior to sale of databases. Our open source software was
designed to allow users to interface with and manage these databases, and
customer relationships. It was the expectation of management that by giving the
software away for free and making it open source, we would create demand for our
database and technical services.

Specifically, in 2001 and 2002, when we employed this open source business
model, 89% and 91%, respectively, of our revenues related to the provision of
databases to our customers and 11% and 9%, respectively, related to the
provision of technical and hardware services. However, the magnitude of these
revenues was not sufficient to generate the level of shareholder value that
management feels is expected by its shareholders. Therefore the decision was
made by management to alter Stratabase's business model to focus on proprietary
software. We are therefore no longer supporting open source code software. We
have not yet begun selling our proprietary software. However we did release the
first phase of our proprietary software (the software is called "Resync") in the
last quarter of 2002, but we are offering it as a free trial version for now in
order to judge consumer interest. We do not know whether we will be able to
generate any revenue from Resync. Currently, we are beta-testing the second
phase of our proprietary software (the software is called "Relata").
Approximately 200 users have already signed up for a free trial use of Relata.
Revenue for the quarter ended March 31, 2003 was $5,000. With the closing of our
second office we lost the services of two of our salespeople, and therefore have
not had an active sales staff to sell our database services. Although we hope to
be in a position to rebuild our sales staff in this area, we have not yet found
suitable personnel for these positions.

After the continuance, Stratabase will be a Canadian corporation governed by the
Canada Business Corporations Act. We will continue to conduct the business in
which we are currently engaged. Our operations and employees have always existed
entirely within Canada, and therefore there will be no material effect on
operations. The business and operations of Stratabase following the conversion
will be identical in most respects to our current business, except that we will
no longer be subject to the corporate laws of the State of Nevada but will be
subject to the Canada Business Corporations Act. The Canadian company will be
liable for all the debts and obligations of the Nevada company, and the officers
and directors of the company will be the officers and directors of Stratabase.
The differences between the laws will not materially affect our business but
will affect your rights as a stockholder. The differences between the applicable
laws of the two jurisdictions is discussed in greater detail under the heading
"Comparative Rights of Stockholders" on page 26.

Upon the effectiveness of the conversion, Stratabase will be filing a Form 8-A
with the SEC to register its securities under Section 12(g) of the Securities
Act of 1933.

Factors You Should Consider

REASONS FOR THE CONVERSION

-2-

RISK FACTORS WHICH MAY AFFECT YOUR VOTE

Factors such as possible adverse tax consequences and stock price volatility of
our common stock following the continuance may affect your vote on the
conversion plan and your interest in owning Stratabase common shares. In
evaluating the merits of the proposed conversion, you should carefully consider
the risk factors and the other information included or incorporated by reference
on page 8 of this proxy statement/prospectus.

Although you are entitled to dissent from the proposed continuance and plan of
conversion, Nevada law does not grant dissenters' rights in a conversion.

MATERIAL TAX CONSEQUENCES FOR STOCKHOLDERS

The following is a brief summary of the material tax consequences the
continuance will have for stockholders. Stockholders should consult their own
tax advisers with respect to their particular circumstances. A more detailed
summary of the factors affecting the tax consequences for stockholders is set
out under "Material United States Federal Tax Consequences" and "Material
Canadian Income Tax Consequences."

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

On the date of the continuance, the Nevada company must recognize any gain but
not any losses to the extent that the fair market value of any of our assets
exceeds our taxable basis in such assets. The calculation of any potential gain
will need to be made separately for each asset held. No loss will be allowed for
any asset that has a taxable basis in excess of its fair market value. We do not
believe that any of our assets have a fair market value which is greater than
their respective taxable basis. Therefore, we are not expecting to recognize any
taxable gains as a result of the continuance.

U.S. holders and Canadian holders of our stock will not be required to recognize
any gain or loss as a result of the continuance. A U.S. stockholder's adjusted
basis in the shares of the Canadian company will be equal to such stockholder's
adjusted basis in the shares of the Nevada company. A U.S. stockholder's holding
period in the shares of the Canadian should include the period of time during
which such stockholder held his or her shares in the Nevada company. For a more
complete discussion of the U.S. Income Tax Consequences, please see "Material
United States Federal Income Tax Consequences" on page 19.

CANADIAN INCOME TAX CONSEQUENCES

On our continuance to Canada, the Canadian company will be deemed to dispose of
and to immediately re-acquire its assets at their fair market value. If the fair
market value of the assets exceed the taxable basis in the assets a tax will be
due. Pre-continuance losses are available for use in Canada, but we do not
anticipate any loss carry-forwards being available to us after the continuance
in Canada. We do not believe that any of our assets have a fair market value
which is in excess of their respective taxable basis, we will not have to pay
Canadian taxes as a result of the continuance.

-3-

A Canadian stockholder will not realize a disposition of their Nevada shares on
its continuance to Canada. To the extent a deemed dividend is paid by the Nevada
company to a Canadian stockholder, the amount of the dividend will be included
in their income.

For a more complete discussion of the Canadian Income Tax Consequences, please
see "Material Canadian Income Tax Considerations" on page 23.

HOW THE CONVERSION WILL AFFECT YOUR RIGHTS AS A STOCKHOLDER

Although you will continue to hold the same number of shares you now hold
following the continuance of Stratabase to Canada, the shares will be issued by
a Canadian company as compared to the shares you currently hold which were
issued by a Nevada company. The rights of stockholders under Nevada law differ
in certain substantive ways from the rights of stockholders under the Canada
Business Corporations Act. Examples of some of the changes in stockholder rights
which will result from continuance are:

- - Under Nevada law, unless otherwise provided in the charter,
stockholders may act without a meeting by written consent of the
majority of the voting power of the outstanding common stock entitled
to vote on the matter, and notice need not be given to stockholders.
Under Canadian law, stockholders may only act by way of a resolution
passed at a duly called meeting unless all stockholders otherwise
entitled to vote consent in writing.

- - Under Nevada law, a charter or bylaw amendment requires approval by
vote of the holders of a majority of the outstanding stock. Under
Canadian law, an amendment to a corporation's charter requires approval
by two-thirds majority of the stockholders.

- - Dissenter's rights are available to stockholders under more
circumstances under Canadian law than under Nevada law.

- - Stockholders have a statutory oppression remedy under Canadian law that
does not exist under Nevada statute. It is similar to the common law
action in Delaware for breach of fiduciary duty, but the Canadian
remedy does not require stockholders to prove that the directors acted
in bad faith.

- - No less than 25% of the directors of a Canadian company must reside in
Canada. Nevada law does not contain a similar provision.

- - A director's liability may not be limited under Canadian law as it may
under Nevada law.

-4-

PRICE VOLATILITY

We cannot predict what effect the continuance will have on the market price
prevailing from time to time or the liquidity of our shares.

ACCOUNTING TREATMENT OF THE CONVERSION

For U.S. accounting purposes, conversion of our company from a Nevada
corporation to a Canadian one represents a transaction between entities under
common control. Assets and liabilities transferred between entities under common
control are accounted for at historical cost, in accordance with the guidance
for transactions between entities under common control in Statement of Financial
Accounting Standards No. 141, Business Combinations. The historical comparative
figures of Stratabase will be those of Stratabase as a Nevada company.

Upon the effective date of the conversion, we will continue to be subject to the
securities laws of the Canadian provinces as those laws apply to Canadian
domestic issuers. We will qualify as a foreign private issuer in the United
States. Before our continuance in Canada, we prepared our consolidated financial
statements in accordance with generally accepted accounting principles ("GAAP")
in the United States. As a Canadian domestic issuer, we will be required to
prepare our annual and interim consolidated financial statements in accordance
with Canadian generally accepted accounting principles. For purpose of our
annual disclosure obligations in the United States, we will annually file in the
United States consolidated financial statements prepared in accordance with
Canadian GAAP together with a reconciliation to US GAAP.

In addition, as a foreign private issuer Stratabase will not have to file
quarterly reports with the SEC nor will its directors, officers and 10%
stockholders be further subject to Section 16(b) of the Exchange Act.

APPRAISAL RIGHTS

As a Canadian company, there will be more situations in which the stockholders
of Stratabase will be able to exercise appraisal rights than currently existing
for stockholders of a Nevada company. Under Nevada law, appraisal rights only
exist in a merger of a company whose shares are listed on a national securities
exchange or held by at least 2,000 shareholders of record and the shareholders
are required to accept in exchange for their shares anything other than cash or
shares in another such entity or any combination thereof. Under Canadian law,
the holders of shares of any class of a corporation have the right to dissent
when a company amends its articles to change any provisions restricting or
constraining the issue, transfer or ownership of shares of that class.
Stockholders also have dissenters' rights when a company proposes to amend its
articles to add, change or remove any restrictions on the business or businesses
that the corporation may carry on, amalgamate (other than a vertical short-form
amalgamation with a wholly-owned subsidiary), continue to another jurisdiction,
sell, lease or exchange all or substantially all of its property, or carry out a
going private or a squeeze-out transaction. A shareholder who properly exercises
his or her rights of dissent is entitled to be paid the fair market value of his
or her shares in respect of which he or she dissents.

-5-

OUR RECOMMENDATION TO STOCKHOLDERS

Taking into consideration all of the factors and reasons for the conversion set
forth above and elsewhere in this proxy statement/prospectus, the board of
directors has approved the conversion and recommends that stockholders of
Stratabase vote FOR approval of the continuance and plan of conversion.

The Special Meeting

MATTER TO BE VOTED ON

Stratabase stockholders will be asked to approve the continuance and conversion
plan. This plan will have the effect of changing our domicile from Nevada to
Canada.

VOTE NEEDED TO APPROVE THE PLAN OF CONVERSION

Approval of the plan of conversion requires the affirmative vote of our
stockholders holding at least a majority of the outstanding shares of Stratabase
common stock. The directors and executive officers of Stratabase together
directly own approximately 50.14% of the total number of outstanding shares of
Stratabase common stock. These stockholders have indicated that they intend to
vote all their shares for the approval of the plan of conversion.

SUMMARY FINANCIAL INFORMATION

THE FOLLOWING SUMMARY UNAUDITED INTERIM FINANCIAL INFORMATION FOR THE QUARTERS
ENDED MARCH 31, 2003 AND 2002 AND THE YEARS 1999 THROUGH 2002 INCLUDES BALANCE
SHEET AND STATEMENT OF OPERATIONS DATA FROM THE UNAUDITED AND AUDITED FINANCIAL
STATEMENTS OF STRATABASE. THE INFORMATION CONTAINED IN THIS TABLE SHOULD BE READ
IN CONJUNCTION WITH "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" AND THE FINANCIAL STATEMENTS AND ACCOMPANYING NOTES
INCLUDED IN THE MARCH 31, 2003 FORM 10-QSB AND 2002 FORM 10-KSB THAT IS
INCORPORATED BY REFERENCE.

The financial statements of Stratabase have been prepared in accordance with
accounting principles generally accepted in the United States. The application
of Canadian generally accepted accounting principles, which will be applicable
to our financial statements if the plan of conversion is approved, would not
result in any material differences from the Stratabase financial statements.

-6-

STRATABASE
SELECTED FINANCIAL DATA

For the year ended December 31,
-------------------------------------------------------------------------------------------
2002 2001 2000 1999
-------------------------------------------------------------------------------------------

STATEMENT OF OPERATIONS DATA

Revenues $ 430,240 $ 2,360,452 $ 1,313,579 $ 41,813
Net revenues (operating
expenses) (149,522) 753,350 253,268 (45,059)
General and administrative
expenses 710,689 441,571 357,483 175,535
Net income (loss) (914,645) 421,246 (97,056) (218,108)
Dividends declared - - - -
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK
Basic $ (0.12) $ 0.06 $ (0.02) $ (0.04)
Diluted (0.12) 0.05 (0.02) (0.04)
Dividends per share - - - -
BALANCE SHEET DATA
Total assets $ 983,038 $ 2,046,460 $ 577,157 $ 67,509
Long-term obligations $ - $ - $ - $ -
Average shares outstanding-diluted 7,928,372 7,368,372 6,386,272 5,404,801

The accompanying unaudited financial includes all adjustments considered
necessary (consisting only of normal recurring adjustments) for a fair
presentation. Results for the three-month periods ended March 31, 2003 and 2002
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2003, or any future period.

STRATABASE
SELECTED INTERIM FINANCIAL DATA - CONTINUED

March 31
-------------------------------------------------------------------------------------------
2003 2002
-------------------------------------------------------------------------------------------
(Unaudited) (Unaudited)

STATEMENT OF OPERATIONS DATA

Revenues $ 5,000 $ 280,061

Gross
Profit 4,014 191,251
General and administrative expenses 229,044 108,715
Net income (loss) (243,655) 56,558
Dividends declared - -
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK
Basic $ (0.03) $ 0.01
Diluted (0.03) 0.01
Dividends per share - -
BALANCE SHEET DATA
Total assets $ 769,362 $ 983,038
Long-term obligations $ - $ -
Average shares outstanding-diluted 7,283,372 7,394,486

-7-

RISK FACTORS

An investment in Stratabase common shares involves certain risks. In evaluating
us and our business, investors should carefully consider the following risk
factors in addition to the other information included or incorporated by
reference in this proxy statement/prospectus.

WE HAVE A GOING CONCERN OPINION FROM OUR AUDITORS, INDICATING THE POSSIBILITY
THAT WE MAY NOT BE ABLE TO CONTINUE TO OPERATE.

For the year ended December 31, 2002, we had a loss from operations of
approximately $914,645. During the three months ended March 31, 2003, we
incurred a net loss of $243,655 and had negative working capital. We are in need
of additional financing or a strategic arrangement in order to continue our
planned activities for the remainder of the current fiscal year. These factors,
among others, indicate that Stratabase may be unable to continue operations in
the future as a going concern. These circumstances raise substantial doubt about
our ability to continue as a going concern, as described in the explanatory
paragraph to our independent auditors' report on our 2002 financial statements.
Our plans to deal with this uncertainty include further limited reductions in
expenditures and raising additional capital. There can be no assurance that
management's plans to reduce expenditures, or raise capital can be realized. No
adjustment has been made in the accompanying financial statements to the amounts
and classification of assets and liabilities which could result should
Stratabase be unable to continue as a going concern. If we cannot continue as a
viable entity, our shareholders will not see any return on their investment in
Stratabase.

Risks Relating to the Continuance

WE MAY OWE ADDITIONAL U.S. TAXES AS A RESULT OF THE CONVERSION IF OUR
CONCLUSIONS RELATING TO THE VALUE OF OUR ASSETS ARE INCORRECT.

For U.S. tax purposes, on the date of conversion, we will be treated as though
we sold all of our property and received the fair market value for those
properties. We will be taxed on any income or gain realized on that "sale." If
the fair market value of our assets is greater than our tax basis in our assets,
we will have taxable gain on the deemed "sale".

We reviewed our assets, liabilities and paid-up capital and believe that we will
not owe any U.S. federal income taxes as a result of the conversion/continuance.
In addition, we have concluded that the fair market value of some of our assets
is not in excess of our tax basis of such assets. Accordingly, no U.S. taxes
will be owed as a result of the proposed conversion. It is possible that the
facts on which we based our assumptions and conclusions could change before the
conversion/continuance is completed. We have not applied to the federal tax
authorities for a ruling on this matter and do not intend to do so. We have also
made certain assumptions regarding the tax treatment of this transaction in
order to reach our conclusions and it may be possible for some of these
assumptions to be interpreted in a different manner which would be less
favorable to us. You should understand that it is possible that the federal tax
authorities will not accept our valuations or positions and claim that we owe
taxes as a result of this transaction.

-8-

THE STOCK PRICE OF OUR COMMON SHARES MAY BE VOLATILE. IN ADDITION, DEMAND IN THE
UNITED STATES FOR OUR SHARES MAY BE DECREASED BY THE CHANGE IN DOMICILE.

The market price of our common shares may be subject to significant fluctuations
in response to variations in results of operations and other factors.
Developments affecting the software industry generally, including general
economic conditions and government regulation, could also have a significant
impact on the market price for our shares. In addition, the stock market has
experienced a high level of price and volume volatility. Market prices for the
stock of many similar companies have experienced wide fluctuations which have
not necessarily been related to the operating performance of such companies.
These broad market fluctuations, which are beyond the control of Stratabase,
could have a material adverse effect on the market price of our shares.

We cannot predict what effect, if any, the conversion will have on the market
price prevailing from time to time or the liquidity of our common shares. The
change in domicile may decrease the demand for our shares in the United States.
The decrease may not be offset by increased demand for Stratabase's shares in
Canada.

Risks Relating to Stratabase

IF WE DO NOT GROW BY GENERATING SALES OF OUR PRODUCTS AND SERVICES, WE WILL
NEVER BE ABLE TO ACHIEVE PROFITABILITY.

For the three months ended March 31, 2003 we had a net loss of $243,655. We
anticipate losses from operations to continue as we market our new products. .
If revenues and spending levels are not adjusted accordingly, we may not
generate sufficient revenues to achieve sustained profitability. Even if
sustained profitability is achieved, we may not sustain or increase such
profitability on a quarterly or annual basis in the future.

If we do not grow, we will probably not become profitable. However, if we grow,
develop and increase the size of our business, the demands on our operational
systems will also increase. We will be required to further develop our
operational and financial systems and managerial controls and procedures. We
will also then need to expand, train and manage a larger team of staff. We do
not currently have the resources for this type of expansion and may not be
successful in our expansion efforts. Accordingly, we may limit or even entirely
negate our chances to be profitable if we do not grow or if we cannot manage our
growth.

ALTHOUGH WE INITIALLY EXPERIENCED RAPID GROWTH, NOW THAT WE HAVE REVISED OUR
BUSINESS MODEL IT IS POSSIBLE WE WILL NOT EXPERIENCE ANY FURTHER GROWTH.

Since January 1, 2000 we have experienced a period of development which has
placed, and continues to place, demands on our resources. As of December 31,
2000, we had $1,313,579 in revenues. This number grew to $2,360,452 as of
December 31, 2001, an increase of approximately 80%. Although we experienced
substantial revenue growth during 2000 and 2001, we came to believe that the
specific open-source software business model we were using would not result in
substantial continued growth past that point. Therefore it was decided by

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management to change our business model to focus instead on proprietary
software. This change will continue to place further demands on our operational
and financial resources.

To accommodate our change in direction we must:

- - improve existing operational and financial systems, procedures and
controls;
- - hire, train and manage additional qualified personnel, including
marketing, professional services and software engineering and
development personnel; and
- - effectively manage multiple relationships with our customers, suppliers
and other third parties.

We may not be able to install and implement adequate operational and financial
systems, procedures and controls in an efficient and timely manner, and our
current or planned systems, procedures and controls may not be adequate to
support our future operations. The difficulties associated with installing and
implementing these new systems, procedures and controls may place a significant
burden on our management and our internal resources. If we are unable to sell
our proprietary software services and generate profitability, we may not be able
to continue as a viable business entity.

OUR CHANCES OF SUCCESS WILL BE DIMINISHED IF WE LOSE THE SERVICES OF OUR
OFFICERS OR IF POTENTIAL CONFLICTS OF INTEREST BETWEEN OUR BUSINESS AND OUR
OFFICERS ARE NOT RESOLVED IN OUR FAVOR.

We are highly dependent on the services provided by Mr. Trevor Newton, our
Chairman of the Board, President, Secretary, Treasurer and Chief Operating and
Executive Officer, and Mr. Fred Coombes, our Vice President of Corporate
Development. Neither of these two individuals has an employment agreement with
us nor do we have key-man life insurance on them. Since both may become active
in other unrelated businesses, they may not devote their full-time to our
affairs. This may cause conflicts of interest with our business in terms of time
and business opportunities. These conflicts may not be resolved in our favor.
Our business may be hurt if these conflicts are not resolved in our favor.

SINCE OUR EXPENSES ARE PAID FOR IN CANADIAN DOLLARS, AN UNFAVORABLE CURRENCY
EXCHANGE RATE WOULD DECREASE OUR NET INCOME.

Our operations are located in Canada. Accordingly, the majority of our expenses
are paid in Canadian dollars. We anticipate that most of our revenues will be
received in US dollars. Accordingly, if the value of the Canadian dollar
relative to the US dollar increases, then this could have a negative adverse
effect on our financial condition by reducing our net income.

OUR SOFTWARE MAY CONTAIN DEFECTS THAT MAY HARM OUR REPUTATION, BE COSTLY TO
CORRECT, DELAY REVENUE AND EXPOSE US TO LITIGATION.

Despite testing by us and our customers, errors may be found in our software
after commencement of distribution. If errors are discovered, we may not be able
to successfully correct them in a timely manner or at all. Errors and failures
in our software could result in a loss of, or delay in, market acceptance of our

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software and the associated services that we sell to our customers and could
damage our reputation and our ability to convince users of the benefits of our
software. In addition, we may need to make significant expenditures of capital
resources in order to eliminate errors and failures. If our software fails, our
customers' systems may fail and they may assert claims for substantial damages
against us. In addition, our insurance policies may not adequately limit our
exposure with respect to this type of claim. A software liability claim, even if
unsuccessful, could be costly and time consuming. Claims related to the
occurrence or discovery of these types of errors or failures could result in a
decrease in sales and an increase in costs to remedy the failures in our
software.

WE MAY BE SUED AS A RESULT OF INFORMATION RETRIEVED FROM OUR WEB SITE.

On our Website we publish corporate information, sales material, software
downloads, limited general industry information, investor relations material and
technical support information. We may be subjected to claims for defamation,
negligence, copyright or trademark infringement or other claims relating to the
information we publish on our website. These types of claims have been brought,
sometimes successfully, against online services in the past. We could also be
subjected to claims based on content that is accessible from our website through
links to other websites. Our insurance may not adequately protect us against
these types of claims. Any lawsuit against us would result in a diversion of our
resources from focusing on implementing our business plan.

OUR SECURITIES ARE REFERRED TO AS "PENNY STOCKS" WHICH ARE NOT PERCEIVED
FAVORABLY IN THE MARKET PLACE.

The SEC has adopted regulations which generally define a "penny stock" to be any
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions. Our securities are subject to rules that impose additional
sales practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors (generally
those with a net worth in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse). For transactions covered by
these rules, the broker-dealer must:

o make a special suitability determination for the purchase of such
securities;

o have received the purchaser's written consent to the transaction prior to
the purchase;

o deliver to the purchaser, prior to the transaction, a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny
stock market;

o disclose to the purchaser the commission payable to the broker-dealer and
the registered representative;

o provide the purchaser with current quotations for the securities;

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o if he is the sole market maker, disclose that fact to the purchaser and his
presumed control over the market; and

o provide the purchaser with monthly statements disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks.

Consequently, the "penny stock" rules may restrict the ability of broker-dealers
to sell our securities in the market.

Risks Relating to our Strategy and our Industry

SINCE WE FACE INTENSE COMPETITION FROM OTHER SOFTWARE AND SERVICE SUPPLIERS, AND
NEW COMPETITORS MAY ENTER OUR MARKETS EASILY, WE MAY NOT BE ABLE TO OVERCOME THE
COMPETITION.

The market for Knowledge Worker Automation software, which includes Enterprise
and Customer Relationship Management software and services, is new, rapidly
evolving and intensely competitive. We expect competition to persist and
intensify in the future. We estimate that there are currently over 5,000 private
and public suppliers of Enterprise and Customer Relationship Management software
solutions worldwide and expect this number to grow. In addition, there are a
number of companies with large customer bases and greater financial resources
and name recognition, such as Oracle and Microsoft, which have increased their
presence in the market for Enterprise and Customer Relationship Management
software systems and services. These companies may be able to undertake more
extensive promotional activities, adopt more aggressive pricing policies, and
offer more attractive terms to their customers than we can.

Furthermore, barriers to entry are minimal. Accordingly, it is possible that new
competitors or alliances among competitors may emerge and rapidly acquire
significant market share. These companies may be able to leverage their existing
service organizations and provide higher levels of support on a more
cost-effective basis than we can. If we are not able to compete successfully
with current or future competitors, our business, operating results and
financial condition will be materially adversely affected.

IF WE DO NOT SUCCEED IN THE MARKETING OF OUR PRODUCTS AND SERVICES, WE MAY NOT
GENERATE A SUFFICIENT AMOUNT OF SALES TO EVER GENERATE PROFITS.

We cannot be certain that customers will want to purchase our products or engage
our services. We also cannot be certain that we can attract or retain a
sufficient number of the highly qualified services personnel that the expansion
of our business will need. In addition, this change in our business model has
required, and will continue to require, significant additional expenses and
development, financial and operational resources. These additional resources
will place further demands on our financial and operational resources and may
make it more difficult for us to achieve and maintain profitability.

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We may enter into business combinations and strategic alliances which will
present us with additional challenges.

We may expand our operations or market presence by entering into business
combinations, investments, joint ventures or other strategic alliances with
other companies. Any such transactions may create risks such as:

- - difficulty assimilating the operations, technology and personnel of the
combined companies;
- - disruption of our ongoing business;
- - problems retaining key technical and managerial personnel;
- - one-time in-process research and development charges and ongoing
expenses associated with amortization of goodwill and other purchased
intangible assets;
- - potential dilution to our stockholders;
- - additional operating losses and expenses of acquired businesses; and
- - impairment of relationships with existing employees, customers and
business partners.

Our inability to address these risks could result in not generating sufficient
revenue to achieve profitability.

COMPETITION FOR SKILLED TECHNICAL PERSONNEL IN OUR INDUSTRY IS INTENSE AND OUR
BUSINESS COULD SUFFER IF WE CAN NOT RETAIN OUR EMPLOYEES OR ATTRACT NEW ONES.

Our future performance also depends upon our ability to attract and retain
highly qualified programming, technical, marketing and managerial personnel.
There is intense competition for skilled personnel, particularly in the field of
software engineering. If we do not succeed in retaining our personnel or in
attracting new employees, our business could suffer significantly.

IN ORDER TO KEEP UP WITH TECHNOLOGICAL ADVANCES, WE MAY HAVE TO INCUR ADDITIONAL
COSTS TO MODIFY OUR SERVICES OR INFRASTRUCTURE.

Our market is characterized by rapidly changing technologies, evolving industry
standards, frequent new service introductions and changing customer demands. To
be successful, we must adapt to a rapidly evolving market by continually
enhancing our infrastructure, content, information and services to fulfill our
users' needs. We could incur additional costs if it becomes necessary to modify
services or infrastructure in order to adapt to these or other changes affecting
providers of Internet services. If we have to incur such additional costs, or if
we cannot adapt to changes in the marketplace, our net income will be directly
adversely affected.

IF WE DO NOT IMPROVE OUR SALES FORCE, WE MAY NOT GENERATE SIGNIFICANT REVENUES
OR BECOME PROFITABLE.

Since eliminating our second office we have lost the services of our two
salespeople, and currently do not have any dedicated fulltime salespeople and
are looking to find suitable replacements. We do not have current relationships
with outside sales personnel or distributors. In order to grow, we must develop

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an effective sales capability. Our ability to do so successfully involves a
number of factors. They include the competition in hiring and retaining suitable
personnel, our ability to integrate and motivate personnel and the length of
time it takes for new personnel to become effective. While we intend to market
our products and services via direct mail advertising and the Internet, there is
no assurance that these marketing efforts will be successful. Our failure to
develop and maintain an effective sales infrastructure would have a negative
effect upon our business prospects as we will not be able to generate a
sufficient amount of sales.

CONTINUANCE AND CONVERSION PROPOSAL

BACKGROUND OF THE PROPOSAL

The Board of Directors of Stratabase has determined that it is advisable to
change Stratabase's domicile from Nevada to Canada. Management has determined
that a conversion will be the most effective means of achieving the desired
change of domicile. The Nevada Revised Statutes allow a corporation that is duly
incorporated, organized, existing and in good standing under the Nevada law to
convert into a foreign entity pursuant to a plan of conversion approved by the
stockholders of the Nevada corporation.

Under the proposed continuance and conversion, if the stockholders approve the
plan of conversion then articles of conversion will be filed with the Secretary
of State of Nevada. Articles of continuance will also be filed with the Director
of Business Corporations in Canada. Upon the filing, Stratabase will be
continued as a Canadian company and will be governed by the laws of Canada. The
assets and liabilities of the Canadian company immediately after the
consummation of the conversion will be identical to the assets and liabilities
of the Nevada company immediately prior to the conversion. The current officers
and directors of the Nevada company will be the officers and directors of the
Canadian company. The change of domicile will not result in any material change
to the business of Stratabase and will not have any effect on the relative
equity or voting interests of our stockholders. Each previously outstanding
share of Stratabase common stock will become one share of the Canadian company.
The change in domicile will, however, result in changes in the rights and
obligations of current Stratabase stockholders under applicable corporate laws.
For an explanation of these differences see "Comparative Rights of
Stockholders". In addition, the merger may have adverse tax consequences for
stockholders. For a more detailed explanation of the circumstances to be
considered in determining the tax consequences, see "Material United States
Federal Tax Consequences" and "Material Canadian Tax Consequences."

Pursuant to Section 92A.120 of the Nevada Revised Statutes, the board of
directors of Stratabase has adopted a resolution approving the plan of
conversion. The effect of this conversion will be to change the domicile of
Stratabase from Nevada to British Columbia. Such resolution shall be submitted
to the stockholders of Stratabase at a special meeting. Due notice of the time,
place and purpose of the meeting shall be mailed to each holder of stock,
whether voting or non-voting, at the address of the stockholder as it appears on
the records of the corporation, at least 20 days prior to the date of the
meeting. At the meeting, the resolution shall be considered and a vote taken for
its adoption or rejection. If the holders of a majority of the outstanding
shares of Stratabase vote for the adoption of the resolution, Stratabase shall
file with the Secretary of State of Nevada the Plan of Conversion and file a
notice of registered office, a notice of directors and Articles of Continuance
with the Director under the Canada Business Corporations Act. The current
officers and directors of the Nevada company will be the officers and directors
of the Canadian company. Upon the filing of the Plan of Conversion in accordance
with Section 92A.205 of the Nevada Revised Statutes and payment to the Secretary

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of State of all fees prescribed thereto, the conversion shall become effective
in accordance with Section 92A.240 of the Nevada Revised Statutes. Upon receipt
of the Articles of Continuance and payment of all applicable fees, the Director
shall issue a Certificate of Continuance, and the continuance shall be effective
on the date shown in the certificate.

REASONS FOR THE CHANGE OF DOMICILE

We believe that the continuance to Canada will more accurately reflect our
operations, which have always been in Canada. We have never had any employees or
operations in the U.S. We also believe the continuance to Canada will enable us
to benefit from scientific research and development grants that are not
available to non-Canadian corporations, and we consider this to be in the best
interest of our shareholders. For example, in the past we have not been able to
realize all the benefits of the Scientific Research and Experimental Development
program in Canada, due to the jurisdiction of our incorporation. This program
provides a credit from the Canadian government for the amount of monies spent on
certain research and development activities, including software programming
expenditures which fall within certain guidelines. Although we have applied for
and obtained this credit in previous years, it resulted in no net gain to the
company due to the fact our jurisdiction of incorporation is outside of Canada.
As a Canadian company, we believe that Stratabase will be able to receive the
full benefit of the Scientific Research and Experimental Development program in
future. We consider this to be in the best interest of shareholders. The Board
also believes that continuing Stratabase to Canada more accurately reflects the
nature of our business because it is the jurisdiction in which our business has
always been based. Furthermore, all of our assets and operations, as well as our
officers and directors, are located in Canada, and a majority of our issued and
outstanding common stock is owned of record by non-U.S. residents.

Accordingly, upon the continuance, we will be considered a "foreign private
issuer" under the Securities Act of 1933, as amended. Before our continuance in
Canada, we prepared our financial statements in accordance with generally
accepted accounting principles ("GAAP") in the United States. As a Canadian
incorporated issuer, we will be required to prepare our annual and interim
financial statements in accordance with Canadian generally accepted accounting
principles. For purpose of our annual disclosure obligations in the United
States, we will annually file in the United States consolidated financial
statements prepared in accordance with Canadian GAAP together with a
reconciliation to US GAAP. In addition, as a foreign private issuer Stratabase
will not have to file quarterly reports with the SEC nor will its directors,
officers and 10% stockholders be subject to Section 16(b) of the Exchange Act.

EFFECTIVE TIME OF THE CONVERSION

The continuance and conversion will become effective upon:

1. The approval of the plan of conversion by the stockholders of
Stratabase; and

2. The delivery of duly executed articles of conversion to the
Secretary of State of the State of Nevada in accordance with
Section 92A.205 of the Nevada Revised Statutes.

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3. The issuance of a Certificate of Continuance by the Director
of Business Corporations under the Canada Business
Corporations Act in accordance with section 262 of that Act.

We anticipate that the Articles of Conversion and Articles of Continuance will
be filed promptly after the special meeting of Stratabase stockholders.

CONDITIONS TO THE CONSUMMATION OF THE CONVERSION

The Board of Directors of Stratabase has adopted and approved the plan of
conversion. Therefore, the only condition required for Stratabase to adopt the
plan of conversion and become continued into Canada is that the stockholders
must duly approve the plan of conversion. The only material consent, approval or
authorization of or filing with any governmental entity required to consummate
the conversion are the approval of the stockholders of Stratabase in accordance
with Section 92A.120 of the Nevada Revised Statutes, the filing of the Articles
of Conversion with the Secretary of State of Nevada and the filing of articles
of continuance with the Canadian Director of Business Corporations.

EXCHANGE OF SHARE CERTIFICATES

No exchange of certificates that, prior to the effective time of the
continuance, represented shares of Stratabase common stock is required with
respect to the continuance and the transactions contemplated by the conversion
plan. Promptly after the effective time of the conversion, we shall mail to each
record holder of certificates that immediately prior to the effective time of
the conversion represented shares of our common stock, a letter of transmittal
and instructions for use in surrendering those certificates. Upon the surrender
of each certificate formerly representing Stratabase stock, together with a
properly completed letter of transmittal, we shall issue in exchange a share
certificate of Stratabase, the Canadian company and the stock certificate
representing shares in the Nevada company shall be cancelled. Until so
surrendered and exchanged, each Stratabase stock certificate shall represent
solely the right to receive shares in the new company.

STOCK OPTIONS

As of the effective time of the conversion, all warrants and options to purchase
shares of Stratabase common stock granted or issued prior to the effective time
of the conversion will remain warrants options to purchase shares in Stratabase
as continued under the Canada Business Corporations Act.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE CONTINUANCE AND PLAN OF
CONVERSION DESCRIBED IN THIS PROXY/PROSPECTUS AND RECOMMENDS THAT STOCKHOLDERS
APPROVE THE CONTINUANCE AND PLAN OF CONVERSION.

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In reaching its decision, the board reviewed the fairness to Stratabase and its
stockholders of the proposed continuance and considered, without assigning
relative weights to, the following factors:

- The fact that all of Stratabase's assets and employees and
current principal executive office are currently located in
Canada, and always have been.

- The belief of the board of directors that the continuance will
provide greater access to certain research and development
grants which are more readily available to Canadian
incorporated companies.

- The belief that there will be minimal U.S. tax consequences of
the proposed continuance.

- The fact that the stockholders have an opportunity to vote on
the proposed continuance.

Without relying on any single factor listed above more than any other factor,
the board of directors, based upon their consideration of all such factors taken
as a whole, have concluded that the proposals are fair to Stratabase and its
stockholders. ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE PROPOSAL CONTAINED IN THIS PROXY/PROSPECTUS.

VOTING AND PROXY INFORMATION

SPECIAL MEETING

A special meeting of the Stratabase stockholders will be held at _________ p.m.
on _________, 2003, at the offices of Ehrenreich Eilenberg & Krause LLP, 11 East
44th Street, New York, New York 10017 (or at any adjournments or postponements
thereof) to consider and vote on a proposal to effect a plan of conversion,
which will have the effect of transferring the jurisdiction of incorporation of
Stratabase from the State of Nevada to Canada, and to vote on any other matters
that may properly come before such meeting. The presence, in person or by proxy,
of stockholders holding a majority of the outstanding shares of Stratabase
common stock will constitute a quorum. The vote of any stockholder who is
represented at the special meeting by proxy will be cast as specified in the
proxy. If no vote is specified in a duly executed and delivered proxy, such vote
will be cast for the proposal. Any stockholder of record who is present at the
special meeting in person will be entitled to vote at the meeting regardless of
whether the stockholder has previously granted a proxy for the special meeting.

THE BOARD OF DIRECTORS OF STRATABASE HAS APPROVED THE CONTINUANCE AND RECOMMENDS
THAT STOCKHOLDERS VOTE IN FAVOR OF ITS APPROVAL.

PROXY SOLICITATION

The total cost of soliciting proxies will be borne by us. Proxies may be
solicited by officers and regular employees of Stratabase without extra
remuneration, by personal interviews, telephone and by electronic means. We

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anticipate that banks, brokerage houses and other custodians, nominees and
fiduciaries will forward soliciting material to stockholders and those persons
will be reimbursed for the related out-of-pocket expenses they incur.

RECORD DATE

Only those stockholders of record at the close of business on ______________,
2003, as shown in Stratabase's records, will be entitled to vote or to grant
proxies to vote at the special meeting.

VOTE REQUIRED FOR APPROVAL

Approval of the conversion plan requires the affirmative vote of the
stockholders of Stratabase holding a majority of the shares of Stratabase common
stock. Abstentions and broker "non-votes" will have the effect of votes for the
approval of the plan. As of April 10, 2003, there were 8,233,372 shares of
common stock outstanding held by approximately 100 holders of record. The
directors and executive officers of Stratabase directly own, in the aggregate,
3,987,700 shares (approximately 48.3%) of the total number of shares of
Stratabase common stock outstanding at the record date. These persons have
indicated that they will vote all of their shares for the approval of the
proposal.

PROXIES INSTRUCTION

Each Stratabase stockholder as of ___________, 2003, will receive a proxy card.
A stockholder may grant a proxy to vote for or against, or to abstain from
voting on, the proposals by marking his/her proxy card appropriately and
executing it in the space provided.

Holders of our common stock whose names appear on the stock records of
Stratabase should return their proxy card to our transfer agent, Securities
Transfer Corp., in the envelope provided with the proxy card. Stockholders who
hold their common stock in the name of a bank, broker or other nominee should
follow the instructions provided by their bank, broker or nominee on voting
their shares.

TO BE EFFECTIVE, A PROXY CARD MUST BE RECEIVED PRIOR TO THE SPECIAL MEETING. ANY
PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION
INDICATED ON THE PROXY CARD. A PROPERLY EXECUTED AND RETURNED PROXY CARD IN
WHICH NO SPECIFICATION IS MADE WILL BE VOTED FOR THE PROPOSAL.

If any other matters are properly presented at the special meeting for
consideration, including consideration of a motion to adjourn the meeting to
another time and/or place (including adjournment for the purpose of soliciting
additional proxies), the persons named in the proxy card and acting under its
authority will have discretion to vote on such matters in accordance with their
best judgment.

PROXY REVOCATION

Holders of Stratabase common stock whose names appear on the stock records of
Stratabase may revoke their proxy card at any time prior to its exercise by:

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giving written notice of such revocation to the corporate Secretary;

appearing and voting in person at the special meeting; or

properly completing and executing a later-dated proxy and delivering it
to the corporate Secretary at or before the special meeting.

Presence without voting at the special meeting will not automatically revoke a
proxy, and any revocation during the meeting will not affect votes previously
taken. Stratabase stockholders who hold their Stratabase common stock in the
name of a bank, broker or other nominee should follow the instructions provided
by their bank, broker or nominee in revoking their previously voted shares.

PROXY VALIDITY

All questions as to the validity, form, eligibility (including time of receipt),
and acceptance of proxy cards will be determined by the Stratabase board of
directors. Any such determination will be final and binding. The Stratabase
board of directors will have the right to waive any irregularities or conditions
as to the manner of voting. Stratabase may accept proxies by any reasonable form
of communication so long as Stratabase can be reasonably assured that the
communication is authorized by the Stratabase stockholder.

DISSENTERS' RIGHTS

Under Chapter 92A of the Nevada Revised Statutes, stockholders of record are
entitled to the fair value of all or a portion of their shares in certain
corporate transactions, such as a merger. However, such appraisal rights are not
available in a plan of conversion.

MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES

GENERAL

The following sections summarize material provisions of United States federal
income tax laws that may affect our stockholders and us. Although this summary
discusses the material United States federal income tax considerations arising
from and relating to the continuance, it does not purport to discuss all of the
United States consequences that may be relevant to our stockholders, nor will it
apply to the same extent or in the same way to all stockholders. The summary
does not describe the effect of the U.S. federal estate tax laws or the effects
of any state or local tax law, rule or regulation, nor is any information
provided as to the effect of any other United States or foreign tax law, other
than the income tax laws of the United States to the extent specifically set
forth herein.

We have not sought or obtained an opinion of tax counsel with respect to this
summary and no assurance can be given that new or future legislation,
regulations or interpretations will not significantly change the tax

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considerations described below and any such change may apply retroactively. The
tax discussion set forth below is based upon the facts set out in this
registration statement/prospectus and upon additional information possessed by
our management and upon representations of our management. The tax discussion is
included for general information purposes only. It is not intended to be, nor
should it be construed to be, legal or tax advice to any particular stockholder.
The following does not address all aspects of taxation that may be relevant to
you in light of your individual circumstances and tax situation. YOU ARE
STRONGLY ADVISED AND ARE EXPECTED TO CONSULT WITH YOUR OWN LEGAL AND TAX
ADVISORS REGARDING THE UNITED STATES INCOME TAX CONSEQUENCES OF THE CONTINUANCE
IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

This portion of the summary applies to U.S. holders who own our common shares as
capital assets. U.S. holders include individual citizens or residents of the
United States, corporations (or entities treated as corporations for U.S.
federal income tax purposes), and partnerships organized under the laws of the
United States or any State thereof or the District of Columbia. Trusts are U.S.
holders if they are subject to the primary supervision of a U.S. court and the
control of one or more U.S. persons with respect to substantial trust decisions.
An estate is a U.S. holder if the income of the estate is subject to U.S.
federal income taxation regardless of the source of the income. U.S. holders who
own interests indirectly through one or more non-U.S. entities or carry on
business outside the United States through a permanent establishment or fixed
place of business, or U.S. holders who hold an interest other than as a common
shareholder, should consult with their tax advisors regarding their particular
tax consequences.

This summary also describes certain U.S. federal income tax consequences to
Canadian holders following the continuance, who are specifically those persons
resident in Canada who own our common shares as capital assets. The discussion
is limited to the U.S. federal income tax consequences to Canadian holders of
their ownership and disposition of the common shares of Stratabase as a result
of the continuance and assumes the Canadian holders have no other U.S. assets or
activities.

This discussion is based on the Internal Revenue Code of 1986, as amended,
adopted and proposed regulations thereunder, Internal Revenue Service ("IRS")
rulings and pronouncements, reports of congressional committees, judicial
decisions, and current administrative practice, all of which are subject to
change, perhaps with retroactive effect. Any such change could alter the tax
consequences discussed below. No ruling from the IRS will be requested
concerning the U.S. federal income tax consequences of the continuance. The tax
consequences set forth in the following discussion are not binding on the IRS or
the courts and no assurance can be given that contrary positions will not be
successfully asserted by the IRS or adopted by a court. As indicated above, this
discussion does not address all aspects of U.S. federal income taxation that may
be relevant to particular U.S. holders in light of their personal circumstances
or to U.S. holders subject to special treatment under the U.S. Internal Revenue
Code, including, without limitation, banks, financial institutions, insurance
companies, tax-exempt organizations, broker-dealers, S corporations, individual
retirement and other deferred accounts, application of the alternative minimum
tax rules, holders who received our stock as compensation, persons who hold
notes or stock as part of a hedge, conversion, or constructive sale transaction,
straddle, or other risk-reduction transaction, persons that have a "functional
currency" other than the U.S. dollar, and persons subject to taxation as

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expatriates. Furthermore, this discussion does not address the tax consequences
applicable to holders that are treated as partnerships or other pass-through
entities for U.S. federal income tax purposes.

This summary does not address the U.S. federal income tax consequences to a U.S.
holder of the ownership, exercise, or disposition of any warrants or
compensatory options.

U.S. TAX CONSEQUENCES TO US

While the continuance of Stratabase from Nevada to Canada is actually a
migration of the corporation from Nevada to Canada, for tax purposes, the
continuance is treated as the transfer of our assets to the Canadian company in
exchange for stock of the Canadian company. This is to be followed by a
distribution of the stock in the Canadian company to our stockholders, and then
the exchange by Stratabase Nevada's stockholders of their Stratabase Nevada
stock for Stratabase Canada stock. As a Nevada company, we must recognize gain
(but not loss) on the assets held by us at the time of the conversion to the
extent that the fair market value of any of our assets exceeds their respective
basis in the assets. The calculation of any potential gain will need to be made
separately for each asset held by Stratabase Nevada. No loss will be allowed for
any asset that has a taxable basis in excess of its fair market value. We
believe that the current fair market value of the assets held by Stratabase do
not exceed their respective basis. Accordingly, we are not expecting Stratabase
Nevada to recognize taxable gains as a result of the continuance.

U.S. TAX CONSEQUENCES TO U.S. AND CANADIAN SHAREHOLDERS

The continuance should be treated by shareholders as the exchange by you, our
shareholders, of your stock for stock of the Canadian company. The shareholders
will not be required to recognize any U.S. gain or loss on this transaction. A
shareholder's adjusted basis in the shares of Stratabase Canada received in the
exchange will be equal to such shareholder's adjusted basis in the shares of
Stratabase Nevada surrendered in the exchange. A shareholder's holding period in
the shares of Stratabase Canada received in the exchange should include the
period of time during which such shareholder held his or her shares in
Stratabase Nevada.

CONTROLLED FOREIGN CORPORATION CONSIDERATIONS

There is currently one U.S. shareholder of Stratabase Nevada that owns (directly
or indirectly) at least 10% of the Stratabase Nevada shares. However, the total
combined ownership of all U.S. shareholders is less than 50%. Therefore, the
Controlled Foreign Corporation ("CFC") rules under Internal Revenue Code ("IRC")
Sections 951 - 959 will not apply to Stratabase Canada and its U.S. shareholders
immediately after the continuance. Any United States person who owns (directly
or indirectly) 10% or more of the total combined voting power of all classes of
stock entitled to vote of a foreign corporation, such as Stratabase Canada, will
be considered a "United States shareholder" under the CFC rules. If, in the
future, "United States shareholders" (as defined above) own more than 50% of the
total combined voting power of all classes of Stratabase Canada stock entitled
to vote or own more than 50% of the value of Stratabase Canada stock, Stratabase
Canada will be considered to be a CFC for U.S. tax purposes. In such situation,
the "United States shareholders" would likely be subject to the effects of the
CFC rules, and should consult with their tax advisors regarding their particular
tax consequences.

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FOREIGN PERSONAL HOLDING COMPANY CONSIDERATIONS

There is not currently a group of five or fewer U.S. shareholders of Stratabase
Nevada that owns (directly or indirectly) more than 50% of the Stratabase Nevada
shares. Therefore, the Foreign Personal Holding Company ("FPHC") rules under IRC
Sections 551 - 558 will not apply to Stratabase Canada immediately after the
continuance. If, in the future, any group of five or fewer U.S. shareholders
owns (directly or indirectly) more than 50% of Stratabase Canada's stock, the
U.S. shareholders may be subject to the FPHC rules, depending on the type of
income earned by Stratabase. Should that situation occur, the U.S. shareholders
should consult with their tax advisors regarding their particular tax
consequences.

PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS

After the continuance, Stratabase Canada and every U.S. shareholder of
Stratabase Canada will need to annually evaluate whether Stratabase Canada is a
Passive Foreign Investment Company ("PFIC") under IRC Sections 1291 - 1298. If,
at any time after the continuance, Stratabase Canada were considered a PFIC,
Stratabase and all U.S. shareholders of Stratabase Canada would need to consider
various potential reporting requirements, tax elections, and tax liabilities
imposed under the PFIC rules. In such situation, the company and all U.S.
shareholders should consult with their tax advisors regarding their particular
tax consequences.

If Stratabase Canada generates revenues in any tax year that are at least 75%
passive income (dividends, interest, royalties, rents, annuities, foreign
currency gains, and gains from the sale of assets generating passive income),
Stratabase Canada will be considered a PFIC for that year and for all future
years. In addition, if 50% or more of the gross average value of Stratabase
Canada's assets in any tax year consist of assets that would produce passive
income (including cash and cash equivalents held as working capital), Stratabase
Canada will be considered a PFIC for that year and for all future years.

POST-CONTINUANCE U.S. TAXATION OF INCOME, GAINS AND LOSSES

After the continuance, Stratabase Canada will not have any U.S. activities or
operations. As long as Stratabase Canada does not develop a permanent
establishment in the U.S., the operations of Stratabase Canada will not be
subject to U.S. income tax. If Stratabase Canada receives dividends, interest,
rent, or royalties from any U.S. entity, those amounts will be subject to
withholding tax (which will be withheld and remitted to the US Treasury by the
U.S. entity paying the dividends or interest) under the Convention Between the
United States of America and Canada With Respect to Taxes on Income and Capital
("Canada - United States income tax treaty"). Depending on the particular
situation, such amounts may be available to offset taxes imposed by the country
of residence of a particular stockholder.

POST-CONTINUANCE SALE OF STRATABASE CANADA SHARES

A U.S. shareholder who sells his or her shares of Stratabase Canada will
generally recognize capital gain (or loss) equal to the amount by which the cash
received pursuant to sale of the shares exceeds (or is exceeded by) such
holder's adjusted basis in the shares surrendered. If the U.S. shareholder's

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holding period for the Stratabase Canada shares (which includes the holding
period for the Stratabase Nevada shares) is less than one year, the U.S.
shareholder will recognize ordinary income (or loss) on the sale of his or her
shares.

POST-CONTINUANCE DIVIDENDS ON STRATABASE CANADA SHARES

Any dividends received by U.S. shareholders of Stratabase Canada will be
recognized as ordinary income by the shareholders for U.S. tax purposes. Any
Canadian tax withheld by Canada Customs & Revenue Agency on such dividends will
be available as a foreign tax credit to the U.S. shareholders. In general, any
Canadian income tax withheld from dividends paid to U.S. shareholders can be
used by the shareholder to offset the U.S. income tax assessed on the dividends.
The amount of the Canadian taxes that can be used as a foreign tax credit will
depend on the particular tax situation of each U.S. shareholder. Each U.S.
shareholder should consult with a tax advisor regarding the calculation of any
available foreign tax credit available in his or her particular tax
consequences.

MATERIAL CANADIAN TAX CONSEQUENCES

GENERAL

The following sections summarize material provisions of Canadian federal income
tax laws that may affect our stockholders and us. Although this summary
discusses the material Canadian federal income tax considerations arising from
and relating to the continuance, it does not purport to discuss all of the
Canadian tax consequences that may be relevant to our stockholders, nor will it
apply to the same extent or in the same way to all stockholders. We have not
sought or obtained an opinion of tax counsel with respect to this summary and no
assurance can be given that new or future legislation, regulations or
interpretations will not significantly change the tax considerations described
below and any such change may apply retroactively. The summary does not describe
the effects of any provincial or local tax law, rule or regulation, nor is any
information provided as to the effect of any other Canadian federal or foreign
tax law, other than the income tax laws of the Canada to the extent specifically
set forth herein.

The tax discussion set forth below is based upon the facts set out in this
registration statement/prospectus and upon additional information possessed by
our management and upon representations of our management. The tax discussion is
included for general information purposes only. It is not intended to be, nor
should it be construed to be, legal or tax advice to any particular stockholder.
The following does not address all aspects of taxation that may be relevant to
you in light of your individual circumstances and tax situation. YOU ARE
STRONGLY ADVISED AND ARE EXPECTED TO CONSULT WITH YOUR OWN LEGAL AND TAX
ADVISORS REGARDING THE CANADIAN INCOME TAX CONSEQUENCES OF THE CONTINUANCE IN
LIGHT OF YOUR PARTICULAR CIRCUMSTANCES.

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CANADIAN INCOME TAX CONSIDERATIONS

The following general summary is our understanding of the Canadian federal
income tax consequences of the proposed continuance of Stratabase Nevada to
Canada as it applies to Stratabase Canada and to those individual Canadian
resident stockholders to whom shares of the Nevada company constitute "capital
property" for the purposes of the Income Tax Act (Canada) (the "Act"). This
summary also describes the principal Canadian federal income tax consequences of
the proposed continuance of Stratabase Nevada to Canada to non-resident
individual stockholders who do not carry on business in Canada. Nevada
stockholders should consult their own Canadian tax advisors on the Canadian tax
consequences of the proposed continuance.

This summary is based upon our understanding of the current provisions of the
Act, the regulations thereunder in force on the date hereof (the "Regulations"),
any proposed amendments (the "Proposed Amendments") to the Act or Regulations
previously announced by the Federal Minister of Finance and our understanding of
the current administrative and assessing policies of the Canada Customs and
Revenue Agency. This description is not exhaustive of all possible Canadian
federal income tax consequences and does not take into account or anticipate any
changes in law, whether by legislative, governmental or judicial action other
than the Proposed Amendments, nor does it take into account provincial or
foreign tax considerations, which may differ significantly from those discussed
herein.

CONSEQUENCES OF CONTINUANCE TO CANADA

CANADIAN CORPORATION

As a result of being granted articles of continuance to Canada, Stratabase
Canada will be deemed to have been incorporated in Canada from that point
onwards, and not to have been incorporated elsewhere.

NOT FOREIGN PROPERTY

As of the date of continuance, Stratabase Canada shares will not be considered
foreign property for investment by a registered pension plan, registered
retirement savings plan or deferred profit sharing plan. It is not likely that
the Stratabase Canada shares will ever be considered foreign property.

DEEMED DISPOSITION

As a result of the continuance to Canada, Stratabase Canada will be deemed to
have disposed of, and immediately reacquired, all of its assets at their then
fair market value. Gains arising on the deemed disposition of taxable Canadian
property (if any) are taxable in Canada (subject to exclusion by the
Canada-United States income tax treaty). Since all of our property is located in
Canada, all of our property is taxable Canadian property.

Pre-continuance accrued gains on a subsequent disposition by Stratabase Canada
are not subject to further Canadian tax. Although pre-continuance accrued losses
are available for future use in Canada, we do not anticipate having any loss

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carry-forwards subsequent to the continuance. The effect of this provision is
that Stratabase Canada's assets are re-stated for Canadian income tax purposes
at their fair market value as at the time of continuance to Canada.

NEW FISCAL PERIOD

We will be deemed to have a year-end immediately prior to our continuance to
Canada. For Canadian income tax purposes, Stratabase Canada will be able to
choose a new fiscal year end falling within the 12 months following the date of
continuance.

CONSEQUENCES OF CONTINUANCE TO CANADIAN STOCKHOLDERS

NO DEEMED DISPOSITION

A stockholder will not realize a disposition of their Stratabase Nevada shares
on the continuance to Canada. For Canadian income tax purposes, the income tax
cost of their Stratabase Canada shares will be equal to the income tax cost of
their Nevada shares. On a subsequent sale of Stratabase Canada shares, a capital
gain or loss will result equal to the proceeds of disposition less the income
tax cost of their Stratabase Canada shares and any related selling costs.

DEEMED DIVIDEND

The deemed disposition of Stratabase Nevada's assets will result in a decrease
in the income tax cost of its assets. To the extent there is an adjustment in
the income tax cost of Stratabase Canada's assets, a corresponding adjustment to
the paid up capital of Stratabase Canada's shares will be made to ensure their
paid up capital does not exceed the difference between the adjusted income tax
cost of its assets (as adjusted by the deemed disposition) and its outstanding
liabilities. Since a decrease in Stratabase Canada's paid up capital is
required, such decrease is allocated pro-rata amongst Stratabase Canada's
shares.

If an increase in the income tax cost of Stratabase Canada's asset values is
realized, Stratabase Canada may elect to increase the paid up capital of its
shares prior to continuing to Canada. In the event Stratabase Canada makes such
an election, it will be deemed to have paid a dividend to its stockholders.
Canadian stockholders that are deemed to have received such a dividend must
include that dividend in income. In such a situation, the amount of the dividend
will be added to the stockholders' income tax cost of their Stratabase Canada
shares. Since the tax consequences would be detrimental to individual
stockholders if we were to increase the income tax cost, we will not be making
such an election.

INTEREST EXPENSE

Stratabase Nevada's continuance to Canada will not affect the deductibility of
interest incurred on money borrowed to purchase shares of Corp Nevada.
Generally, interest that is currently deductible will continue to be deductible
by a stockholder after our continuance to Canada, as long as the stockholder
continues to own Stratabase Canada shares.

CONSEQUENCES OF CONTINUANCE TO NON-RESIDENT STOCKHOLDERS

On the continuance of to Canada, the income tax cost of a non-resident's
Stratabase Canada shares will be equal to their fair market value at the time of

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continuance to Canada. A subsequent disposition of Stratabase Canada shares by a
non-resident stockholder will not be subject to tax in Canada provided his
shares are not taxable Canadian property.

To the extent Stratabase Canada pays a dividend to a non-resident stockholder,
such dividend is subject to a 25% withholding tax (to be reduced by an income
tax treaty between Canada and the non-resident stockholder's country of
residence). Under the treaty, most shareholders of Stratabase Canada would be
subject to a 15% withholding tax. Any shareholders that are corporation and that
own 10% or more of Stratabase Canada would be subject to a 5% withholding tax.

COMPARATIVE RIGHTS OF STOCKHOLDERS

After the conversion of Stratabase, the stockholders of the former Nevada
corporation will become the holders of shares in the capital of a Canadian
company organized under the Canada Business Corporations Act. Differences
between the Nevada Revised Statutes and the Canada Business Corporations Act,
will result in various changes in the rights of stockholders of Stratabase. The
following is a summary description of the more significant differences. This
summary description is qualified by reference to the Nevada Revised Statutes and
the Canada Business Corporations Act.

ELECTION AND REMOVAL OF DIRECTORS

NEVADA. Any director, or the entire Board, may be removed with or without cause,
but only by the vote of not less than two thirds of the voting power of the
company at a meeting called for that purpose. The directors may fill vacancies
on the board.

CANADA. Any director, or the entire Board, may be removed with or without cause,
but only by a majority vote at a meeting of shareholders called for that
purpose. The directors may fill vacancies on the Board.

INSPECTION OF STOCKHOLDERS LIST

NEVADA. Under Nevada law, any stockholder of record of a corporation who has
held his shares for more than six months and stockholders holding at least 5% of
all of its outstanding shares, is entitled to inspect, during normal business
hours, the company's stock ledger and make extracts therefrom. It also provides
that a Nevada company may condition such inspection right upon delivery of a
written affidavit stating that inspection is not desired for any purpose not
related to the stockholder's interest in the company.

CANADA. Under Canadian law, where a corporation has previously distributed its
shares to the public, shareholders and creditors of a corporation may, on
payment of a reasonable fee may require a corporation to furnish a list setting
out the names and addresses of the stockholders of a corporation and the number
of shares held by each stockholder. In order to obtain such a list, an affidavit
must also be provided confirming that the list will only be used in connection
with an effort to influence voting of the stockholders, an offer to acquire
securities of the corporation or any other matter relating to the affairs of the
corporation.

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TRANSACTIONS WITH OFFICERS AND DIRECTORS

NEVADA. Under Nevada law, contracts or transactions in which a director or
officer is financially interested are not automatically void or voidable if (i)
the fact of the common directorship, office or financial interest is known to
the board of directors or committee, and the board or committee authorizes,
approves or ratifies the contract or transactions in good faith by a vote
sufficient for the purpose, without counting the vote or votes of the common or
interested director or directors, or (ii) the contract or transaction, in good
faith, is ratified or approved by the holders of a majority of the voting power,
(iii) the fact of common directorship, office or financial interest known to the
director or officer at the time of the transactions is brought before the board
of directors for actions, or (iv) the contract or transaction is fair to the
corporation at the time it is authorized or approved. Common or interested
directors may be counted to determine presence of a quorum and if the votes of
the common or interested directors are not counted at the meeting, then a
majority of directors may authorize, approve or ratify a contract or
transaction.

CANADA. Under Canadian law, a material contract or transaction between a
corporation and one or more of its directors or officers, or between a
corporation and another entity in which a director or officer of the corporation
is a director or officer or has a material interest in is not invalid if the
director or officer has disclosed the nature and extent of his interest and the
contract or transaction was approved by the directors. Even if such disclosure
is not made, a director or officer will not be accountable to the corporation
for any profit realized in such a transaction, and the contract or transaction
will not be invalid only by reason of such interest, if the contract or
transaction is approved by a special resolution at a meeting of shareholders,
disclosure of his interest sufficient to indicate its nature is made before
shareholder approval, and the contract or transaction is reasonable and fair to
the corporation at the time it was approved. Interested directors may be counted
for the purpose of determining a quorum at a meeting of directors called to
authorize the contract.

LIMITATION ON LIABILITY OF DIRECTORS; INDEMNIFICATION OF OFFICERS
AND DIRECTORS

NEVADA. Nevada law provides for discretionary indemnification made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made either: (i) by the stockholders;
(ii) by the board of directors by majority vote of a quorum consisting of
directors who were not parties to the actions, suit or proceeding; (iii) if a
majority vote of a quorum consisting of directors who were not parties to the
actions, suit or proceeding so orders, by independent legal counsel in a written
opinion; or (iv) if a quorum consisting of directors who were not parties to the
actions, suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion. The articles of incorporation, the bylaws or an agreement
made by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the actions, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions do not affect any
right to advancement of expenses to which corporate personnel other than
directors or officers may be entitled under any contract or otherwise by law.
The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to Nevada law does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be entitled under the

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articles of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding office, except that
indemnification, unless ordered by a court or for the advancement of expenses,
may not be made to or on behalf of any director or officer if his acts or
omissions involved intentional misconduct, fraud or a knowing violation of the
law and was material to the cause of action. In addition, indemnification
continues for a person who has ceased to be a director, officer, employee or
agent and inures to the benefit of the heirs, executors and administrators of
such a person.

CANADA. Canadian law provides that a corporation may indemnify a director or
officer or former director or officer of the corporation against costs, charges
and expenses, including an amount paid to settle an action or satisfy a judgment
reasonably incurred by the individual, in respect of a proceeding to which such
person was a party by reason of being or having been a director or officer, if
the person: (i) acted honestly and in good faith with a view to the best
interests of the corporation; and (ii) in the case of a criminal or
administrative proceeding enforced by a monetary penalty, he had reasonable
grounds for believing his conduct was lawful. Where the indemnity is in respect
of an action by or on behalf of the corporation for a judgment in its favour to
which the director or officer is made party, such indemnity is only available if
the director or officer fulfills those conditions.

VOTING RIGHTS WITH RESPECT TO EXTRAORDINARY CORPORATE TRANSACTIONS

NEVADA. Approval of mergers and consolidations and sales, leases or exchanges of
all or substantially all of the property or assets of a corporation, whether or
not in the ordinary course of business, requires the affirmative vote or consent
of the holders of a majority of the outstanding shares entitled to vote, except
that, unless required by the articles of incorporation, no vote of stockholders
of the corporation surviving a merger is necessary if: (i) the merger does not
amend the articles of incorporation of the corporation; (ii) each outstanding
share immediately prior to the merger is to be an identical share after the
merger, and (iii) either no common stock of the corporation and no securities or
obligations convertible into common stock are to be issued in the merger, or the
common stock to be issued in the merger, plus that initially issuable on
conversion of other securities issued in the merger does not exceed 20% of the
common stock of the corporation outstanding immediately before the merger.

CANADA. Approvals of amalgamations (except amalgamations between a corporation
and wholly owned subsidiaries), consolidations, and sales, leases or exchanges
of substantially all the property of a corporation, other than in the ordinary
course of business of the corporation requires approval by the stockholders by a
two-thirds majority vote at a duly called meeting.

STOCKHOLDERS' CONSENT WITHOUT A MEETING

NEVADA. Unless otherwise provided in the articles of incorporation or the
bylaws, any actions required or permitted to be taken at a meeting of the

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stockholders may be taken without a meeting if, before or after taking the
actions, a written consent is signed by the stockholders holding at least a
majority of the voting power, except that if a different proportion of voting
power is required for such an actions at a meeting, then that proportion of
written consent is required. In no instance where actions is authorized by
written consent need a meeting of the stockholders be called or notice given.

CANADA. Any action required or permitted to be taken at a meeting of the
stockholders may be taken by a written resolution signed by all the stockholders
entitled to vote on such resolution.

STOCKHOLDER VOTING REQUIREMENTS

NEVADA. Unless the articles of incorporation or bylaws provide for different
proportions, a majority of the voting power, which includes the voting power
that is present in person or by proxy, regardless of whether the proxy has
authority to vote on all matters, constitutes a quorum for the transactions of
business. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders. Directors must be elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a class or series or
classes or series is required, a majority of the voting power of the class or
series that is present or by proxy, regardless of whether the proxy has
authority to vote on all matters, constitutes a quorum for the transaction of
business. An act by the stockholders of each class or series is approved if a
majority of the voting power of a quorum of the class or series votes for the
actions.

CANADA. Unless the by-laws otherwise provide, a quorum of stockholders is
present for a meeting if the holders of a majority of the shares entitled to
vote at the meeting are present in person or represented by proxy. It is common
practice for companies to provide for a quorum of stockholders to be present
when only 5% of the issued and outstanding share capital is present. Our
proposed bylaws contain such a provision. Except where the Canada Business
Corporations Act requires approval by a special resolution, being approval by a
two-thirds majority of the shares present in person or represented by proxy and
entitled to vote on the resolution, a simple majority or the shares present in
person or represented by proxy and entitled to vote on a resolution is require
to approve any resolution properly brought before the stockholders. Where the
articles of a corporation provide for cumulative voting, stockholders voting at
an election of directors have the right to a number of votes equal to the votes
attached to the shares held by such stockholder multiplied by the number of
directors to be elected and stockholders may cast all such votes in favour of
one candidate for director or may distribute the votes among the candidates in
any manner. The holders of a class or series of shares are entitled to vote
separately on proposals to amend the articles of a corporation where such
amendment affects the rights of such class or series in a manner different than
other shares of the corporation. A vote to approve any such amendment is passed
if approved by a two-thirds majority of the voting power of the class or series
represented in person or by proxy at a meeting called to approve such amendment.

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DIVIDENDS

NEVADA. A corporation is prohibited from making a distribution to its
stockholders if, after giving effect to the distribution, the corporation would
not be able to pay its debts as they become due in the usual course of business
or the corporation's total assets would be less than its total liabilities (plus
any amounts necessary to satisfy any preferential rights).

CANADA. A corporation is prohibited from declaring or paying a dividend if there
are reasonable grounds for believing that the corporation, is or would after the
payment be, unable to pay its liabilities as they become due or the realizable
value of the corporation's assets would be less than the total of its
liabilities and stated capital of all classes.

ANTI-TAKEOVER PROVISIONS

NEVADA. Nevada's "Acquisition of Controlling Interest Statute" applies to Nevada
corporations that have at least 200 shareholders, with at least 100 shareholders
of record being Nevada residents, and that do business directly or indirectly in
Nevada. Where applicable, the statute prohibits an acquiror from voting shares
of a target company's stock after exceeding certain threshold ownership
percentages, until the acquiror provides certain information to the company and
a majority of the disinterested shareholders vote to restore the voting rights
of the acquiror's shares at a meeting called at the request and expense of the
acquiror. If the voting rights of such shares are restored, shareholders voting
against such restoration may demand payment for the "fair value" of their shares
(which is generally equal to the highest price paid in the transaction
subjecting the stockholder to the statute). The Nevada statute also restricts a
"business combination" with "interested shareholders", unless certain conditions
are met, with respect to corporations which have at least 200 shareholders of
record. A "combination" includes (a) any merger with an "interested
stockholder," or any other corporation which is or after the merger would be, an
affiliate or associate of the interested stockholder, (b) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of assets, to an
"interested stockholder," having (i) an aggregate market value equal to 5% or
more of the aggregate market value of the corporation's assets; (ii) an
aggregate market value equal to 5% or more of the aggregate market value of all
outstanding shares of the corporation; or (iii) representing 10% or more of the
earning power or net income of the corporation, (c) any issuance or transfer of
shares of the corporation or its subsidiaries, to the "interested stockholder,"
having an aggregate market value equal to 5% or more of the aggregate market
value of all the outstanding shares of the corporation, (d) the adoption of any
plan or proposal for the liquidation or dissolution of the corporation proposed
by the "interested stockholder," (e) certain transactions which would result in
increasing the proportionate percentage of shares of the corporation owned by
the "interested stockholder," or (f) the receipt of benefits, except
proportionately as a stockholder, of any loans, advances or other financial
benefits by an "interested stockholder." An "interested stockholder" is a person
who, together with affiliates and associates, beneficially owns (or within the
prior three years, did beneficially own) 10% or more of the corporation's voting
stock. A corporation to which this statute applies may not engage in a
"combination" within three years after the interested stockholder acquired its
shares, unless the combination or the interested stockholder's acquisition of
shares was approved by the board of directors before the interested stockholder
acquired the shares. If this approval was not obtained, then after the three
year period expires, the combination may be consummated if all applicable
statutory requirements are met and either (a) (i) the board of directors of the
corporation approves, prior to such person becoming an "interested stockholder",

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the combination or the purchase of shares by the "interested stockholder" or
(ii) the combination is approved by the affirmative vote of holders of a
majority of voting power not beneficially owned by the "interested stockholder"
at a meeting called no earlier than three years after the date the "interested
stockholder" became such or (b) (i) the aggregate amount of cash and the market
value of consideration other than cash to be received by holders of common
shares and holders of any other class or series of shares meets certain minimum
requirements set forth in the statutes and (ii) prior to the consummation of the
"combination", except in limited circumstances, the "interested stockholder"
will not have become the beneficial owner of additional voting shares of the
corporation.

CANADA. There is no provision under Canadian law similar to the Nevada
Acquisition of Controlling Interest Statute.

APPRAISAL RIGHTS; DISSENTERS' RIGHTS

NEVADA. Nevada law limits dissenters rights in a merger, when the shares of the
corporation are listed on a national securities exchange included in the
National Market System established by the National Association of Securities
Dealers, Inc. or are held by at least 2,000 shareholders of record, unless the
shareholders are required to accept in exchange for their shares anything other
than cash or (i) shares in the surviving corporation, (ii) shares in another
entity that is publicly listed or held by more than 2,000 shareholders, or (iii)
any combination of cash or shares in an entity described in (i) or (ii). Also,
the Nevada law does not provide for dissenters' rights in the case of a sale of
assets.

CANADA. Under the Canada Business Corporations Act, the holders of shares of any
class of a corporation have the right to dissent when a company amends its
articles to change any provisions restricting or constraining the issue,
transfer or ownership of shares of that class. Stockholders also have
dissenters' rights when a company proposes to amend its articles to add, change
or remove any restrictions on the business or businesses that the corporation
may carry on, amalgamate (other than a vertical short-form amalgamation with a
wholly-owned subsidiary), continue to another jurisdiction, sell, lease or
exchange all or substantially all of its property, or carry out a going private
or squeeze-out transaction. A shareholder who properly exercises his or her
rights of dissent is entitled to be paid the fair market value of his or her
shares in respect of which he or she dissents.

ACCOUNTING TREATMENT

The continuance of our company from Nevada to Canadian represents, for U.S.
accounting purposes, a transaction between entities under common control. Assets
and liabilities transferred between entities under common control are accounted
for at historical cost, in accordance with the guidance for transactions between
entities under common control in Statement of Financial Accounting Standards No.
141, Business Combinations. The historical comparative figures of Stratabase
will be those of Stratabase as a Nevada company.

Upon the effective date of the conversion, we will continue to be subject to the
securities laws of the provinces of Canada as those laws apply to Canadian
domestic issuers. We will qualify as a foreign private issuer in the United
States. Before our continuance in Canada, we prepared our consolidated financial
statements in accordance with generally accepted accounting principles ("GAAP")
in the United States. As a Canadian domestic issuer, we will be required to
prepare our annual and interim consolidated financial statements in accordance

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with Canadian generally accepted accounting principles. For purpose of our
annual disclosure obligations in the United States, we will annually file in the
United States consolidated financial statements prepared in accordance with
Canadian GAAP together with a reconciliation to US GAAP. In addition, as a
foreign private issuer Stratabase will not have to file quarterly reports with
the SEC nor will its directors, officers and 10% stockholders be further subject
to Section 16(b) of the Exchange Act.

BUSINESS OF STRATABASE

OVERVIEW OF OUR COMPANY

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alter Stratabase's business model to focus on proprietary software. We are
therefore no longer supporting open source code software. We have not yet begun
selling our proprietary software. However we did release the first phase of our
proprietary software (the software is called "Resync") in the last quarter of
2002, but we are offering it as a free trial version for now in order to judge
consumer interest. We do not know whether we will be able to generate any
revenue from Resync. Currently, we are beta-testing the second phase of our
proprietary software (the software is called "Relata"). Approximately 200 users
have already signed up for a free trial use of Relata. . We have not derived any
revenue to date from our proprietary products. Although we intend to generate
sales of Relata by using direct mail advertising and the Internet, there is no
assurance that we will be successful. With the closing of our second office we
lost the services of two of our salespeople, and therefore have not had an
active sales staff to sell our database services. Although we expect to rebuild
our sales staff in this area, we have not yet found suitable personnel for these
positions.

Stratabase was incorporated under the laws of the State of Nevada on November
18, 1998 and commenced operations in January 1999. For the period from inception
to December 31, 1999, we operated in the development stage. Substantially all
activity during this period through 1999 was devoted to the raising of equity
capital and development of our long-term business model, up until the completion
of our initial public offering in February 2000. Our office is located at 34595
3rd Avenue, Suite 101, Abbotsford, BC, V2S.8B7, Canada. The telephone number is
(604) 504-5811.

OUR FOCUS

We engineer Knowledge Worker Automation (KWA) software, of which Enterprise and
CRM software are components. The KWA software we have produced consists of
web-based software tools. These tools allow enterprises to manage relationships
and contacts, administer and organize time allocations, collaborate with others,
manage data, automate communications and productivity reporting, and conduct
data synchronization.

The software we have developed is:

- - mostly web-based, meaning that it can be accessed through a standard
web browser;
- - designed to appeal to the needs of enterprises with hundreds of
potential users:
- - adaptable, meaning that users can modify the functionality by
establishing preferences;
- - functionally reliable, as bug reports and performance statistics are
regularly monitored by our programming staff.

In addition to developing this KWA software, we have developed extensive written
documentation and user support materials. Our programming staff has prepared a
manual and other documentation that describes the features of our software and
advises the user on how best to utilize these features. Our staff monitors on a
daily basis the technical support inquiries and bug reports, and to a lesser
extent the software performance statistics, in order to ensure the software is
functionally reliable.

-33-

Core Products and Services

We have not yet begun selling our proprietary software. However we did release
the first phase of our proprietary software (the software is called "Resync") in
Q4 2002, but we are offering it as a free trial version for now in order to
judge consumer interest. We do not know whether we will be able to generate any
revenue from Resync. We are currently beta-testing the second phase of our
proprietary software (the software is called "Relata"). Although we plan to
offer it as a hosted solution, and charge users on a monthly basis for access to
it, we do not know whether we will be able to generate any revenue from this
product. We also do not know if our direct mail and Internet advertising of
Relata will successfully generate any sales. We have not derived any revenue to
date from our proprietary products.

In the past we have utilized a business model built around the open source
software we have developed. Historically we have generated revenues by selling
databases of sales leads and mailing lists, and providing technical services
aimed to customize and improve the quality of the databases we sold; our open
source software was designed to allow users to interface with and manage these
databases, and customer relationships. The model hypothesized that by giving the
software away for free and making it open source, demand would be created for
our database and technical services. Customers who purchase databases from us
are not required to use our open source software, however it is easier to manage
and interface with these databases by using our open source software,
particularly when the databases are very large. Although we are no longer
supporting our open source software, we plan to continue offering database and
technical services. However, with the closing of our second office we lost the
services of two of our salespeople, and therefore have not had an active sales
staff to sell our database and technical services. Although we expect to rebuild
our sales staff in this area, we have not yet found suitable personnel for these
positions.

Competition

In the broader market for Knowledge Worker Automation software, which includes
Enterprise and CRM software, there are a large number of well-established
companies that have significantly greater financial resources, larger
development staffs and more extensive marketing and distribution capabilities
than we do. These competitors include thousands of established software vendors,
some of them very large, including the likes of Microsoft and Siebel Systems,
and some of them much smaller, such as Pivotol, Hummingbird and Documentum. The
market for this software is broad and covers many aspects of enterprise
computing. Many of these competitors are well positioned vendors who have
established and stable customer bases and continue to attract new customers.
Most of these companies are larger and more experienced organizations than we
are. In addition, we face potential competition from many companies with larger
customer bases, greater financial resources and stronger name recognition than
we have.

Software markets are seldom characterized by traditional barriers to entry that
are found in many traditional markets. Accordingly, new competitors or alliances
among competitors can emerge and rapidly acquire significant market share.

We believe that the major factors affecting the competitive landscape for our
software and related services include:

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- name and reputation of software and service provider;
- product performance and functionality;
- strength of relationships in the software community;
- availability of user applications; - ease of use;
- networking capability; - breadth of hardware compatibility;
- quality of related services;
- distribution strength; and
- alliances with industry partners.

Although we believe that we will compete favorably with many of our competitors
in a number of respects, including product performance and functionality and the
fact that our product will be offered as a hosted and web-based service, we
believe that many of our competitors enjoy greater name recognition, have
software which has more features than our software does, have superior
distribution capabilities and offer more extensive support services than we
currently do. In addition, there are significantly more applications available
for competing software solutions, than there are for ours. An integral part of
our strategy in the future, however, is to address these shortcomings by, among
other things, offering our software as a hosted and entirely web-based solution;
providing more services to our clients that have high associated margins; and,
enhancing the software's functionality.

Intellectual Property

The software we have developed falls into two categories: proprietary and open
source.

The proprietary software we have developed is the exclusive property of
Stratabase, and we retain all copyright and ownership of this intellectual
property.

The open source software we have developed has been made available for licensing
under the GNU General Public License (GPL), pursuant to which anyone, generally,
may copy, modify and distribute the software, subject only to the restriction
that any resulting or derivative work is made available to the public under the
same terms. Therefore, although we retain the copyrights to the code, due to the
GPL and the open source nature of our software, the intellectual property
contained within the software does not belong to us, nor to anyone else. That is
the nature of open source software. However, we do enter into confidentiality
and nondisclosure agreements with our employees and consultants.

We are pursuing registration of the Stratabase and Relata trademarks in the U.S.
However we may be unable to detect the unauthorized use of, or take appropriate
steps to enforce, our trademark rights. Although we have begun the registration
process of our trademarks in the U.S., it is not yet complete. Additionally, we
do not have any assurances that the trademark applications will be successful.
Failure to adequately protect our trademark rights could harm or even destroy
the Stratabase brand and impair our ability to compete effectively. The value to
creating market awareness of the Stratabase and Relata marks will be diminished
if we cannot protect the name. Furthermore, defending or enforcing our trademark
rights could result in the expenditure of significant financial and managerial
resources.

-35-

Although we do not believe that our business infringes on the rights of third
parties, there can be no assurance that third parties will not assert
infringement claims against us in the future or that any such assertion will not
result in costly litigation or require us to obtain a license to third party
intellectual rights. In addition, there can be no assurance that such licenses
will be available on reasonable terms or at all.

Employees

As of July 1, 2003, we had 4 employees, including our two officers, Mr. Trevor
Newton, Chairman of the Board, President, Secretary, Treasurer and CEO, and Mr.
Fred Coombes, Vice President of Corporate Development and a Director. Mr. Newton
supervises the company's operations. It is anticipated that we will need to add
additional managerial, technical and administrative staff in the future in order
to realize our business objectives. We currently utilize 2 software programmers
and outsource to outside software contractors on an as-needed basis.

Our equipment and primary agreements

We lease a Bandwidth/Connectivity (fiber optic line) from BCTel/Telus. It is the
subject of a three-year agreement which commenced on February 1, 2001, and calls
for a monthly fee of $1,000.

Additionally, we pay an annual premium of approximately $1,500 for a one year
term comprehensive general liability insurance policy with the following
coverages: (i) general liability - $1,400,000; (ii) database - $150,000; (iii)
hardware - $125,000; and (iv) Flood/Earthquake - $185,000. (Figures are
converted from Canadian dollars).

Description of Property.

We do not own any real property. Our offices are approximately 2,000 square feet
located at 34595 3rd Avenue, #101, Abbotsford, B.C., V2S.8B7, Canada. The office
is leased for a two-year lease that commenced on February 1, 2001. The lease is
being renewed for an additional twelve month period. The monthly rent is
approximately $1,500. We believe that the facilities will be adequate for the
foreseeable future. All costs described in this section are stated in U.S.
dollars as converted from Canadian dollars. Accordingly, the costs may vary to
some degree with the currency exchange rate.

Legal Proceedings.

We are not involved in any material pending litigation, nor are we aware of any
material pending or contemplated proceedings against us. We know of no material
legal proceedings pending or threatened, or judgments entered against any of our
directors or officers in their capacity as such.

-36-

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Certain statements contained in this proxy statement/prospectus, including
statements regarding the anticipated development and expansion of our business,
our intent, belief or current expectations, our directors or officers, primarily
with respect to the future operating performance of Stratabase and the products
we expect to offer and other statements contained herein regarding matters that
are not historical facts, are "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act. Future filings with the Securities
and Exchange Commission, future press releases and future oral or written
statements made by us or with our approval, which are not statements of
historical fact, may contain forward-looking statements, as defined under the
Reform Act because such statements include risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements.

All forward-looking statements speak only as of the date on which they are made.
We undertake no obligation to update such statements to reflect events that
occur or circumstances that exist after the date on which they are made.

OVERVIEW

We are a provider of Knowledge Worker Automation software. Knowledge Worker
Automation (KWA) software, of which Enterprise and CRM software are components,
is designed to allow enterprises to improve the efficiency of knowledge workers.
The KWA software we have produced consists of web-based software tools. These
tools allow enterprises to manage relationships and contacts, administer and
organize time allocations, collaborate with others, manage data, automate
communications and productivity reporting, and conduct data synchronization.

-37-

customer relationships. It was the expectation of management that by giving the
software away for free and making it open source, we would create demand for our
database and technical services.

Specifically, in 2001 and 2002, when we employed this open source business
model, 89% and 91%, respectively, of our revenues related to the provision of
databases to our customers and 11% and 9%, respectively, related to the
provision of technical and hardware services. However, the magnitude of these
revenues was not sufficient to generate the level of shareholder value that
management feels is expected by its stakeholders. Therefore the decision was
made by management to alter Stratabase's business model to focus on proprietary
software. We are therefore no longer supporting open source code software. We
have not yet begun selling our proprietary software. However we did release the
first phase of our proprietary software (the software is called "Resync") in the
last quarter of 2002, but we are offering it as a free trial version for now in
order to judge consumer interest. We do not know whether we will be able to
generate any revenue from Resync. Currently we are beta-testing the second phase
of our proprietary software (the software is called "Relata"). Approximately 200
users have already signed up for a free trial use of Relata. Currently we are
beta- We have not derived any revenue to date from our proprietary products.
With the closing of our second office we lost the services of two of our
salespeople, and therefore have not had an active sales staff to sell our
database services. Although we expect to rebuild our sales staff in this area,
we have not yet found suitable personnel for these positions.

We were incorporated under the laws of the State of Nevada on November 18, 1998,
and commenced operations in January 1999. Our offices are located at 34595 3rd
Avenue, Suite 101, Abbotsford, BC, V2S.8B7, Canada. The telephone number is
(604) 504-5811.

CRITICAL ACCOUNTING POLICIES

In the ordinary course of business, Stratabase has made a number of estimates
and assumptions relating to the reporting of results of operations and financial
condition in the preparation of its financial statements in conformity with
accounting principles generally accepted in the United States. Actual results
could differ significantly from those estimates under different assumptions and
conditions. We believe that the following discussion addresses our most critical
accounting policies, which are those that are most important to the portrayal of
our financial condition and results. We are constantly re-evaluating those
significant factors and makes adjustments where facts and circumstances dictate.
Historically, actual results have not significantly deviated from those
determined using the necessary estimates inherent in the preparation of
financial statements. Estimates and assumptions include, but are not limited to,
customer receivables, inventories, office equipment, databases and domain name
lives, deferred income tax benefits, contingencies and litigation. We have also
chosen certain accounting policies when options were available. Significant
accounting policies include:

* The first-in, first-out (FIFO) method to value our inventories; and

* The intrinsic value method, or APB Opinion No. 25, to account for our common
stock incentive awards; and

* We record an allowance for credit losses based on estimates of customers'

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ability to pay. If the financial condition of our customers were to deteriorate,
additional allowances may be required.

*We have not recorded an allowance for credit losses related to our note
receivable. Should the financial condition of the note issuer deteriorate,
additional allowances may be required.

*We are amortizing our databases and domain names over three years and two
years, respectively, their estimated remaining useful lives.

Software development costs associated with new products and enhancements to
existing software products are expensed as incurred until technological
feasibility in the form of a working model has been established. To date, in
development of open source software, the time period between the establishment
of technological feasibility and completion of software development has been
short, and no significant development costs have been incurred during that
period. Additionally, we only recently began developing proprietary software and
no significant development costs meeting the criteria for capitalization have
been incurred during that period. Accordingly, Stratabase has not capitalized
any software development costs to date.

These accounting policies are applied consistently for all years presented. Our
operating results would be affected if other alternatives were used. Information
about the impact on our operating results is included in the notes to our
financial statements.

RESULTS OF OPERATIONS

REVENUES

Revenues for the quarter ended March 31, 2003 were $5,000, compared to revenues
of $280,061 for the quarter ended March 31, 2002. Revenues for the year ended
December 31, 2002, were $430,240, compared to revenues of $2,360,452 for the
year ended December 31, 2001. Revenues for the three months ended December 31,
2002, were $10,705, compared to revenues of $1,456,067 for the three months
ended for the same period in 2001. Revenues have remained down primarily because
of our focus on developing our new proprietary software products, which has
taken longer than expected; also, with the closing of our second office we lost
the services of two of our salespeople, and therefore have not had an active
sales staff to sell our database services. Although we expect to rebuild our
sales staff in this area, we have not yet found suitable personnel for these
positions. We have not derived any revenue to date from our proprietary
products. As of December 2002, we released to the public a new software product
called Resync. This is a proprietary software product and is available on a
trial basis to interested users. However, our main proprietary software product,
called Relata, has been beta-released for a 30-day free trial period. Although
approximately 200 users have already signed up for a free trial use of Relata,
which is available to users on a monthly subscription basis, we have not yet
generated any revenues from such usage.

OPERATING EXPENSES

During the three months ended March 31, 2003, we incurred a net loss of $243,655
compared to net income of $56,558 (net of an income tax accrual of $30,000) for

-39-

the comparative period in 2002. Largely this is due to the change in our
business focus, which resulted in increased development costs in 2003, and a
substantial reduction in revenue over 2002. Operating expenses for the years
ended December 31, 2002 and 2001, were $579,762 and $1,607,102, respectively.
The 2002 operating expenses consisted of $255,750 stock compensation expense
recognized as a result of options being granted at less than fair market value
to a key sales person in May 2002; $111,641 of sales commissions; $94,345 of
wages and subcontracting costs; $79,238 of marketing expenses; $26,235 was for
hardware costs incurred on sales for our systems integration solutions; and
$12,553 of such expenses consisted of Internet connectivity costs. Hardware
costs decreased significantly as a result of the previously mentioned
discontinuance in this product line.

GENERAL AND ADMINISTRATIVE EXPENSES

General and Administrative (G&A) expenses for the quarters ended March 31, 2003
and 2002, were $229,044 and $108,715, respectively. The increase in general and
administrative expenses of $120,329 is due largely to (a) a $58,649 increase in
amortization expense pertaining to our databases and domain names resulting from
purchases in 2002 and (b) increased professional fees associated with the
year-end 10-KSB preparation, compliance with Sarbanes-Oxley Act rules and the
preparation of our S-4 Registration Statement regarding our company's
continuation into Canada.

General and Administrative (G&A) expenses for the years ended December 31, 2002
and 2001, were $710,689 and $441,571, respectively. For the year ended 2002,
$281,326 consisted of depreciation and amortization; $181,514 consisted of
legal, accounting, and consulting fees, of which, a substantial portion of these
fees are incurred because we are a public company; and $122,710 of management
fees for the services of our executive management. A significant portion of the
databases acquired at the end of 2001 were placed into service and led to the
increase in depreciation and amortization from $91,459 of such expense for the
year ended 2001.

RESEARCH AND DEVELOPMENT EXPENSES

During the quarter ended March 31, 2003, we incurred $25,643 in research and
development costs pertaining to the development of our new proprietary software.
Such costs primarily consist of salaries and benefits. During the quarter ended
March 31, 2002, we had no research and development costs.

INTEREST AND OTHER INCOME

Interest and other income increased from $4,022 in 2002 to $7,018 in 2003. The
increase is due to a greater interest rate being earned on interest-bearing
investments in 2003 consisting of the 20% annual interest rate attached to our
$150,000 loan to Advanced Cell Technology ("ACT"). As explained below, our loan
to ACT came due on April 30, 2003 without payment or settlement. Interest
continues to accrue on the loan at 20% per annum.

INCOME TAXES

Income taxes of $30,000 were accrued in 2002 on the net income before taxes for
the 2002 quarter of $86,558. By December 31, 2002, additional losses had been

-40-

incurred to eliminate this estimated liability as at March 31, 2002. No tax
provision is recorded in 2003 due to our assessment of the potential
recoverability of deferred tax assets, primarily non operating loss
carryforwards.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2003, we had $12,674 in cash and cash equivalents, a decrease of
$121,419 since December 31, 2002, and $1,252,783 since December 31, 2001. The
significant decrease in cash as compared to the prior year end is primarily
attributable to two factors: losses from operations in 2002 and a delay in cash
disbursements for three significant operational expenses at the end of 2001.
Losses from operations may continue in the future as we shift our revenue model
from our former business model to a new model focused on the provision of
proprietary software. If revenues and spending levels are not adjusted
accordingly, we may not generate sufficient revenues to achieve sustained
profitability. Even if sustained profitability is achieved, we may not sustain
or increase such profitability on a quarterly or annual basis in the future. Our
policy is to pay all operational expenses when due, provided the vendor, in the
normal course of business, has satisfied all necessary conditions for payment.
As a result, we had outstanding payable balances totaling approximately $60,000
with 26 vendors at the end of 2002 that remained unpaid by us. As of December
31, 2002, our accounts payable aging was as follows:

Current $ 22,112
31-60 days 25,240
61-90 days 8,541
91+ days 3,628
---------
Total $ 59,521
=========

Our current expenditures average between thirty and fifty thousand dollars per
month. We expect our monthly expenditures to remain within this range over the
next twelve months. As a result of the $350,000 private placement concluded in
April 2003, we believe that our available cash, together with operating revenues
expected to commence by the third quarter of 2003, should be sufficient to fund
our working capital requirements for at least the next six months of operations.
However, we will need to raise additional funds to finance our operations
subsequent to December 31, 2003. We expect to raise funds by selling equity in
the company, however no specific plans for doingso have been established nor
have potential investors been approached, and there can be no assurances as to
whether any equity financing will be available.

We have no long-term debt. We have reduced our expenses by downsizing staff and
closing one of our offices. We believe that our available cash, together with
operating revenues, will be sufficient to fund our immediate working capital
requirements. We further believe that we can generate sufficient liquidity to
carry out our operational activities. We have no long-term employment contracts
and can reduce our work-force, as necessary, if revenues are not sufficient to
support our existing operations or until additional funding can be obtained.
Since we currently only have 5 people employed, any significant further

-41-

reductions in our work-force may directly negatively affect our operations. For
example, if we dismiss an engineer, new product development may be delayed.

We will require additional capital to fund operations, take advantage of
acquisition opportunities, develop or enhance services, or respond to
competitive pressures. Although as a result of the private issuance in April
2003 of 200,000 shares and 200,000 warrants exercisable until April 2005 at an
exercise price of $2.50 we raised $350,000, we cannot be certain that any
required additional financing will be available on terms favorable to us. If
additional funds are raised by the issuance of our equity securities, such as
through the issuance and exercise of warrants, then existing stockholders will
experience dilution of their ownership interest. If additional funds are raised
by the issuance of debt or other equity instruments, we may be subject to
certain limitations in our operations, and issuance of such securities may have
rights senior to those of the then existing holders of common stock. If adequate
funds are not available or not available on acceptable terms, we may be unable
to fund expansion, develop or enhance services or respond to competitive
pressures.

Going Concern Consideration

Our activities have been supported by available cash on hand and revenues
generated from the sales of our products and services. As indicated in the
accompanying balance sheet, at December 31, 2002 we had approximately $134,093
in cash and after approximately $66,455 of liabilities had only approximately
$67,638 in working capital. For the year ended, we have had a loss from
operations of approximately $914,645. Further, losses are continuing subsequent
to December 31, 2002. We are in need of additional financing or a strategic
arrangement in order to continue our planned activities for the remainder of the
current fiscal year. These factors, among others, indicate that Stratabase may
be unable to continue operations in the future as a going concern. Our plans to
deal with this uncertainty include further reducing expenditures and raising
additional capital or entering into a strategic arrangement with a third party.
There can be no assurance that management's plans to reduce expenditures, raise
capital or enter into a strategic arrangement can be realized. No adjustment has
been made in the accompanying financial statements to the amounts and
classification of assets and liabilities which could result should Stratabase be
unable to continue as a going concern.

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SELECTED FINANCIAL DATA

STRATABASE
SUPPLEMENTARY FINANCIAL INFORMATION
2002 QUARTER ENDED
-----------------------------------------
DECEMBER 31 SEPTEMBER 30 JUNE 30
------------ ----------- ------------
(Unaudited) (Unaudited) (Unaudited)

STATEMENT OF OPERATIONS DATA
Revenues $ 10,705 $ 70,503 $ 68,971
Net revenues (operating
expenses) (90,045) (154,805) (95,923)
General and administrative
expenses 196,372 182,826 222,776
Net income (loss) (365,861) (321,428) (285,914)
Dividends declared -- --
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK
Basic $ (0.05) $ (0.04) $ (0.04)
Diluted (0.05) (0.04) (0.04)
Dividends per share -- -- --
BALANCE SHEET DATA
Total assets $ 983,038 $ 1,183,539 $ 1,775,317
Long-term obligations $ -- $ -- $ --
Average shares outstanding -
diluted 8,033,372 8,033,372 7,928,372

2001 QUARTER ENDED
--------------------------------------------------------
DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
------------ ----------- ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

STATEMENT OF OPERATIONS DATA

Revenues $ 1,458,768 $ 514,292 $ 93,435 $ 293,957
Net revenues (operating
expenses) 626,961 93,444 (66,723) 99,668
General and administrative
expenses 128,903 78,793 136,117 97,758
Net income (loss) 600,632 15,338 (198,986) 4,262
Dividends declared -- -- -- --
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK
Basic $ 0.09 $ -- $ (0.03) $ --
Diluted 0.08 -- (0.03) --
Dividends per share -- -- -- --
BALANCE SHEET DATA
Total assets $ 2,040,229 $ 751,288 $ 371,382 $ 522,564
Long-term obligations $ -- $ -- $ -- $ --
Average shares outstanding -
diluted 8,255,454 7,718,372 7,368,372 6,675,279

The accompanying unaudited financial information includes all adjustments
considered necessary (consisting only of normal recurring adjustments) for a
fair presentation. Results for the three-month periods ended March 31, 2003 and
2002 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2003, or any future period.

-43-

STRATABASE
SELECTED INTERIM FINANCIAL DATA - CONTINUED

March 31
----------------------------
2003 2002
------------ -------------
(Unaudited) (Unaudited)

STATEMENT OF OPERATIONS DATA
Revenues $ 5,000 $ 280,061

Gross
Profit 4,014 191,251
General and administrative
expenses 229,044 108,715
Net income (loss) (243,655) 56,558
Dividends declared -- --
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK
Basic $ (0.03) $ 0.01
Diluted (0.03) 0.01
Dividends per share -- --
BALANCE SHEET DATA
Total assets $ 769,362 $ 983,038
Long-term obligations $ -- $ --
Average shares outstanding -
diluted 7,283,372 7,394,486

MARKET PRICES, DIVIDENDS AND TRADING INFORMATION

Stratabase Common Stock

In July 2000 our common stock began trading on the Nasdaq Stock Market, Inc.
Over the Counter Bulletin Board under the symbol "SBSF.OB". The Bulletin Market
is maintained by the Nasdaq Stock Market. The following table sets forth the
range of high and low bid prices of our common stock for the quarters indicated
through the fourth quarter of 2002:

Calendar Year High Bid Low Bid

2002:

First quarter $1.59 $1.11
Second quarter $3.37 $1.31
Third quarter $2.88 $1.25
Fourth quarter $2.37 $1.10

2001:

First quarter $1.84 $0.75
Second quarter $2.50 $0.63
Third quarter $2.50 $1.01
Fourth quarter $2.00 $1.20

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The quotations reflect inter-dealer prices, without retail markups, markdowns,
or commissions and do not necessarily represent actual transactions. The
quotations were derived from the National Quotation Bureau OTC Market Report. We
estimate that as of March 2003 there were approximately 100 holders of record of
the Common Stock.

Our Transfer Agent

We have appointed Securities Transfer Corp., with offices at 2591 Dallas
Parkway, Suite 102, Frisco, TX 75034, (469) 633-0101, as transfer agent for our
shares. The transfer agent is responsible for all record-keeping and
administrative functions in connection with the common shares of stock.

Dividend Policy

We have never declared or paid any cash dividends on our common stock nor do we
anticipate paying any in the foreseeable future. Furthermore, we expect to
retain any future earnings to finance our operations and expansion. The payment
of cash dividends in the future will be at the discretion of our Board of
Directors and will depend upon our earnings levels, capital requirements, any
restrictive loan covenants and other factors the Board considers relevant.

MANAGEMENT

Our present officers and directors are as follows:

Name Age Position

Trevor Newton 33 President, Secretary, Treasurer, Chief Executive Officer

Fred Coombes 49 Vice President of Corporate Development and Director

Scott Praill 34 Director

TREVOR NEWTON, since our incorporation to the present, has been our President,
Secretary, Treasurer and Chief Executive Officer. Mr. Newton oversees all
aspects of operations and business development for Stratabase. Mr. Newton
graduated from Simon Fraser University in 1993 with a Masters Degree in
Economics, and from the University of Victoria in 1991 with a Bachelor of
Science degree in Economics. From 1994 to 1995 Mr. Newton taught Economics and
Statistics at the University College of Fraser Valley, and from February 1996
until October 1996, Mr. Newton was a registered representative with a
broker-dealer. From October 1996 until 1999, Mr. Newton was employed at a
company which ran a financial website published financial information, such as
stock quotes and news, to its users 24 hours a day. His responsibilities
included the overseeing of all aspects of operations such as programming,
technical infrastructure and marketing.

-45-

FRED COOMBES, since our inception to the present, has been one of our Directors
and since January 20, 1999, to the present our Vice-President of Corporate
Development. Since 1987 to the present, Mr. Coombes has also acted as the
President of Co-ab Marketing, Ltd., an investor and corporate relations firm.
Presently, he devotes himself fulltime to our affairs.

SCOTT PRAILL has served on our Board of Directors of Stratabase since October
2002. Mr. Praill is a financial professional who has been employed by leading
companies such as Placer Dome and Westcoast Energy, and was a Senior Accountant
for Price Waterhouse, where his responsibilities included the planning of
financial statement audits and ensuring Canadian and U.S. GAAP compliance. His
duties have also included assessment of adequate financial statement disclosure;
preparing and reviewing financial information including pro-forma financial
statements for prospectuses, information circulars and other offering documents
related to acquisitions, mergers and the issuance of debt and equity securities;
evaluating public company operating results through financial statement and
financial ratio analysis; and reviewing financial internal control systems and
preparing reports for presentation to Audit Committees and Boards of Directors.
Mr. Praill has extensive experience in public company financial reporting
including compliance with Canadian and U.S. securities exchange requirements and
the preparation and review of financial statements. Mr. Praill currently is the
director of finance for Inflazyme Pharmaceuticals. Mr. Praill has earned the
following designations: Chartered Accountant (BC, 1996), Certified Public
Accountant (Illinois, 2001), and a Bachelor of Science Degree (Simon Fraser
University, 1989).

Our directors have been elected to serve until the next annual meeting of
stockholders and until their successor(s) have been elected and qualified, or
until death, resignation or removal.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's executive officers,
directors and persons who beneficially own more than 10% of a registered class
of the Company's equity securities to file with the Commission initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Such persons are required by Commission
regulations to furnish the Company with copies of all Section 16(a) forms they
filed.

We are not aware of any instances in fiscal year 2002 when an executive officer,
director or owners of more than 10% of the outstanding shares of our common
stock failed to comply with the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, other than the Form 3 which should have been
filed by our director Scott Praill.

EXECUTIVE COMPENSATION

The following table sets forth information with respect to compensation we paid
for the years ended December 31, 2002, 2001 and 2000, for services of Trevor
Newton, our Chairman, President, Chief Executive Officer, Chief Operating
Officer, Secretary and Treasurer. We have not paid any executive officer in
excess of $100,000 (including salaries and benefits) during the years ended
December 31, 2002, 2001 or 2000.

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Summary of Annual Compensation

Name and Year ended Year ended Period ended
Principal Position December 31, 2002 December 31, 2001 December 31, 2000
- ------------------ ----------------- ----------------- -----------------

Trevor Newton, Chairman of
the Board, President, Secretary,
Treasurer and Chief Operating and

Executive Officer $75,000 $60,000 $60,000

OPTION/SAR GRANTS IN LAST FISCAL YEAR

(Individual Grants)

- ----------------------------- -------------------------- -------------------- --------------- ------------------------
Number Of Securities Percent Of Total
Underlying Options/SARs Options/SARs

Granted (#) Granted To Exercise or
(b) Employees In Base Price
Name Fiscal Year ($/Sh) Expiration Date
(a) (c) (d) (e)
- ----------------------------- -------------------------- -------------------- --------------- ------------------------
Trevor Newton, President,
Secretary, Treasurer,
Chairman of the Board of

Directors, Chief Operating None None None None
and Executive Officer
- ----------------------------- -------------------------- -------------------- --------------- ------------------------

AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR

AND FY-END OPTIONS/SAR VALUES

- ------------------------------------ ------------------- -------------------- -------------------- -------------------
Number Of
Unexercised Value Of
Securities Unexercised
Underlying In-The-Money

Options/SARs At Options/SARs At

Shares Acquired FY-End (#) FY-End ($)
On Exercise Value Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
- ------------------------------------ ------------------- -------------------- -------------------- -------------------
Trevor Newton, President,
Secretary, Treasurer, Chairman of

the Board of Directors, Chief None None $225,000/$0 $180,000/$0
Operating and Executive Officer
- ------------------------------------ ------------------- -------------------- -------------------- -------------------

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We have no employment agreements with any of our executive officers or
employees.

During the 2002 fiscal year, we paid fees of $75,000 for the services of Mr.
Trevor Newton, the President, Chief Executive Officer, Secretary and Treasurer,
and $47,710 for the services of Mr. Fred Coombes, the Vice President of
Corporate Development.

RELATED PARTY TRANSACTIONS

During the 2001 fiscal year, we accepted non-interest bearing notes from Messrs.
Newton and Coombes for $200,000 and $175,000, respectively, for the 2001
exercise of stock options which were previously granted. The notes accepted on
exercise came due on April 1, 2003. In May 2003, we reached agreement with
Messrs. Newton and Coombes to settle the indebtedness by accepting 150,000
common shares of Stratabase as payment in full for Mr. Newton's outstanding note
and 130,000 common shares of the Company as payment for Mr. Coombes' outstanding
note, representing a total value of $385,560 as compared to the $375,000 face
value of the notes. The total value was determined based on quoted market prices
of our common stock on the redemption date. The redemption and cancellation of
these shares occurred in the second quarter of 2003.

SECURITY OWNERSHIP

The following table lists, as of May 30, 2003, the number of shares of common
stock beneficially owned by (i) each person or entity known to us to be the
beneficial owner of more than 5% of our outstanding common stock; (ii) each of
our officers and directors; and (iii) all of our officers and directors as a
group. Information relating to beneficial ownership of common stock by our
principal stockholders and management is based upon information furnished by
each person using "beneficial ownership" concepts under the rules of the
Securities and Exchange Commission. Under these rules, a person is deemed to be
a beneficial owner of a security if that person has or shares voting power,
which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not have
any pecuniary beneficial interest.

The percentages below are calculated based on 7,953,372 shares of common stock
issued and outstanding, plus in the case of a person who has the right to
acquire additional shares within 60 days, any new shares which would be issued
to effect such acquisition.

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Officers, Directors,

5% Shareholder No. of Shares Beneficial Ownership %
----------------- ------------- ----------------------

Trevor Newton 2,935,400 (1) 36.91%
c/o Stratabase
34595 3rd Avenue
Abbotsford, B.C.
V2S 8B7 Canada

Mary Martin 1,122,072 (2) 14.11%
248 West Park Avenue
Long Beach, NY 11561

Fred Coombes 1,042,300 (3) 13.11%
c/o Stratabase
34595 3rd Avenue
Abbotsford, B.C.
V2S 8B7 Canada

New Horizons LP 538,925 6.78%
248 West Park Avenue
Long Beach, NY 1151

Scott Praill

c/o Stratabase Less than 1%
34595 3rd Avenue
Abbotsford, B.C. 10,000 (4)
V2S 8B7 Canada
All Directors and executive
officers as a Group (3 persons)*
3,987,700 50.14%

- ----------

(1) Includes 225,000 options to purchase common stock at a purchase price of
$0.60 per share, all of which are vested.

(2) The general partner and a minority limited partner of New Horizons LP is Joe
MacDonald, who is married to Mary Martin. The number indicated above does not
include the shares owned by New Horizons LP, all of which Ms. Martin disclaims
beneficial ownership.

(3) Includes 30,000 shares of common stock owned by Mr. Coombes' daughters,
Candice Coombes, Mackenzie Coombes and Carley Coombes.

(4) Scott Praill was granted 100,000 options pursuant to the 2002 Stock Option
Plan to purchase common stock at a purchase price of $1.30 per share. Of these
options, only 10,000 are currently vested. The balance of his options vest as
follows: 15,000 on June 23, 2003; 15,000 on June 23, 2004; 20,000 on December
31, 2004; 20,000 on June 23, 2005 and 20,000 on December 31, 2002.

* These shares are attributed to Trevor Newton, Fred Coombes and Scott Praill.

The persons or entities named in this table, based upon the information they
have provided to us, have sole voting and investment power with respect to all
shares of common stock beneficially owned by them.

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DESCRIPTION OF CAPITAL STOCK

We are currently authorized to issue 25,000,000 shares of common stock and
1,000,000 shares of preferred stock. As of today, we have issued, 7,953,372
shares of common stock.

Each share of our common stock has equal, noncumulative voting rights and
participates equally in dividends, if any. The common stock has no sinking fund
provisions applicable to it. The shares are fully paid for and nonassessable
when issued. In addition, we have issued an aggregate of 1,750,000 options to
purchase our common stock at a price range of $.50 - $1.45 per share pursuant to
our 2000 Stock Incentive Plan, consisting of a share purchase plan and a share
option plan, of which 1,050,000 had been exercised at December 31, 2001. Shares
fully vested at December 31, 2001, totaled 477,500. We reserved 1,750,000 shares
for grant under the 2002 Stock Incentive Plan and have issued 330,000 of such
shares to date. We have outstanding 200,000 warrants to purchase 200,000 shares
of our common stock, which are exercisable until April 2005 at $2.50 per share.
These warrants were issued in a private placement to a foreign investor in April
2003 in connection with their purchase of 200,000 shares of common stock for an
aggregate purchase price of $350,000.

Except for these warrants and options, there are no outstanding options,
warrants, or rights to purchase any of the securities of Stratabase.

We authorized the issuance of up 1,000,000 shares of preferred stock, with
timing and terms at the discretion of the board of directors. No shares of
preferred stock have been issued as of the date of this prospectus.

STOCKHOLDER PROPOSALS

Stockholders of Stratabase may submit proposals to be considered for stockholder
action at the Special Meeting of Stockholders if they do so in accordance with
applicable regulations of the SEC and the laws of the State of Nevada. In order
to be considered for inclusion in the proxy statement for the meeting, the
Secretary must receive proposals no later than _____, 2003. Stockholder
proposals should be addressed to the Secretary, 34595 3rd Avenue, Suite 101,
Abbotsford, BC, V2S.8B7, Canada.

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EXPERTS

The audited financial statements referred to in this prospectus and elsewhere in
the registration statement have been audited by Moss Adams LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included in reliance upon the authority of said firm as experts in giving said
reports.

LEGAL MATTERS

The validity of the issuance of common stock offered hereby will be passed upon
for Stratabase by Miller Thomson LLP, Vancouver, British Columbia, Canada.

AVAILABLE INFORMATION

Stratabase has been and is currently subject to the informational requirements
of the Securities Exchange Act of 1934, as amended. In accordance with those
requirements, we file, and after the conversion will file reports and other
information with the Securities and Exchange Commission. Such reports and other
information can be inspected and copied at the public reference facilities
maintained by the SEC in Room 1024, 450 Fifth Street, NW, Washington, D.C.
20549. Copies of such material may also be obtained at prescribed rates by
writing to the SEC's Public Reference Section, 450 Fifth Street, NW, Washington,
D.C. 20549 upon payment of the fees prescribed by the SEC. Please call the SEC
at 1-800-SEC-0330 for more information on the operation of its public reference
rooms. The SEC also maintains a Web site that contains reports, proxy and
information statements and other materials that are filed through the SEC's
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. This Web Site
can be accessed at http://www.sec.gov. Our reports, registration statements,
proxy and information statements and other information that we file
electronically with the SEC are available on this site.

This proxy statement/prospectus does not contain all the information set forth
in that registration statement and the related exhibits. Statements herein
concerning the contents of any contract or other document are not necessarily
complete, and in each instance reference is made to such contract or other
document filed with the SEC or included as an exhibit, or otherwise, each such
contract or document being qualified by and subject to such reference in all
respects. The registration statement and any subsequent amendments, including
exhibits filed as a part of the registration statement, are available for
inspection and copying as set forth above.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this proxy statement/ prospectus, and information filed later with
the SEC will update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 after
the date of this proxy statement/prospectus and before the date of the
conversion.

-51-

(a) Current Report of Form 8-K dated April 7, 2003;
(b) Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2002;
(c) Form S-8 filed on February 12, 2002; and
(d) Form 10-QSB for the fiscal period ended March 31, 2003.

You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:

Secretary
Stratabase

34595 3rd Avenue
Abbotsford, B.C. V2S 8B7
(604) 504-5811

You should rely only on the information incorporated by reference or provided in
this proxy statement/prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this proxy statement/prospectus is accurate as of any date other
than the date on the front of the document.

This proxy statement/prospectus is accompanied by a copy of Stratabase's 2002
Form 10-KSB and Form 10-QSB for the period ended March 31, 2003.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in this proxy
statement/prospectus may include "forward-looking statements". This information
may involve known and unknown risks, uncertainties and other factors which could
cause actual results, financial performance, operating performance or
achievements expressed or implied by such forward-looking statements not to
occur or be realized. Such forward-looking statements generally are based upon
our best estimates of future results, performance or achievement and based upon
current conditions and the most recent results of operations. Forward-looking
statements may be identified by the use of forward-looking terminology such as
"believes," "could," "possibly," "probably," "anticipates," "estimates,"
"projects," "expects," "may," "will," or "should" or the negative thereof or
other variations thereon or comparable terminology.

This proxy statement/prospectus contains forward-looking statements, including
statements regarding, among other things, our projected sales and profitability,
our growth strategies, anticipated trends in our industry and our future plans.
These statements may be found under "Business", as well as in this proxy
statement/prospectus generally. Our actual results or events may differ
materially from the results discussed in forward-looking statements as a result
of various factors, including, without limitation, the risks outlined under
"Risk Factors" and elsewhere in this proxy statement/ prospectus.

-52-

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, we do not assume responsibility
for the accuracy or completeness of the forward-looking statements after the
date of this prospectus.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers.

Nevada law permits a company to indemnify its directors and officers, except for
any act of dishonesty. Stratabase has provided in its by-laws for the
indemnification of officers and directors to the fullest extent possible under
Nevada law against expenses (including attorney's fees), judgments, fines,
settlements, and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of ours. In addition, Stratabase has the power, to the maximum extent and
in the manner permitted by Nevada Revised Statutes, to indemnify each of our
employees and agents (other than directors and officers) against expenses
(including attorneys' fees), judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with any proceeding arising by
reason of the fact that such person is or was an agent of Stratabase.

The Certificate of Incorporation of Stratabase limits or eliminates the personal
liability of its officers and directors for damages resulting from breaches of
their fiduciary duty for acts or omissions except for damages resulting from
acts or omissions which involve intentional misconduct, fraud, a knowing
violation of law, or the inappropriate payment of dividends in violation of
Nevada Revised Statutes.

Item 21. Exhibits.

3.1 Certificate of Incorporation of Registrant (a)
3.2 Registrant's Certificate of Amendment of Registrant's Certificate of
Incorporation (b)
3.3 By-Laws of Registrant (a)
3.4 Articles of Continuance - Articles and By-Laws of Stratabase Canada*
4.1 Specimen common stock certificate (a)
5.1 Legal opinion of Miller Thomson LLP*
10.2 Lease with SGS Enterprises (a)
10.3 Internet Business Service Agreement with BCTEL (c)
10.4 Distributor Agreement with COMTEX(c)
10.5 Stock Option Plan (d)
10.6 Internetworking Services Agreement with Telus Advanced Communications
(a)
10.7 Lease Agreement with George P. and Sandra J. Andreasen (c)
10.8 2002 Stock Option Plan (e)

-53-

23.1 Consent of Moss Adams LLP
23.2 Consent of Miller Thomson LLP (included in Exhbit 5.1)
99.1 Form of proxy for holders of common stock for special meeting*

(a) Previously filed with Stratabase's Form SB-2 on August 8,
1999.
(b) Previously filed with Stratabase's Information Statement in
June 2001.
(c) Previously filed with Stratabase's Form 10-KSB for the year
ended December 31, 2000.
(d) Previously filed with Stratabase's Form S-8 on January 29,
2000.
(e) Previously filed with Stratabase's Form S-8 filed on February
12, 2002.

*Incorporated by reference to our Registration Statement on Form S-4 filed
April 22, 2003, file number 333-104670

Item 22. Undertakings.

The undersigned registrant hereby undertakes that it will:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

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

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

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

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.

(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

-54-

Insofar as indemnification for liabilities arising under the Securities Act of
1933 business issuer pursuant to the foregoing provisions, or otherwise, the
small business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as express in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

(4) Respond to requests for information that is incorporated by reference
into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within
one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.

(5) To supply by means of a post-effective amendment all information concerning
a transaction, and the company being acquired involved therein, that was not the
subject of and included in the registration statement when it became effective.

-55-

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Abbotsford, Canada, on July 23, 2003.

STRATABASE INC.

By /s/ Trevor Newton
--------------------
Trevor Newton
President, Chairman, Chief Executive
Officer, Secretary and Treasurer
(principal executive officer and
principal financial officer)

By /s/ Fred Coombes
--------------------
Fred Coombes
Vice President of Corporate
Development

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

/s/ Trevor Newton Dated: July 23, 2003
-----------------
Trevor Newton Director

/s/ Fred Coombes Dated: July 23, 2003
-----------------
Fred Coombes Director

/s/ Scott Praill Dated: July 23, 2003
-----------------
Scott Praill Director

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