United States
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)

[X]     Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the period ended March 31, 2002

OR

[   ]     Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 0-27635

BASIC TECHNOLOGIES, INC.

|Colorado(State or other jurisdiction of incorporation or organization) | 84-1446622(I.R.S. Employer 
Identification No.)
|---------------------------------------------------------------------- | -----------------------------------------------

1420 Westbrook DriveSarasota,
Florida  34231

Registrant's Telephone No., including area code:
(941) 928-5110

__________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes X     No

As of May 15, 2002, there were 11,548,356 shares of the issuer's Common Stock outstanding.

INDEX

|PART I.  | FINANCIAL INFORMATION                                                                                            | Page
|-------- | ---------------------------------------------------------------------------------------------------------------- | ----
|Item 1.  | Financial statements                                                                                             |     
|         | Consolidated Balance Sheets - March 31, 2002 and 2001                                                            | 4   
|         | Consolidated Statements of Income (Loss) - March 31, 2002 and 2001                                               | 6   
|         | Consolidated Statements of Changes in Stockholders' Equity (Deficit) - Nine Months Ended March 31, 2002 and 2001 | 7   
|         | Consolidated Statements of Cash Flows - Nine Months Ended March 31, 2002 and 2001                                | 8   
|         | Notes to Unaudited Consolidated Financial Statements                                                             | 9   
|Item 2.  | Management's Discussion and Analysis of Plan of Operation                                                        | 19  
|         | Plan of Operation for the Next Twelve Months                                                                     | 19  
|         | Management's Discussion and Analysis of Financial Condition and Results of Operations                            | 22  
|PART II. | OTHER INFORMATION                                                                                                | 28  
|Item 1.  | Pending Legal Proceedings                                                                                        | 28  
|Item 2.  | Changes in Securities                                                                                            | 28  
|Item 3.  | Default by the Company on its Senior Securities                                                                  | 30  
|Item 4.  | Submission of Matters to a Vote of Security Holders                                                              | 30  
|Item 5.  | Other Information                                                                                                | 30  
|Item 6.  | Exhibits and Reports Filed on Form 8-K                                                                           | 30  

PART I     FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS

The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Selected information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made.  These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.

BASIC TECHNOLOGIES, INC.
Consolidated Balance Sheets

|               | March 31,2002                  | March 31,2001
|-------------- | ------------------------------ | -------------
|ASSETS         |                                |              
|CURRENT ASSETS |                                |              
|               | Cash (Deficit)                 | $    (2,499) 
|               | Accounts Receivable-Net        | 41,868       
|               | Inventories                    | 46,224       
|               | Prepaid Expenses               | 0            
|               | Deferred Tax Asset             | 134,354      
|               | TOTAL CURRENT ASSETS           | $   219,947  
|FIXED ASSETS   |                                |              
|               | Equipment                      | $   422,932  
|               | Land and Buildings             | 9,974        
|               |                                | 432,906      
|               | Less: Accumulated Depreciation | $ (121,895)  
|               | TOTAL FIXED ASSETS             | $   311,011  
|OTHER ASSETS   |                                |              
|               | Certificate of Deposit         | $   115,362  
|               | Capitalized Loan Fees          | 41,781       
|               | Deposits                       | 0            
|               | Organization Costs-Net         | 375          
|               | Proved Developed Oil Reserves  | 3,735,000    
|               | Acquisition Goodwill-Net       | 814,430      
|               | Deferred Tax Asset             | 546,628      
|               | TOTAL OTHER ASSETS             | $ 5,253,576  
|               | TOTAL ASSETS                   | $ 5,784,534  

The accompanying notes are an integral part of these financial
statements.

BASIC TECHNOLOGIES, INC.
Consolidated Balance Sheets

|                                           |                                                                                                                                                    | March 31,2002 | March 31,2001
|------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | -------------
|LIABILITIES AND STOCKHOLDERS'
      EQUITY |                                                                                                                                                   
|CURRENT LIABILITIES                        |                                                                                                                                                    |              
|                                           | Short Term Notes Payable                                                                                                                           | $    150,148  | $  345,935   
|                                           | Accounts Payable                                                                                                                                   | 259,930       | 270,195      
|                                           | Accrued Taxes and Interest Payable                                                                                                                 | 178,547       | 104,303      
|                                           | Current Portion of Long Term Debt                                                                                                                  | 50,115        | 66,814       
|                                           | TOTAL CURRENT LIABILITIES                                                                                                                          | $    638,740  | $  787,247   
|LONG TERM LIABILITIES                      |                                                                                                                                                    |              
|                                           | Accrued Interest Payable                                                                                                                           | $     49,707  | $   16,190   
|                                           | Deferred Tax Liability                                                                                                                             | 1,441,963     | 223,069      
|                                           | Payables-Shareholders                                                                                                                              | 600,091       | 535,294      
|                                           | Capital Lease Payable                                                                                                                              | 32,871        | 32,871       
|                                           | Long Term Notes and Obligations                                                                                                                    | 748,096       | 474,952      
|                                           | Less: Current Maturities                                                                                                                           | (50,115)      | (66,814)     
|                                           | TOTAL LONG TERM LIABILITIES                                                                                                                        | $ 2,822,613   | $1,216,282   
|                                           | TOTAL LIABILITIES                                                                                                                                  | $ 3,461,353   | $2,003,529   
|STOCKHOLDERS' EQUITY                       |                                                                                                                                                    |              
|                                           | Common Stock, $.00001 par value,
      100,000,000 shares authorized and 8,798,356 and 7,845,555 shares
      respectively, issued and outstanding | $        88   | $        78  
|                                           | Preferred Stock, $.00001 par value,
      10,000,000 shares authorized and no shares issued and outstanding                                        | 0             | 0            
|                                           | Paid in Capital                                                                                                                                    | 4,872,173     | 5,210,157    
|                                           | Stock Subscriptions                                                                                                                                | 41,750        | 500          
|                                           | Retained Earnings (Deficit)                                                                                                                        | (2,590,830)   | (735,615)    
|                                           | TOTAL STOCKHOLDERS' EQUITY                                                                                                                         | $ 2,323,181   | $ 4,475,120  
|                                           | TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY                                                                                                   | $ 5,784,534   | $ 6,478,649  

The accompanying notes are an integral part of these financial
statements.

BASIC TECHNOLOGIES, INC.
Consolidated Statements of Income
For the Nine Months Ended

|                       |                                                    | March 31,2002                      | March 31,2001          
|---------------------- | -------------------------------------------------- | ---------------------------------- | -----------------------
|REVENUES               |                                                    | $   241,072                        | $   241,072            
|COST OF SALES          | 4,522                                              | 5,732                             
|                       |                                                    | GROSS PROFIT                       | $   236,550            
|OPERATING EXPENSES     |                                                    |                                   
|                       | Selling, General and Administrative
      Expenses | 806,070                            | 568,041                
|                       | Interest                                           | 73,731                             | 59,372                 
|                       | Amortization                                       | 22,960                             | 34,269                 
|                       | Depreciation                                       | 36,176                             | 85,935                 
|                       | Bad Debt Expense                                   | 8,743                              | 0                      
|                       |                                                    | TOTAL EXPENSES                     | $   947,680            
|                       | NET INCOME (LOSS) FROM OPERATIONS                  | $  (711,130)                       | $  (423,672)           
|OTHER INCOME (EXPENSE) |                                                    |                                   
|                       | (Loss) - Asset Sale                                | $     (1,018)                      | $    
                0
|                       | Gain - Debt / Lawsuit Settlement                   | 23,222                             | 4,248                  
|                       | Interest Income                                    | 3,229                              | 1,637                  
|                       |                                                    | TOTAL OTHER INCOME (EXPENSE)       | 25,433                 
|                       |                                                    | NET INCOME (LOSS) BEFORE TAXES     | $  (685,697)           
|DEFERRED TAX BENEFIT   | 233,137                                            | 142,048                           
|                       |                                                    | NET INCOME (LOSS)                  | $  (452,560)           
|                       | Beginning Retained Earnings (Deficit)              | (919,376)                          | (459,876)              
|                       | Prior Period Adjustment                            | (1,218,894)                        | 0                      
|                       |                                                    | ENDING RETAINED EARNINGS (DEFICIT) | $(2,590,830)           
|EARNINGS PER SHARE     |                                                    |                                   
|                       | Income (Loss) for Common Stockholders              | $  
            (0.05)             | $   
           (0.03) 

The accompanying notes are an integral part of these financial
statements.

BASIC TECHNOLOGIES, INC.
Consolidated Statements of Changes in Stockholders' Equity
For the Nine Months Ended March 31, 2002 and March 31, 2001

|                            |                                                                                   | March 31,2002  | March 31,2001             
|--------------------------- | --------------------------------------------------------------------------------- | -------------- | --------------------------
|COMMON STOCK                |                                                                                  
|                            | Balance at Beginning of Period                                                    | $           78 | $ 
                77     
|                            | Issuance of shares of stock for
      expenses/debt                               | 18             | 1                         
|                            | Cancellation of Treasury Stock Shares                                             | (8)            | 0                         
|                            | Balance at End of Period                                                          | $           88 | $     
            78     
|STOCK SUBSCRIPTIONS         |                                                                                   |               
|                            | Balance at Beginning of Period                                                    | $          500 | $  
         28,500       
|                            | Subscriptions Received                                                            | 94,184         | 16,000                    
|                            | Stock Issued                                                                      | (52,934)       | (44,000)                  
|                            | Balance at End of Period                                                          | $      41,750  | $  
              500     
|PAID IN CAPITAL             |                                                                                   |               
|                            | Balance at Beginning of Period                                                    | $  5,258,105   | $  5,162,408              
|                            | Proceeds in Excess of Par Value of
      Common Stock Issued for Expenses / Debts | 382,210        | 47,749                    
|                            | Cancellation of Treasury Stock Shares                                             | (768,142)      | 0                         
|                            | Balance at End of Period                                                          | $  4,872,173   | $   5,210,157             
|TREASURY STOCK              |                                                                                   |               
|                            | Balance at Beginning of Period                                                    | $    (768,150) | $      
                 0
|                            | Cancellation of Treasury Stock Shares                                             | 768,150        | 0                         
|                            | Balance at End of Period                                                          | $           0  | $      
                 0
|RETAINED EARNINGS (DEFICIT) |                                                                                   |               
|                            | Balance at Beginning of Year                                                      | $   (919,376)  | $      (459,876)          
|                            | Prior Period Adjustment -
      Deferred Tax Expense                              | (1,218,894)    | 0                         
|                            | Net Loss for Period                                                               | (452,560)      | (275,739)                 
|                            | Balance at End of Period                                                          | $  (2,590,830) | $      (735,615)          
|TOTAL STOCKHOLDERS' EQUITY  | $   2,323,181                                                                     | $    4,475,120

The accompanying notes are an integral part of these financial
statements.

BASIC TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
For the Nine Months Ended

|                                                |                                                                                         | March 31,2002  | March 31,2001         
|----------------------------------------------- | --------------------------------------------------------------------------------------- | -------------- | ----------------------
|CASH FLOWS FROM OPERATING ACTIVITIES            |                                                                                         |               
|                                                | Net Income (Loss)                                                                       | $  (452,560)   | $  (275,739)          
|                                                | Adjustments to reconcile net income to
      net cash provided by operating activities: |                |                       
|                                                | Loss - Asset Sale                                                                       | 1,018          | 0                     
|                                                | Gain - Note / Lawsuit Settlement                                                        | (23,222)       | (4,248)               
|                                                | Depreciation / Amortization / Loan Fees                                                 | 67,605         | 120,204               
|                                                | Increase in Accounts Receivable                                                         | (8,534)        | (7,976)               
|                                                | Decrease in Inventories                                                                 | 0              | 3,340                 
|                                                | Increase in Deferred Tax Asset (net)                                                    | (233,137)      | (142,048)             
|                                                | Increase in Accounts Payable / Accrued
      Liabilities                                | 111,345        | 92,160                
|                                                | Increase in Prepaid Expenses                                                            | 0              | (3,089)               
|                                                | (Decrease) / Increase in Deposits                                                       | (760)          | 5,104                 
|                                                | Increase in Bad Debt Reserve / Expense                                                  | 8,743          | 0                     
|                                                | Expenses Paid With Stock                                                                | 365,383        | 1,750                 
|NET CASH USED BY OPERATING ACTIVITIES           | $  (164,119)                                                                            | $  (210,542)  
|NET CASH USED BY INVESTING ACTIVITIES           |                                                                                         |               
|                                                | Proceeds - Sale of Fixed Assets                                                         | $    15,000    | $          0          
|                                                | Purchase of Fixed Assets                                                                | (18,426)       | (17,794)              
|NET CASH USED BY INVESTING ACTIVITIES           | $    (3,426)                                                                            | $   (17,794)  
|CASH FLOWS FROM FINANCING ACTIVITIES            |                                                                                         |               
|                                                | Proceeds of Lawsuit Settlement                                                          | $    18,160    | $   
                0
|                                                | Stock Subscriptions Received                                                            | 1,232          | 0                     
|                                                | Proceeds From Sale of Common Stock                                                      | 0              | 16,000                
|                                                | Principal Payments on Bank and Other
      Notes                                        | (16,047)       | (50,096)              
|                                                | Proceeds of Notes Payable                                                               | 90,000         | 160,000               
|                                                | Proceeds of Shareholder Loans                                                           | 69,019         | 98,414                
|NET CASH PROVIDED BY FINANCING
      ACTIVITIES | $   162,364                                                                             | $    224,318  
|NET DECREASE IN CASH                            | $     (5,181)                                                                           | $      (4,018)
|CASH AT BEGINNING OF PERIODS                    | 2,682                                                                                   | 22,342        
|CASH AT END OF PERIODS (Deficit)                | $     (2,499)                                                                           | $     18,324  

The accompanying notes are an integral part of these financial
statements.

BASIC TECHNOLOGIES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002 and March 31, 2001

Note 1 - Nature Of Activities And Significant Accounting
Policies

Nature of Activities and Basis of Accounting

The Company, a Corporation, is engaged in the diversified
operations of oil field services and equipment leasing in Texas; development of
oil and gas ventures and related interests; and as an internet service provider
and e-business consultant in Hawaii, with its corporate headquarters located in
Lewisville, Texas. The Company incorporated in the state of Colorado on January
21, 1998 and its fiscal year end is June 30.

The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted accounting
principles.

Consolidation

The Company was formed as a parent holding company to operate
through subsidiaries. The financial statements consolidate the activities of the
parent along with:

| | Founders Industries, Inc., a Nevada corporation                    
| | -------------------------------------------------------------------
| | Yankee Development Corp., a Texas corporation                      
| | P & A Remediation, LLC, a Texas limited liability
      company    
| | Simpco, Inc., a Texas corporation                                  
| | P & A Remediation, LLC, an Oklahoma limited
      liability company
| | Cyber Cities Technologies, Inc., an Hawaii corporation             
| | Oilfieldjunk.com, LLC, a Texas limited liability
      company     

All significant intercompany transactions and balances have
been eliminated.

Cash

For purposes of the statement of cash flows, the Company
considers all short term securities purchased with a maturity of three months or
less to be cash equivalents. There are no restrictions on any balances.

Accounts Receivable

Bad debt expense is recognized by use of the allowance
method, with additions to the allowance and expense for this period, and total
bad debt expense of $8,743. There were no additions or bad debt expense in the
prior year's same period. There are no significant concentrations of credit
risk.

Inventories

Inventories are shown at cost, using the first-in, first-out
method. In addition to direct purchases, inventory is acquired through the
performance of services (See note about revenues).

Pipe inventory, in the form of a 35-mile long abandoned oil
gathering pipeline, was acquired for $35,000. The Company plans to dig up the
pipeline and prepare it for sale, once survey and staffing problems are
resolved.

Fixed Assets

These assets are carried at acquisition cost. Depreciation is
provided using the straight-line method over the estimated economic lives of the
assets, which range from 40 years for buildings to 3 to 15 years for all other
assets.

The Company rebuilt and upgraded certain newly acquired used
operating equipment prior to placing the equipment in the field. All upgrade
costs, including related payroll costs, were capitalized.

Intangibles

Amortization of Organization Costs is calculated over 60
months. Goodwill, created from the purchase of Cyber Cities Technologies, Inc.
has been amortized over 20 years, up to December 31, 2001.

Effective January 1, 2002, under the new rules concerning the
purchase method of accounting for acquisitions, acquisition goodwill is not
longer amortized. Pursuant to this, the Company will perform an analysis of the
acquisition goodwill at the end of the fiscal year. If its value is impaired to
any extent, the rules require a write-off of the impaired portion.

Capitalized Loan Fees

$50,250 in fees were paid to certain noteholders to extend
repayment terms, through the issuance or subscription for common stock. Fees are
amortized over the loan terms, with $8,469 expensed for this period. There was
no amortization in the prior year's same period.

Income Taxes

Income from the corporation is taxed at regular corporate
rates per the Internal Revenue Code. There are no provisions for current taxes
due to net available operating losses.

Deferred Tax Liability

The Company previously made acquisitions of companies,
accounting for these transactions using the "purchase" method of
accounting. This requires the acquisition to be accounted for at the fair value
of the assets received or given up, whichever is more readily available.
Further, this transaction caused a Deferred Tax Liability to be booked, due to
the difference between the book basis and tax basis of the assets received.

Common Stock

The Company's common stock is stated at par value ($.00001)
and the paid in capital represents the difference between the fair value of the
assets received and the common stock at par value. There are no provisions for
conversion rights, redemption requirements or unusual voting rights.

During the period, 850,000 shares of common stock held in
treasury for resale was cancelled by the Company.

Revenues

Services

The Company sells services as an Internet service provider
and consultant in Hawaii.

Revenue from oil field services and leasing comes from
providing equipment, with or without operators, to oil lease operating
companies.

Sales

Inventory, whether acquired by purchase or through services,
is resold to oil and construction customers. No sales were made during the
period.

Revenues of $4,254 have been earned from oil and gas
production during the fiscal period and $1,345 was earned for the prior year's
same period.

Interest

Interest expensed for the period is $73,731 and $59,372 for
the prior year's same period. No interest has been capitalized.

Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

Note 2 - Investments In Wholly Owned Subsidiaries

On April 23, 1998, the Company issued 5,305,625 restricted
common shares in exchange for 100% of Yankee Development Corporation. Yankee
Development Corporation became a wholly owned subsidiary of Basic Technologies,
Inc. The transaction was consummated as a purchase of assets, rather than a
pooling of interests. The valuation assigned to the purchase of Yankee
Development Corporation is based on the underlying net assets, which consist of
working interests in proven oil and gas reserves discounted to net present value
of net revenues less development and operating costs. The discount applied was
10%. The oil and gas reserves are the only substantial assets in the subsidiary
company.

Cost of Acquiring Yankee Development
Shares     $3,711,000

The valuation of oil and gas reserves is based on the market
price of oil. At the time of the valuation, the price used was $15/bbl. The
price of oil at the balance sheet date was $24.00 per barrel, and the current
price of oil is $25.00; however, the reserves are not to be revalued in excess
of their original valuation.

A related deferred tax liability of $1,218,894, correcting
the period of the acquisition, has been recorded in this period, representing
the difference between the book basis and the tax basis of the assets received.

In October 1998, the Company formed a Limited Liability
Company (P & A Remediation, LLC) with the intention of developing
environmental remediation in oil and gas fields. As of the statement date,
operations in this entity have been transferred to another subsidiary.

In January, 1999, the Company issued debt and 850,000
restricted shares of voting common stock in exchange for all of the outstanding
common stock of Simpco, Inc., a Texas corporation. That corporation, now a
wholly owned subsidiary, was intended to be the owner and lessor of the
consolidated entities' operating equipment. The transaction was accounted for
under the purchase method. As of the statement date, operations in this entity
have been transferred to another subsidiary.

On November 24, 1999, P&A Remediation LLC, an Oklahoma
Limited Liability Company, was formed for the purpose of beginning remediation
and sales operations in Oklahoma. As of the statement date, operations in this
entity have ceased.

Effective January 1, 2000, the Company issued 979,232
restricted shares of voting common stock in exchange for all of the assets and
operations, subject to certain liabilities, of Cyber City Honolulu, Inc., a
Hawaii corporation. The assets and liabilities were then transferred into a
newly formed, wholly owned Hawaii corporation, Cyber Cities Technologies, Inc.
The acquisition was accounted for using the "purchase" method of
accounting. The predecessor and successor companies are a regional Internet
service provider and Internet web page hosting service. The Company recognized
goodwill in the amount of $681,848. A related deferred tax liability of $223,069
was recognized, which increased the acquisition goodwill to $904,917.

On November 27, 2001, a Texas limited liability company,
Oilfieldjunk.com, LLC, was formed as a wholly owned subsidiary for the purpose
of continuing the suspended operations of other previously noted subsidiaries.

On December 31, 2001, Founders Industries, Inc., was formed
in Nevada. The purpose of creating it was to effect a tax-free reorganization
pursuant to the provision of Sections 351, 355, and 368 of the Internal Revenue
Code, and to transfer all of the assets, liabilities, and operations of the
Company and its subsidiary companies to Founders solely in exchange for Founders'
stock.

Note 3 - Employee Benefits

There are currently no qualified or non-qualified employee
pensions, profit sharing, or other plans authorized for any class of employees.
Group health insurance is provided to employees.

Note 4 - Leases

Capital Leases

There is one equipment lease, the terms of which mandate
accounting as a capital lease. The leased assets are depreciated with interest
imputed.

Amortization of capitalized lease costs is included with
depreciation. Payment on this lease has been suspended pending the results of
negotiation on terms. Total remaining obligations are $32,871.

Operating Leases

One subsidiary, which operates as an Internet service
provider, leased certain computer/communication equipment. Rental payments due
under existing leases are $822 for balance of the year ended June 30, 2002.
Total equipment rental expense for the period was $6,947 and $10,926 for the
prior year's same period.

There are no contingent rentals, subleases or related party
leases of equipment.

Leases for some physical facilities are on a month-to-month
basis. Two facilities are occupied under long-term leases. Future lease
commitments are:

| | Years EndingJune 30 | Amount   
| | ------------------- | ---------
| | 2002                | $   6,482
| | 2003                | 9,782    
| | Total               | $ 16,264 

Note 5 - Commitments And Contingencies

There are a few small lawsuits over disputed open commercial
accounts. The full potential cost is included in accounts payable.

Note 6 - Proven Developed Oil Reserves

The Company owns, through a subsidiary, proven developed oil
reserves on 2300 acres in west Texas. Valuation at the time of acquisition was
based upon the discounted net present value of net revenues, after development
and operating costs. The applied discount rate was 10%, and the oil price used
was $15.00 per barrel. The price of oil at the statement date was $24.00 per
barrel, and the current price of oil is $25.00 per barrel, but the reserves are
not to be revalued. Recoverable oil reserves are estimated to be 880,000
barrels. See also Note 2 above.

In December 2001, the Company acquired, through a subsidiary,
producing working interests in wells in Archer County, Texas by issuing a
promissory note for $24,000.

Note 7 - Income Taxes

Starting in 1998, the Company has adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS
No. 109"), which requires the use of the liability method in the
computation of income tax expense and the current and deferred income taxes
payable. Under SFAS No. 109, income tax expense consists of taxes payable for
the year and the changes during the year in deferred assets and liabilities.
Deferred income taxes are recognized for the tax consequences in future years of
differences between the tax bases and financial reporting bases of assets and
liabilities. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.

As there is a net operating loss in the current fiscal year,
the Company has calculated a deferred tax asset (benefit) as follows:

| | Fiscal Period March 31, 2002 | $ 233,137
| | ---------------------------- | ---------
| | Prior Years                  | 447,875  
| | Gross deferred tax asset     | $ 680,982

The deferred tax benefit has been allocated between current
and long term assets.

The Company has also recorded a deferred tax liability for
the difference between book bases and tax bases for the prior acquisitions of
Cyber Cities Technologies, Inc., and Yankee Development Corporation.

Deferred
tax
liability                           $1,441,963

Note 8 - Segment Reporting

The Company has adopted SFAS No. 131, and uses the Management
approach to determine and disclose reportable segment information. The Company's
reportable business segments are based upon distinctive types of activities or
services: oil field service and leasing; oil and gas production; and Internet
and e-business services. A full description of these segments is included in
Note 1. All segments operate within the United States. These segments are a
change from prior periods.

The accounting policies of the segments are the same as those
described in the summary of significant policies. Inter-segment services are
recorded using internal transfer prices set by the Company.

Note 9 - Earnings Per Share

Basic earnings (loss) per share are computed by dividing the
net loss by the weighted average number of common shares outstanding during the
period. There are no provisions or contracts that would create dilutive
potential common stock.

Note 10 - Accruals

Local and federal taxes, as well as interest on notes and
other payables have been accrued.

No accrual of vacation time is made, because no employee met
eligibility requirements at the statement date.

Note 11 - Long-Term Debt

In March, 1999, the Company issued $50,000 in notes payable,
due in March 2003 for working capital. These were refinanced in March 2001, with
additional funding. The new notes totaled $52,979, with payoff in February 2005.
Principal and interest accrued at 10% are payable monthly, and the notes are
secured by equipment.

In March, 1999, the Company issued a $11,500 mortgage
payable, due in March 2004 for the purchase of real estate. Principal and
interest accrued at 10% are payable monthly and the mortgage is secured by real
estate.

In February, 1999, the Company assumed $71,700 in unsecured
notes payable, due March 2004 for the purchase of inventory. A $35,000 note has
been cancelled in a lawsuit settlement. Interest accrued at 7%, as well as the
entire principal balance, is due at maturity.

From November, 1998 through May 1999, the Company issued six
notes for a total of $73,975 in notes payable for vehicle and equipment
purchases, due from August 2000 through March 2004. Principal and interest
accrued at rates from 7.85% to 16.5% are payable monthly and the notes are
secured by vehicles and equipment.

In August, 1999, the Company issued $19,000 in unsecured
notes maturing in August 2003 for working capital. Principal and interest
accrued at 11.5% are payable monthly.

In November, 1999, the Company issued a note for a total of
$18,300 for a vehicle purchase, due from December 1999 through November 2003.
Principal and interest accrued at 17.5% is payable monthly and the note is
secured by a vehicle.

In December, 2000, the Company renewed and extended a
short-term note of $100,000 to mature in November, 2002. Accrued interest of 10%
is payable at maturity, and the accrued interest is classified as a long-term
liability.

In December, 2000, the Company issued a promissory note for
$110,298 to acquire a certificate of deposit maturing in January, 2002. The note
bears interest of 10%, and both principal and interest are payable at maturity
in December, 2003.

In October, 2001, the Company issued a promissory note for
$75,000 for working capital, with interest at 10%, with both interest and
principal maturing in October, 2003.

In December, 2001, the Company issued a $24,000 note, at 9%
interest, both interest and principal maturing in December, 2004, for the
purchase of producing oil working interests.

In October, 2001, the Company issued a $15,000 promissory
note, at 10% interest, both principal and interest maturing in October, 2003,
for funds to acquire equipment.

Certain installment notes payable for equipment purchases are
non-interest bearing. On these notes, interest has been imputed at 9%, the
related asset has been discounted, and the imputed/discounted interest is
included in interest expense.

There are no restrictive or subordinate covenants other than
standard liens. Certain debts have the option to be converted to common stock at
a price of $1.00 per share.

Maturities of long term debt are as follows:

| | Year EndingJune 30 | Amount    
| | ------------------ | ----------
| | 2002               | $   20,142
| | 2003               | 273,744   
| | 2004               | 420,362   
| | 2005               | 33,848    
| | Total              | $ 748,096 

Short Term Notes Payable

Between November, 1999 and June, 2001, the Company issued
short term promissory notes totaling $409,291 for working capital needs.

Interest rates varied from 10% to 12%, payable monthly on
some notes, and at maturity on others. Some notes were secured by equipment and
contract proceeds. Maturities varied, and renewal and extension provisions were
available.

Certain short-term notes were converted to long-term
maturities.

Note 12 - Related Party Transactions

Open account cash advances have been made by various
shareholders. As of the financial statement date, no promissory notes, interest
rates or repayment schedules have been set. Interest is scheduled to begin
accruing on July 1, 2002. The balances are classified as long term obligations.

Note 13 - Exercise Of Stock Options

During the last quarter of 2001, stock options were granted
to certain officers and directors for services rendered from July 1, 1998
through the current fiscal year. This was done pursuant to an incentive stock
option plan adopted previously by the shareholders of the Company. All options
were exercised in January 2002. The options were authorized, exercised, and
accounted for under the "intrinsic value method". Compensation, as
stated below, was recorded based upon the excess of the stock's market value
on the exercise date over the option price :

| | Officer Compensation | $ 189,959
| | -------------------- | ---------
| | Directors Fees       | 34,493   

In January 2002, options granted in 2001 to an unrelated
company for financial, merger, and acquisition services were exercised.
Consulting fee expense of $124,925 was recorded, based upon the excess of the
fair market value on the exercise date over the option price.

No difference in timing between the income tax deduction and
the recording of expenses is anticipated. Accordingly, no effect on deferred
taxes has been recorded.

Note 14 - Dividends Declared

The Board of Directors has declared a dividend to the Company
shareholders of record on February 8, 2002, to be in the form of all 8,198,356
Shares of Founders Industries, Inc. (wholly owned subsidiary) common stock owned
by the Company. The shares will be distributed by means of a Shareholder Trust
on a pro-rata basis, as soon as the registration of Founders Industries, Inc.
shares with the SEC and NASD is completed. This will have the effect of
splitting off all of the Company's subsidiaries and current consolidated
operations.

Note 15 - Supplemental Disclosures-Statement Of Cash Flows

Operating activities reflect interest paid of $45,139 for the
current period and $53,253 for the prior fiscal year's period. Liabilities of
$24,702 were retired through the issuance of common stock. $2,000 was retired in
the prior fiscal year's period.

Note 16 - Comprehensive Income

The Company had no elements of comprehensive income during
the period.

BASIC TECHNOLOGIES, INC.
Table of Reportable Segments
For the Nine Months Ended March 31, 2002

|                                             | Oil & GasProduction               | Oil Field
      Service &
      EquipmentLeasing | Internet &E-Business | Eliminations  | Consolidated
|-------------------------------------------- | --------------------------------- | ------------------------------------------------ | -------------------- | ------------- | ------------
|Sales to Unaffiliated Customers              | $       4,254                     | $     4,480                                      | $   232,338          | $           0 | $    241,072
|Inter-Segment Sales                          | 0                                 | 0                                                | 0                    | 0             | 0           
|                                             | Total Sales                       | $       4,254                                    | 4,480                | 232,338       | 0           
|Operating Income (Loss)                      | $       1,279                     | (75,430)                                         | (152,819)            | 0             | (226,970)   
|Corporate Expenses                           |                                   |                                                  |                      |               | (484,160)   
|                                             | Total Operating Income (Loss)     |                                                  |                      |               |             
|Depreciation & Amortization                  | $0                                | 24,307                                           | 27,479               | 0             | 51,786      
|Corporate Expenses                           |                                   |                                                  |                      |               | 7,350       
|                                             | Total Depreciation & Amortization |                                                  |                      |               |             
|Interest Revenue (Not Allocated to Segments) |                                   |                                                  |                      |               | 3,229       
|Interest Expense                             | $            
         0          | 27,609                                           | 4,038                | 0             | 31,647      
|Corporate Expenses                           |                                   |                                                  |                      |               | 42,084      
|                                             | Total Interest Expense            |                                                  |                      |               |             
|Segment Assets                               | $  3,735,000                      | 270,068                                          | 722,011              | 0             | 4,727,079   
|General Corporate Assets                     |                                   |                                                  |                      |               | 1,057,455   
|                                             | Total Assets                      |                                                  |                      |               |             
|Expenditures for Segment Assets              | $24,000                           | $    15,000                                      | $       3,157        | $           0 | $     42,157
|Expenditures for Segment Fixed Assets        | $0                                | $    15,000                                      | $        3,157       | $           0 | $     18,157
|Corporate Assets                             |                                   |                                                  |                      |               | 0           
|                                             | Total Expenditures for Fixed      |                                                  |                      |               |             

The accompanying notes are an integral part of these financial
statements.

BASIC TECHNOLOGIES, INC.
Table of Reportable Segments
For the Nine Months Ended March 31, 2001

|                                            | Oil & GasProduction | EnvironmentalRemediation | EquipmentLeasing | Internet &E-Business | Elimin-ations | Consoli-dated
|------------------------------------------- | ------------------- | ------------------------ | ---------------- | -------------------- | ------------- | -------------
|Sales to Unaffiliated Customers             | $1,345              | $     4,000              | $    1,527       | $   322,805          | $         0   | $ 329,677    
|Inter-Segment Sales                         | 0                   | 0                        | 0                | 0                    | 0             | 0            
|Total Sales                                 | $      1,345        | 4,000                    | 1,527            | 322,805              | 0             | 329,677      
|Operating Income (Loss)                     | $(94)               | (47,687)                 | (77,824)         | (54,318)             |               | (179,923)    
|Corporate Expenses                          |                     |                          |                  |                      |               | (243,749)    
|Total Operating Income (Loss)               |                     |                          |                  |                      |               | (423,672)    
|Depreciation & Amortization                 | $0                  | 1,450                    | 74,416           | 43,547               | 0             | 119,413      
|Corporate Expenses                          |                     |                          |                  |                      |               | 791          
|Total Depreciation &
      Amortization     |                     |                          |                  |                      |               | 120,204      
|Interest Revenue (Not Allocated toSegments) |                     |                          |                  |                      |               | 1,637        
|Interest Expense                            | $0                  | 16,559                   | 4,925            | 5,363                | 0             | 26,847       
|Corporate Expenses                          |                     |                          |                  |                      |               | 32,525       
|Total Interest Expense                      |                     |                          |                  |                      |               | 59,372       
|Segment Assets                              | $3,711,000          | 387,772                  | 1,127,486        | 774,030              | (215,222)     | 5,785,066    
|General Corporate Assets                    |                     |                          |                  |                      |               | 693,583      
|Total
    Assets                            |                     |                          |                  |                      |               | 6,478,649    
|Expenditures for Segment Assets             | $0                  | $0                       | $0               | $    14,860          | $0            | $14,680      

The accompanying notes are an integral part of these financial
statements.

|ITEM 2. | Management's discussion and analysis of Financial
      Condition and results of Operations
|------- | -------------------------------------------------------------------------------------------
|(a)     | Plan of Operation for the Next Twelve Months                                               

The
Company currently serves as a holding company for one wholly-owned corporate
subsidiary, Founders Industries, Inc.

Founders
Industries, Inc., serves as a holding company for three wholly-owned corporate
subsidiaries; Yankee Development Corporation (hereafter Yankee); Simpco, Inc.
(hereafter Simpco); and Cyber Cities Technologies, Inc. (hereafter CCTech) and
three limited liability companies, P & A Remediation, LLC, a Texas limited
liability company (hereafter PAR Texas); P & A Remediation, LLC, an Oklahoma
limited liability company (hereafter PAR Oklahoma); and Oilfieldjunk.com LLC. a
Texas limited liability company. PAR Texas and PAR Oklahoma are collectively 'P
& A Remediation'. Yankee owns a working interest in proven developed oil
reserves on 2,300 acres in Tom Green County, Texas. The assets owned by Yankee
are held by production of other leases, and thus do not require annual bonus or
delay rental payments, and have no legal commitments of any kind to maintain the
legal integrity of the assets.

P
& A Remediation (Texas), LLC., ceased operations in November 2001. P & A
Remediation (Oklahoma), LLC., ceased operations in July 2001. Simpco, Inc.,
ceased operations in October 2001.

Yankee
Development Corporation owns assets, but has done minimal business to date.

From
its rented north Texas yard, through Oilfieldjunk.com, the Company intends to
perform services ancillary to environmental remediation and salvage operations
for the oil industry; and to market and sell construction materials, pipe /
steel tubulars, and used oil field equipment obtained from salvage operations
(or acquired for resale) on the secondary wholesale business market. From its
base of operations, the Company intends to expand into the internet using "oilfieldjunk.com",
as a world-wide market place for used oil field equipment and tubulars.

Subject
to securing the necessary equity infusion or long term financing, Company
management hopes to establish day to day operations in its rented Olney, Texas,
yard location. In November 2001, the Company formed Oilfieldjunk.com LLC., a
Texas limited liability company, to attempt to assimilate the potentials for
operations of the Company's previous operations in the oilfield tubular and
secondary market for oilfield equipment business. A new month to month agreement
was reached with the owner of the Olney, Texas, yard and with such, the Company
will house the Company's threading equipment, there to attempt to establish an
operating pipe threading and testing facility.

Company
management is of the opinion that a significant portion of the pipe testing
market in north Texas may be immediately available to the Company. The
implementation of this plan will require the Company securing skilled employees,
contractual consultants, or joint venture partners, to establish the day to day
operations. The consultants and / or venture partners could be previously
identified potential competitors of the Company's previous operations in the
pipe market. Based upon industry knowledge, Company management believes that the
oil & gas operators, steel tubular and pipe dealers, and re-sale equipment
marketers are candidates for services of the Company's pipe threading and
testing facilities. However, there can be no assurance that this pipe testing
and threading market will continue, that the Company can establish complementary
and efficient day to day operations in its facilities, that the Company will
have the resources to complete the work under any such operations, or that the
Company after establishing operations, will be able to operate profitably.

Negotiations
with potential skilled employees, contractual consultants, and/or joint venture
partners, in Texas are currently in the beginning phases with Company
management. There can be no assurance that the Company can successfully
negotiate with consultants or skilled employees to the Company's benefit, that
the previously identified markets will continue, that the Company will be able
to secure any contracts for any of the market jobs, that the Company will have
the resources to complete the work under any such contracts, or that the
Company, if it receives any such contracts, will be able to complete them
profitably.

Company
management is currently seeking negotiations with outside financial partners for
a joint venture, or private placement, to raise sufficient capital for Yankee to
cause the proper drilling and completion of a sufficient number of wells to
prove or disprove the Yankee Unit field's engineering and reserves study. This
program under consideration and negotiation could possibly mean the drilling of
up to sixteen (16) initial wells, at a total cost of up to $2,400,000 to the
financial partners. As of the date of this report, there exist no agreements,
arrangements or understandings with respect to any potential source of funding.
The results of drilling such wells can never be determined in advance. The
industry has a history of unprofitable efforts resulting from dry holes, or
commercial wells which fail to produce in quantities sufficient to provide an
economic return. Yankee Development, since inception, has generated negligible
revenues from the production of oil. No assurance can be given that Yankee
Development will successfully negotiate the funding of its development program,
generate any revenues, or achieve profitability from the production of the
proven developed reserves owned as of the date hereof, or from oil and/or gas
properties, if any, acquired in the future.

The
Company hopes to develop a continuing plan for internal growth of the existing
markets of its internet subsidiary, CCTech, which services the consumers of the
State of Hawaii with high speed Internet Access for residence and business uses.
Currently doing business and maintaining offices on the islands of Oahu and
Maui, CCTech has the capability to provide computer and internet commerce
consultation services to businesses outside of its current market. The
development of a nationwide marketing plan of a 'business to business' division
is being planned. It is contingent upon the Company securing financing necessary
to re-align and reorganize Company infrastructure to expand its core business to
the islands of Kauai and the Big Island of Hawaii. This expansion will allow
CCTech to be the only regional statewide ISP in the market. Once in place and
operating, a long term plan for nationwide internet service will need to be
implemented. A review of the market position of CCTech, and the market
opportunities available to the Company is currently in process by Company
management. Historically, CCTech has not performed to Company expectations, and
the continued operations of the subsidiary are subject to a reversal of a
negative trending in its operating cash flow. The Company is seeking an
acquisition or combination candidate for operations, and such an acquisition or
combination may potentially require additional operating capital. There can be
no assurance that the Company can successfully secure financing necessary to
make the expansion to state-wide operations, that the market available for the
core business will continue, that the Company will be able to get new customers
in newly opened markets, that the Company will have the resources to provide
services if such markets are opened, and if it will be able to operate them
profitably.

The
Company hopes to diversify its plan of operations through the acquisition of
companies engaged in businesses unrelated to the oil and gas business. The
Company is not presently engaged in negotiations for the acquisition of
companies operating in industries related and unrelated to the Company's core
business.

The
activities of the Company in all subsidiaries to date have been primarily
focused on securing long term financing or equity infusion; evaluating and
forming mid-level management teams; researching and testing actual project
operations and profitability; and developing and identifying market
opportunities that can be taken advantage of by the Company's positions in its
various subsidiaries. Accordingly, management does not consider the historical
results of operations to be representative of future results of operation of the
Company. This Form 10-QSB should be read in conjunction with previous filings
filed by the Company.

The
Company expects to meet our capital needs for the next 3 months with operating
cash flow, current cash and receivables balances, and proceeds of to be
negotiated operating financing with various market sources. Operating beyond 3
months, or to make any significant expansion, will require the proceeds from the
sale or issuance of capital stock, lease financing, or additional debt. The
Company does not anticipate any out of budget operational shortfalls in the
coming fiscal year. We regularly examine financing alternatives based on
prevailing market conditions and expect to access the capital markets from time
to time based on our current and anticipated cash needs and market
opportunities. Over the longer term, we will be dependent upon obtaining the
long term equity infusion or financing necessary to implement our upgraded
operations in both the newly created environmental remediation subsidiaries and
in the internet subsidiaries. Each subsidiary will be then be dependent upon
positive operating cash flow and, to the extent cash flow is not sufficient, the
availability of additional financing, to meet our debt service obligations.
Insufficient funding may require us to delay or abandon some of our planned
future expansion or expenditures, which could have a material adverse effect on
our growth and ability to realize economies of scale.

Our
business strategy has required, and is expected to continue to require,
substantial capital to fund acquisitions, working capital, capital expenditures,
and interest expense.

As
of March 31, 2002, the Company had approximately $115,300 in cash and
certificates of deposit and $52, 300 in current receivables.

The
Company also has significant debt service requirements. At March 31, 2002, our
interest-bearing liabilities were $980,000 and the expected annual interest
expense associated with it is approximately $50,000. The interest expense and
principal repayment obligations associated with our debt could have a
significant effect on our future operations.

Our
anticipated expenditures are inherently uncertain and will vary widely based on
many factors, including operating performance and working capital requirements,
the cost of additional acquisitions and investments, the requirements for
capital equipment to operate our business and our ability to raise additional
funds. Accordingly, we may need significant amounts of cash in excess of our
plan, and no assurance can be given as to the actual amounts of our future
expenditures. We will have to increase revenue without a commensurate increase
in costs to generate sufficient cash to enable us to meet our debt service
obligations. There can be no assurance that we will have sufficient financial
resources if operating losses increase or additional acquisition or other
investment opportunities become available.

The
Company is not in the business of producing any item that would require product
research and development, other than the continual market analysis by Company
and subsidiary management.

Other
than, and subject to, securing the required financing necessary to implement
upgraded operations in its environmental and internet subsidiaries, and the
implementation of the same, there is (1) no expected purchase or sale of plant
and significant equipment; or (2) no expected significant changes in the number
of employees, relative to the size of previous years operations.

|(b) | Management's Discussion and Analysis of Financial
      Condition and Results of Operations.
|--- | --------------------------------------------------------------------------------------------

Forward Looking Statements

The
following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains certain forward-looking statements regarding
future financial condition and results of operations and the company's business
operations. We have based these statements on our expectations about future
events. The words "may," "intend," "will,"
"expect," "anticipate," "objective,"
"projection," "forecast," "position" or negatives
of those terms or other variations of them or by comparable terminology are
intended to identify forward-looking statements. We have based these statements
on our current expectations about future events. Although we believe that our
expectations reflected in or suggested by our forward-looking statements are
reasonable, we cannot assure you that these expectations will be achieved. Our
actual results may differ materially from what we currently expect. Important
factors which could cause our actual results to differ materially from the
forward-looking statements include, without limitation (1) general economic and
business conditions, (2) ability to cost effectively integrate multiple
technologies, (3) effect of future competition, and (4) failure to raise needed
capital. All of our forward-looking statements are qualified by this cautionary
statement. We do not undertake to revise any of these statements to reflect
changes that may occur that might effect the bases upon which these statements
are made.

Overview

The
Company serves as a holding company for one wholly owned subsidiary, Founders
Industries, Inc., that serves as a holding company for three wholly-owned
corporate subsidiaries and three wholly owned limited liability companies:
Yankee; Simpco; CCTech; PAR Texas; PAR Oklahoma; and Oilfieldjunk.com. PAR Texas
and PAR Oklahoma are collectively 'P & A Remediation'.

The
Company created PAR Texas in October 1998 to take advantage of the environmental
remediation (oil well plugging) opportunities available in central west Texas
and in north Texas. In February 1999, the Company acquired Simpco, Inc., a Texas
corporation, in a stock for stock exchange with the then mid-level management of
P & A Remediation. With a parallel and complementary operation intended, in
November 1999, the Company created PAR Oklahoma to take advantage of the
environmental remediation (oil well plugging) opportunities in northeast
Oklahoma. Due to conflicts with mid-level management in control of actual day to
day operations of P & A Remediation, and what the Company deemed factual
misrepresentations of potentials for revenue, and status of acquired equipment
titled in Simpco, Inc., the operations of both subsidiaries were discontinued
and the employees and subcontractors were fired for cause. Litigation between
the Company and the then mid-level day to day management was instituted in three
lawsuits, which have subsequently (August 2001) been mediated to dismissal with
prejudice.

The
Company created Oilfieldjunk.com in November 2001 to take advantage of the
potential for operations in the oilfield tubular and secondary market for
oilfield equipment business. The Company intends to house the Company's heavy
duty pipe and oil well tubing threading equipment in its rented Olney, Texas,
yard to attempt to establish a full scale pipe threading and testing facility.
Company management is of the opinion that a significant portion of the pipe
testing market in north Texas may be immediately available to the Company. The
implementation of this plan will require the Company securing skilled employees,
contractual consultants, or joint venture partners, to establish the day to day
operations. The consultants and / or venture partners could be previously
identified potential competitors of the Company's previous operations in the
pipe market. Based upon industry knowledge, Company management believes that the
oil & gas operators, steel tubular and pipe dealers, and re-sale equipment
marketers are candidates for services of the Company's pipe testing and
threading services.

Pipe
threading and testing revenue figures assume a successful meeting of the
expansion funding requirements, and that operations are instituted as planned by
Company management. There is no assurance as to if, or when, Company operations
may be instituted to day to day operations in any field related to the
environmental remediation / salvage, or secondary market sales of oilfield
related equipment or pipe (tubulars) inventory business.

With
regard to the oil services subsidiary (Oilfieldjunk.com LLC.), there are no
known trends, events or uncertainties that have or are reasonably likely to have
a material impact on our short-term or long-term liquidity, or on our internal
and external sources of liquidity. Likewise, there are no material commitments
for capital expenditures. There are no known trends, events or uncertainties
that have had or that are reasonably expected to have a material impact on the
potential net sales or revenues or income from the Company's re-entry into
previously suspended plugging and remediation operations. There are no
unforeseen significant elements of income or loss that may arise from the
Company's re-entry into previously suspended operations. There are no seasonal
aspects that may have a material effect on the financial condition or results of
suspended operations.

There
has been no development activity with the Company's proven oil & gas
reserves in Yankee. There is a significant uncertainty inherent to the oil &
gas production and development industry. The worldwide trend of increasing crude
oil and natural gas prices prompted Company management to investigate numerous
possible financing vehicles that may be required to secure the equity infusion
or long term financing necessary to develop Yankee's assets. With the worldwide
increase in the price of oil, there has been renewed drilling and production
activity in the areas of Texas where the company has interests. This renewal of
activity may create unforeseen delays in the availability of subcontractors for
all phases of an oil & gas well drilling and development program. This delay
could cause financial difficulty and shortage of cash flow budgets that are
relied upon to profitably and efficiently develop the Company's asset.

Other
than other historical industry and public information, Company management is not
aware of any known trends, events or uncertainties that have or are reasonably
likely to have a material impact on the Company's short-term or long-term
liquidity, or on our internal and external sources of liquidity. We have no
material commitments for capital expenditures in Yankee. Other than historical
and public information, there are no known trends, events or uncertainties that
have had or that are reasonably expected to have a material impact on the net
sales or revenues or income from continuing operations without development of
the Company's oil & gas reserves. Should the Company be successful in
securing the financing necessary to fund the development of the oil & gas
reserves, there could be a significant element of income or loss that could
arise from our continuing operations. This significant element would be a result
of the Company being able to successfully develop to production its proven oil
& gas reserves, or disproving the reserves and engineering premise of such
with the drilling of dry holes that result in no oil & gas production. The
cause for such material changes from period to period in one or more line items
of our financial statements would be the results of the Company's development
drilling program. Though the Texas seasons create moderate difficulty with any
outside operations, there are limited seasonal aspects that might have a
material effect on the financial condition or results of operation of the
development drilling program. No assurance can be given that Yankee Development
will successfully negotiate the funding of its development program, generate any
revenues, or achieve profitability from the production of the proven developed
reserves owned as of the date hereof, or from oil and/or gas properties, if any,
acquired in the future.

The
Company has a significant stock investment in its internet subsidiary, CCTech,
and intends to develop a plan for internal growth of its existing markets. With
an effective January 1, 2000, acquisition by the Company, the subsidiary has a
stated purpose to provide services to the consumers of the State of Hawaii with
high speed Internet Access for residence and business uses. With operations
currently on the islands of Oahu and Maui, CCTech has not performed to the
expectations of the Company, and has operated at a relative breakeven position
in comparison to its fiscal operations prior to acquisition by the Company. An
expansion of its core business, by acquisition or combination with a similarly
situated ISP operation is sought by management to increase operating revenues,
while combining or reducing commensurate operating expenses. This core business
model is planned to be the foundation for the development of a nationwide
marketing plan of a 'business to business' division. This expansion of the
current operations to include statewide operations and expanded broadband
capabilities to handle DSL customers is considered critical to continued success
in the regional internet service provider's operations. This expansion is
contingent upon the Company securing financing necessary to re-align and
re-organize Company infrastructure to expand its core business to the islands of
Kauai and the Big Island of Hawaii. There can be no assurance that the Company
can successfully secure financing necessary to make the expansion to state-wide
operations, that the market available for the core business will continue, that
the Company will be able to get new customers in newly opened markets, that the
Company will have the resources to provide services if such markets are opened,
and if it will be able to operate them profitably.

The
expansion of the Company's core business of dialup and DSL service to previously
unserved markets could have a profound effect on the internet subsidiary's
bottom line. A significant market share and volume increase in operating revenue
could require only incremental increases in operating costs of the core
infrastructure of the subsidiary's Honolulu based main operations center. The
reconfiguring and re-allocation of the subsidiary's infrastructure will allow
the expansion of the nationwide 'business to business' portal and to allow the
expansion of local business broad band development.

There
are significant uncertainties inherent to the internet. However, in the core
business of the regional ISP operations of CCTech, there are no known trends
that have or are reasonably likely to have a material impact on the small
business issuer's short-term or long-term liquidity, or on our internal and
external sources of liquidity. Other than the need for expansion for profitable
operations, there are no known material commitments for capital expenditures, or
known trends, events or uncertainties that have had or that are reasonably
expected to have a material impact on the net sales or revenues or income from
continuing operations. There are no known significant elements of income or loss
that do not arise from our continuing operations, and there are no seasonal
aspects that had a material effect on the financial condition or results of
operation.

Spin-Off and Change in Control

Effective
December 13, 2001, the Company entered into a previously announced Letter of
Understanding with Gary Brown pursuant to which it agreed to spin-off its
existing subsidiaries through the formation of a new holding company, Founders'
Industries, Inc., which was formed for that purpose. The announced record date
for the spin-off of Founders Industries is February 8, 2002. Pending
completion of the spin-off, the existing operations of the Company have been
operating through Founders Industries as a wholly-owned subsidiary and are
reported for the period covered by this Report on a consolidated basis.

Effective May 1, 2002, four of the seven members of the Company's Board of
Directors voluntarily resigned their positions. Those resigning directors were
Bryan Walker, Laura Walker, Richard Smith and Derek Smith. The resignations were
not the result of any disagreement concerning the policies or practices of the
Company. As a result of the resignations, the remaining directors are Gary
Brown, Steve Jesson and William Chastain. The Board has no commitments,
arrangements or plans to fill the vacancies on the Board resulting from those
resignations. The resigning directors continue to serve in their respective
capacities as officers and directors of Founders Industries.

PART II    OTHER INFORMATION

Item 1.     Pending Legal
Proceedings

Company management
does not know of any legal proceedings to which the Company or its subsidiaries
are parties or to which the property of any of such companies is the subject
which are pending, threatened or contemplated, or of any unsatisfied judgments
against the Company or its subsidiaries except as described below.

PAR Texas has
ceased operations, and with current trade accounts payable of approximately
$47,000 is involved in some disputes on open accounts, a number of which have
resulted in suits on sworn account being filed in four counties in the State of
Texas. In each matter, PAR Texas has responded to the action by the Movant with
denial of their statements and claims against the company and made other
contacts to attempt a negotiated resolution. Each of the matters has either been
brought to judgment or is being negotiated for a settlement as of the date
hereof. The disputed account balances total less than $30,000 and management
does not believe the disputes are likely to have a material adverse effect on
the Company's financial condition. The Company has accrued what it believes to
be amounts sufficient to properly reflect its liabilities in these cases.

In August of 2000,
three lawsuits were filed in Federal and state courts in Texas and Oklahoma,
with the Company opposing the former owners of Simpco, as well as former
employees. All three matters were resolved in a mediated global settlement
agreement in August of 2001. The three lawsuits have been dismissed with
prejudice to re-filing the same, though the actual settlement and return of many
of the Company's assets have not been completed as of March 31, 2002. Company
management intends to vigorously pursue the return of the Company's equipment as
mutually agreed in the arbitrated settlement agreement between the parties.

Item 2.     Changes in Securities

(a) There have been
no material modifications to the instruments defining the rights of the holders
of any class of registered securities.

(b) There have
been no material limitations or qualifications on the rights evidenced by any
class of registered securities by the issuance or modification of any other
class of securities.

(c) The Company
continued a private placement offering for additional funding. At the balance
sheet date, $500 in funds had been received for additional stock, but the shares
have not been issued, pending receipt of certain documents. The amounts received
are included in stockholders' equity.

(d) During July of
2001, the Company issued 5,250 shares of restricted common stock for the payment
of certain fees and authorized the future issuance of 27,000 shares of
restricted common stock for the payment of certain fees.

(e) During October
of 2001, the Company issued 6,250 shares of restricted common stock for the
payment of certain fees and authorized the future issuance of 14,250 shares of
restricted common stock for the payment of certain fees.

(f) Company
shareholders previously approved an incentive stock option plan, but until 2001
no options had been granted. During October of 2001, for the year ending June
30, 1999, the Company granted stock options exercisable at $.0001 per share,
totalling 60,000 shares as consideration for the services of Bryan L. Walker
acting as Chief Executive Officer of the Company. For the year ending June 30,
1999, the Company granted stock options exercisable at $.0001 per share,
totalling 30,000 shares as consideration for the services of Richard C. Smith
acting as Chief Financial Officer of the Company. For each of the years ending
June 30, 2000, and June 30, 2001, the Company granted stock options exercisable
at $.0001 per share, totalling 100,000 shares, per year, as additional
consideration for the services of Bryan L. Walker acting as Chief Executive
Officer of the Company. For each of the years ending June 30, 2000, and June 30,
2001, the Company granted stock options exercisable at $.0001 per share,
totalling 75,000 shares, per year, as consideration for the services of Richard
C. Smith acting as Chief Financial Officer of the Company. For the year ending
June 30, 2002, the Company granted stock options exercisable at $.0001 per share
proportionate to the amount of time served in office, totalling 100,000 and
75,000 shares respectively to Bryan L. Walker and Richard C. Smith as
consideration for their services acting as Chief Executive and Chief Financial
Officers of the Company. The option exercise date was January 3, 2002, and all
options were exercised.

(g) During October
of 2001, pursuant to a previously approved directors stock option plan for the
years ending June 30, 1999; June 30, 2000; June 30, 2001; and June 30, 2002; the
Company granted stock options exercisable at $.0001 per share proportionate to
the amount of time served in office, totalling 10,000 shares per fiscal year, to
the non-salaried members of the Board of Directors, as consideration for their
services acting as Directors of the Company. Michael Bacon is the only Director
that has been paid an executive salary and was not offered the option. The
option exercise date was January 3, 2002, and all options were exercised.

(h) During
December of 2001, for and in consideration of the introduction of, and the
successful negotiation of, a 'Letter Of Understanding For Corporate Redirection'
with an investment group led by Gary L. Brown, the Company authorized stock
options exercisable at $.0001 per share, totalling 250,000 shares, for the
services of Bryan L. Walker and Richard C. Smith (acting for the Company); and
stock options exercisable at $.0001 per share, totalling 250,000 shares, for the
services of Kent Brandt (acting for American Merger Consultants). The options
were exercised on January 3, 2002.

(i) During December
of 2001, the Company issued 24,702 shares of restricted common stock for the
payment of certain fees and debts of the Company.

(j) On February
20, 2002, the Company issued 1,000,000 shares of restricted common stock each to
Gary Brown and Steve Jesson. The shares were issued under the previously
announced Letter of Understanding and are subject to certain performance
milestones being achieved.

(k) On February 20,
2002, the Company issued to American Merger Consultants, Inc. 500,000 shares of
restricted common stock for services rendered in connection with the Letter of
Understanding.

Unless
otherwise noted, all of the foregoing issuances of the Company's securities were
undertaken without registration under the Securities Act of 1933, as amended
(the "Securities Act") in reliance upon the exemption contained in
Section 4(2) of the Securities Act. In each instance, the securities were
acquired for investment purposes and were subject to appropriate restrictions on
transfer.

Item 3.     Defaults Upon Senior Securities

(a)  There has been no material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any indebtedness of the small business issuer exceeding 5 percent of the total assets of the issuer.

(b)  There is no material arrearage in the payment of dividends and there has been no other material delinquency not cured within 30 days, with respect to any class of preferred stock of the registrant which is registered or which ranks prior to any class of registered securities, or with respect to any class of preferred stock of any significant subsidiary of the registrant.

Item 4.     Submission Of Matters To A Vote Of Security Holders

There were no matters submitted to a vote of security holders during the reporting period.

Item 5.     Other Information.

None, except as previously disclosed.

Item 6.     Exhibits and Reports Filed on Form 8-K

Exhibits

None.

There were no reports on Form 8-K filed during the period covered by this filing.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                    |            | Basic Technologies, Inc.                                           
|------------------- | ---------- | -------------------------------------------------------------------
|Date:  May 28, 2002 | Signature: | /s/Gary L. BrownGary L. Brown
President and Chief Executive Officer