UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ending September 30, 2001

                         Commission File Number 0-21914

                                 AGTsports, Inc.
               (Exact name of Issuer as specified in its charter)

        Colorado                                        84-1022287
(State of incorporation)                    (I.R.S. Employer Identification No.)

            7255 E. Quincy Avenue, Suite 550, Denver, Colorado 80237
               (Address of principle executive offices) (Zip Code)

                                 (303) 437-9434
                 (Issuer's telephone number including area code)

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                  Title of Class: Common Stock $.001 par value

     Check mark whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of Securities Exchange Act of 1934 during the preceding 12
months (or for such a 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 [ ]

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form and no disclosure will be
contained, to the best of the Issuer's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. [X]

     Issuer's revenues for its most recent fiscal year: $0

     The aggregate market value of the voting stock of the Issuer held by
non-affiliates as computed by reference to the prices at which the stock was
sold and the average of the bid and ask prices of such stock within the prior
sixty days as of September 30, 2001, was $391,220. A total of 48,902,589 shares
were owned by non-affiliates as of September 30, 2001.

     The number of shares of Common Stock, $.001 par value, outstanding on
September 30, 2001 was 49,848,919 shares. Transitional Small Business Disclosure
(check one): Yes ( ) No ( X )

                       Documents Incorporated by Reference
                       -----------------------------------
                                      None.

<PAGE>


Table of Contents


Part I

               Item 1.  Description of Business
               Item 2.  Description of Property
               Item 3.  Legal Proceedings
               Item 4.  Submission of Matters to a Vote of Security
                        Holders


Part II

               Item 5.  Market for Common Equity and
                        Related Stockholder Matter
               Item 6.  Management's Discussion and Analysis
                        or Plan of Operation
               Item 7.  Financial Statements
               Item 8.  Changes in and Disagreements with
                        Accountants and Financial Disclosure



Part III       Item 9.  Directors and Executive Officers, Promoters
                        and Control Persons; Compliance with Section 16(a)
                        of the Exchange Act
               Item 10. Executive Compensation
               Item 11. Security Ownership of Certain Beneficial Owners
                        and Management
               Item 12. Certain Relationships and Related Transactions
               Item 13. Exhibits and reports on Form 8-K



SIGNATURES


FINANCIAL STATEMENTS AND SCHEDULES

                                       2
<PAGE>


                                     PART I

Item 1. Description of Business.

     AGTsports, Inc. (the "Company") was first incorporated in Colorado on
January 6, 1986 as American Merger Control, an investment holding company
designed to invest in all types of assets, businesses and/or properties. From
September 30, 1991 to September 30, 1998, the Company was engaged in efforts to
develop technology products and services for golf and sports applications. The
Company was unable to successfully bring its technology products to market and
discontinued its former business plan for its technology products in fiscal
1998.

     During fiscal 1999 and fiscal 2000, and as of the date of filing of this
report, the Company has no operating business, assets or investments. The
Company has implemented a restructuring plan designed to negotiate settlement of
outstanding liabilities while exploring potential business combinations with as
yet unidentified third parties to generate new sources of revenue. The Company
can provide no assurances that management will be successful in these endeavors.
The Company continues to experience severe financial difficulties. In addition,
the auditors of the Company have raised considerable doubt as to the ability of
AGTsports, Inc. to continue as a going concern. (See "Notes to Consolidated
Financial Statements, Note 1.").

Business of the Issuer

     The Company's Articles of Incorporation, as amended, entitle it to transact
any lawful business for which corporations may be incorporated pursuant to the
Colorado Corporation Code. The Company may be considered as a "shell" company
whose sole purpose, at this time, is to search for and enter into new business
opportunities. The Company can provide no assurances when, or if, this will
occur.

     The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes that the Company will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the cost
and time required to conduct an initial public offering. Accordingly, the
Company's current purpose is to seek, investigate, and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms seeking the perceived advantages of a corporation which files
periodic reports under Section 13 and 15 of the Securities Exchange Act of 1934
(the "Exchange Act"). The Company may participate in a business venture of
virtually any kind or nature.

     The following discussion of proposed business opportunities is purposefully
general and is not meant to be restrictive of the Company's discretion to search
for and enter into potential business opportunities. Management anticipates that
it may be able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources (See "Financial
Statements"). This lack of diversification should be considered a substantial
risk to shareholders of the Company because it will not permit the Company to
offset potential losses from one venture against gains from another.

     Due to general economic conditions, rapid technological advances being made
in some industries and shortages of available capital, management believes there
are a number of firms seeking the perceived benefits of a publicly registered
corporation. Such perceived benefits may include facilitating or improving the
terms on which additional equity financing may be sought, providing liquidity
for incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all shareholders
and other factors. Potentially available business opportunities may occur in
different industries and at various stages of development, all of which will
make the task of comparative investigation and analysis of such business
opportunities extremely difficult, time-consuming and complex. In addition,
potential detriments also exist which may include the significant legal and
accounting costs incurred in connection with the acquisition of a business
opportunity and the costs of preparing forms 8-K, 10Q, or agreements and related
reports and documents. The Exchange Act specifically requires that any merger or
acquisition candidate comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the
numerous filings relevant to complying with the Exchange Act.

                                       3
<PAGE>


     The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company. In analyzing
prospective business opportunities, management will consider such matters as the
available technical, financial and managerial resources; working capital and
other financial requirements; history of operations, if any; prospects for the
future; nature of present and expected competition; the quality and experience
of management services which may be available and the depth of that management;
the potential for further research, development or exploration; specific risk
factors not now foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or expansion; the
potential for profit; the perceived public recognition or acceptance of
products, services or trades; name identification; and other relevant factors.
As part of the Company's investigation, officers and directors of the Company
will meet personally with management and key personnel of the business
opportunity, may visit and inspect material facilities, obtain independent
analysis or verification of certain information provided, check reference of
management and key personnel and take other reasonable investigation measures,
to the extent allowable in light of the Company's limited financial resources
and management expertise.

     To the extent possible, the Company intends to utilize written reports and
personal investigation to evaluate the above factors. The Company will not
acquire or merge with any company for which audited financial statements cannot
be obtained within a reasonable period of time after closing of the proposed
transaction. Management of the Company, while not especially experienced in
matters relating to the new business of the Company, shall rely upon their own
efforts and, to a much lesser extent, the efforts of the Company's shareholders,
in accomplishing the business purposes of the Company. It is anticipated that
outside consultants or advisors may be retained in the future, in addition to
the Company's legal counsel and accountants, to effectuate the business plan
described herein. In the event such consultants succeed in helping the Company
to complete a business combination, due to the Company's limited financial
resources, they will, in all likelihood, need to be paid by the prospective
merger/acquisition candidate.

     The Company will not restrict its search to any specific kind of firms, but
may acquire a venture which is in its preliminary or development stage, or which
is already in operation or which is in essentially any stage of its corporate
life. The Company may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded or may seek other
perceived advantages which the Company may offer. The Company anticipates that
the selection of a business opportunity in which to participate will be complex,
time-consuming and extremely risky. A number of risks arise in the acquisition
of any business opportunity that could materially and adversely affect the
Company and its business and operating results, including:

     o    problems integrating the acquired operations, technologies or
          products;

     o    diversion of management's time and attention from the core plan of
          business;

     o    difficulties in retaining business relationships with suppliers and
          customers of the acquired company;

     o    risks associated with entering markets in which we lack prior
          experience; and

     o    potential loss of key employees of the acquired company.

                                       4
<PAGE>


     It is anticipated that the Company will incur certain expenses in the
implementation of its business plan described herein. Recognizing the Company
has no capital with which to pay these anticipated expenses, a number of the
Company's shareholders have voluntarily offered financial assistance to the
Company in the form of loans to be utilized for working capital purposes. In
making such loans, the Company's shareholders have acknowledged that the only
opportunity for these loans to be repaid will be through a prospective merger or
acquisition, and they have agreed among themselves that the repayment of any
loans made on behalf of the Company will not impede, or be made conditional in
any manner, on consummation of a proposed transaction. Notwithstanding the
potential for such voluntary loans, there is no assurances that the Company will
have, or can obtain, sufficient funds necessary to select, investigate and
thereafter acquire an interest in a new business opportunity.

Acquisition of Opportunities

     In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell their stock in the Company. Any and all such sales will only be made in
compliance with applicable federal and state securities laws. It is anticipated
that any securities issued in any such reorganization would be issued in
reliance upon exemption from registration under applicable federal and state
securities laws. In some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of such securities
immediately after the transaction is consummated or at specified times
thereafter. If such registration occurs, of which there can be no assurance, it
will be undertaken by the surviving entity after the Company has successfully
consummated a merger or acquisition. Until such time as this occurs, the Company
will not attempt to register any additional securities. The issuance of
substantial additional securities and their potential sale into any trading
market which may develop in the Company's securities may have a depressive
effect on the value of the Company's securities in the future, if such a market
develops, of which there is no assurance.

     While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.

     With respect to any merger or acquisition, negotiations with target company
management are expected to focus on the percentage of the Company which target
company shareholders would acquire in exchange for all of their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage ownership may be subject to significant
and substantial reduction if the Company acquires a target company with
substantial assets. Any merger or acquisition effected by the Company can be
expected to have a significant and substantial dilutive effect on the percentage
of shares held by the Company's then-shareholders. The Company will, if required
by applicable law, seek shareholder approval of a proposed merger or acquisition
via a Proxy Statement. A prospective transaction can also be structured so that
it may be effectuated by the Board of Directors without shareholder approval.

                                       5
<PAGE>


     The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.

     As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the Exchange Act.
Included in these requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K to be filed
with the Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements included in
its annual report on Form 10-KSB (or 10-K, as applicable). If such audited
financial statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements of the
Exchange Act, or if the audited financial statements provided do not conform to
the representations made by the candidate to be acquired in the closing
documents, the closing documents will provide that the proposed transaction will
be voidable, at the discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision providing for
the acquisition entity to reimburse the Company for all costs associated with
the proposed transaction.

Investment Company Act of 1940

     The Company may participate in a business or opportunity by purchasing,
trading or selling the securities of such business. However, the Company does
not intend to engage primarily in such activities. Specifically, the Company
intends to conduct its activities so as to avoid being classified as an
"investment company" under the Investment Company Act of 1940 (the "Investment
Act"), and therefore avoid application of the costly and restrictive
registration and other provisions of the Investment Act and the regulations
promulgated thereunder. Section 3(a) of the Investment Act provides the
definition of an "investment company" which includes an entity that engages or
holds itself out as being engaged primarily in the business of investing,
reinvesting or trading in securities, or that engages or proposes to engage in
the business of investing, reinvesting, owning, holding or trading "investment
securities" (defined as all securities other than government securities,
securities of majority-owned subsidiaries and certain other securities) the
value of which exceeds 40% of the value of its total assets (excluding
government securities, cash or cash items). The Company intends to implement its
business plan in a manner that will result in the availability of this exception
from the definition of "investment company." Consequently, the Company's
participation in a business or opportunity through the purchase and sale of
investment securities will be limited. In order to avoid classification as an
investment company, the Company will search for, analyze and acquire or
participate in a business opportunity by use of a method that does not involve
the acquisition, ownership or holding of investment securities.

     The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates a
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, which regulation has the purported purpose of protecting
purchasers of investment company securities. Since the Company will not register
as an investment company, its shareholders will not be afforded these purported
protections. The Company intends to vigorously resist classification as an
investment company and to take advantage of any exemptions or exceptions from
application of the Investment Act. The necessity of asserting any such
resistance, or making any claim of exemption, could be time-consuming and
costly, or even prohibitive, given the Company's limited resources.

                                       6
<PAGE>


Compliance with Government Regulations

     The operations of the Company do not involve mandatory compliance with
non-environmental federal regulations other than employer-related issues such as
the 1995 Federal Family Medical Leave Act ("FMLA"). As of September 30, 2000,
the Company fully complies with the terms of this legislation as a U.S.
employer.

Research and Development Costs

     As of September 30, 2001, the Company is not engaged in material research
and development activities and has not incurred material R&D costs in the prior
three fiscal periods.

Trade Names.

     The Company does not own or utilize any trade names.

Intellectual Property.

     The Company does not own any intellectual property or patents.

Competition

     The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.

Employees

     The Company has no full time employees. The Company's President works in a
consulting capacity. The President anticipates that the business plan described
herein can be implemented by his devoting approximately 100 hours per month to
the business affairs of the Company and, consequently, conflicts of interest may
arise with respect to his limited time commitment. See Item 9, "Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
of the Exchange Act."

Management and Executive Offices of AGT

     The Company maintains an administrative office at 7255 E. Quincy Avenue,
Suite 550, Denver, Colorado 80237. Telephone: (303) 437-9434, Fax: (303)
691-8884, Email: agtoffice@aol.com (See "Item 2. Property," below.)

Forward Looking Statements

     This Form 10-KSB includes certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). All statements other than statements of historical
fact included in this Form 10-KSB, including, without limitation, the statements
under "Item I. Description of Business," "Item 3. Legal Proceedings," and "Item
6. Management's Discussion and Analysis or Plan of Operation" regarding the
Company's financial position, its acquisition strategy and approach to the
acquistion of business opportunities and other matters are forward-looking
statements. Although the Company believes that the limited expectations
reflected in such forward looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the Company's
expectations are disclosed in this Form 10-KSB in conjunction with the
forward-looking statements contained herein.

                                       7
<PAGE>


Item 2. Description of Property.

     The Company owns no significant property or assets, and maintains no
operating leases as of September 30, 2001. The Company rents an office of
approximately 1,500 square feet on a month-to-month basis at a rate of $1,600
per month. In the fiscal year 2001, the Company paid rent expenses of $19,200
for the use of this office.

Item 3. Legal Proceedings

     As of the date of filing of this report, the Company is not a party to, nor
aware of, any legal proceedings against it which, in the opinion of management,
are material to the future of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

     There were no matters submitted to a vote of the Stockholders during the
fiscal year ended September 30, 2001.


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a) MARKET INFORMATION. The Company's Common Stock trades in the
over-the-counter market, under the symbol "AGTP." The following table sets forth
the high and low bid prices for the Company's Common Stock for the periods
indicated as reported by the OTC Bulletin Board. These prices are believed to be
inter-dealer quotations and do not include retail mark-ups, mark-downs, or other
fees or commissions, and may not necessarily represent actual transactions.

           Quarter Ending                 High Bid          Low Bid
           --------------                 --------          -------

           September 30, 2001              $0.02             $.001
           June 30, 2001                    0.08              .02
           March 31, 2001                   0.11              .08
           December 31, 2000                0.02              .00
           September 30, 2000               0.02              .00
           June 30, 2000                    0.06              .02
           March 31, 2000                   0.03              .00
           December 31, 1999                0.03              .00
           September 30, 1999               0.02              .00


     (b) HOLDERS. As of January 15, 2002, the Company had 830 shareholders of
record. This does not include shareholders who hold stock in their accounts at
broker/dealers.

     (c) DIVIDENDS. The Company has never paid a cash dividend on its common
stock and does not expect to pay a cash dividend in the foreseeable future.

     (d) RECENT SALES OF UNREGISTERED SECURITIES.

     In December, 1999, the Company completed a settlement agreement with a
shareholder of the Company to cancel and retire all shares of its issued and
outstanding Series A preferred stock. Pursuant to the conversion terms of the
Company's Series A preferred shares, the Company converted 1,000,000 shares of
non-voting preferred stock on a one-for-two basis into 2,000,000 restricted
shares of the Company's voting common stock. The Company also satisfied payment
of $87,000 in accrued and unpaid preferred stock dividends by the issuance of
additional restricted common shares to the shareholder. Finally, the Company
issued to 6,850,000 restricted common shares to the same shareholder as required
under the default terms of a joint venture agreement and thereby released the
Company from further obligations thereunder. (See "Item 12 - Certain
Transactions and Related Transactions" below and "Notes to Consolidated
Financial Statements".) The subject shares were issued by the Company in
reliance upon various registration exemptions including Sections 4(2) and 4(6)
of the 1933 Act. Appropriate restrictive legends were placed on all certificates
and stop transfer instructions were issued to the transfer agent.

                                       8
<PAGE>


     During the year ended September 30, 2000, the Company issued 13,440,193
restricted shares of its common shares to 12 existing shareholders (each being
an accredited investor) and two (2) former employees in exchange for the
cancellation of outstanding indebtedness and claims. The subject shares were
issued by the Company in reliance upon a registration exemption afforded by
Sections 4(2) and/or 4(6) of the 1933 Act and the provisions of Regulation D
promulgated thereunder. Each person was provided with current information on the
Company and provided an opportunity to ask questions of management. Appropriate
restrictive legends were placed on all certificates and stop transfer
instructions were issued to the transfer agent.

     During September, 2000, the Company issued an aggregate of 1,494,395 shares
of Series 2000A Preferred Stock in exchange for the cancellation and
satisfaction of indebtedness and to eliminate, cancel and release certain
alleged "anti-dilution" rights and stock options offered to approximately 30
investors who participated in the Company's private placements of its common
stock in 1997 and 1998. As to subject shares issued to the approximately 20
non-U.S. persons, the Company relied upon a registration exemption afforded by
Regulation S promulgated under the 1933 Act. The remaining shares were issued by
the Company in reliance upon a registration exemption afforded by Sections 3(b)
and/or 4(2) of the 1933 Act and the provisions of Regulation D promulgated
thereunder. Each person was provided with current information on the Company and
provided an opportunity to ask questions of management. Appropriate restrictive
legends were placed on all certificates and stop transfer instructions were
issued to the transfer agent.


ITEM 6. Management's Discussion and Analysis of Financial Condition and plan of
        Operations

     For the fiscal year ended September 30, 2001, the Company was principally
involved in settling its delinquent indebtedness and exploring potential
business opportunities with third parties. During fiscal 2000, the Company
settled numerous delinquent accounts payable, note payable balances and
potential claims in consideration of a combination of cash payments aggregating
$33,000, the issuance of 22,294,193 restricted shares of the Company's common
stock, and 1,494,395 shares of Series 2000A preferred stock in satisfaction of
debts and claims valued at approximately $993,700, and which resulted in net
debt forgiveness of approximately $301,000.

     The Company's financial statements are presented on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. During fiscal 2001, the Company had a net
working capital deficit of ($173,668) and a shareholders deficit of ($170,419).
There is no assurance the Company will be successful in its plans developed with
the intent of remedying these conditions. These conditions raise substantial
doubt about the Company's ability to continue as a going concern. See
Independent Auditor's Report and "Notes to Financial Statements, Note 1"
included herein. The financial statements do not include any adjustments that
might result from the possible inability of the Company to continue as a going
concern.

RESULTS OF OPERATIONS

     As of September 30, 2001, the Company had no assets other than minor cash
balances and a computer. Revenues for the fiscal year 2001 were $0 as compared
to revenues of $1,650 for the fiscal year ended September 30, 2000.

                                       9
<PAGE>


     General and administrative expenses for the year ended September 30, 2001
were $33,154 as compared to $51,576 for the year ended September 30, 2000. The
decrease in general and administrative expenses was due to the elimination of
the debt settlements in the 2000 year. Interest expense decreased from $23,867
in the year ended September 30, 2000 to $664 in fiscal 2001 due to the
difference in nature of settlements reached during 2000 as compared to 2001. For
the year ended September 30, 2001, the Company recognized extraordinary income
from debt forgiveness in the amount of $610 (net of $390 in income taxes) all
due to the settlement of various debts owed by the Company.

     The Company had a net loss of $108,002 in the year ended September 30, 2001
compared to a a net loss before extraordinary income of $169,348 for the year
ended September 30, 2000. However, the Company had a net loss for the year ended
September 30, 2001 in the amount of $107,392 as compared to net increase of
$50,968 for the prior year. The 2001 net income was due principally to the
extraordinary income relating to the Company's efforts to settle outstanding
debt and liabilities which resulted in debt forgiveness income.

     In the opinion of management, the Company has not progressed significantly
in its operations over prior periods. Working capital shortages continue to
limit the Company's ability to conduct business. In the opinion of management,
the future business of the Company is dependent upon its ability to secure new
business opportunities and revenue sources to increase shareholder value. No
assurances can be provided the Company will be successful in this regard. In
addition, the auditors of the Company have raised considerable doubt as to the
ability of AGTsports, Inc. to continue as a going concern. (See "Notes to
Consolidated Financial Statements" below).

Liquidity and Capital Resources

     There was no significant change in the Company's deficit working capital
during fiscal year 2001 over $110,000 change as the Company continued
restructuring with the objective of pursuing new business opportunities. Cash
and cash equivalent's balance on September 30, 2001 was $1,024. Current assets
were $1,024 and current liabilities were $174,592. At September 30, 2001, the
Company has no underlying business or investments and continues to experience
severe working capital shortages. For the fiscal year ending September 30, 2001,
the Company had total expenses of $108,002 but had net loss of $107,392 as a
result of extraordinary income in the amount of approximately $610. This net
income was attributed to debt forgiveness arising in connection with the
restructuring of the Company. At September 30, 2001, the Company has working
capital deficiency of $(173,668) and a stockholders deficit of $(170,419). In
the opinion of management, the Company continues to experience lack of adequate
funding to fully pursue its business plan. Given the severe working capital
problems of AGTsports, Inc., the auditors of the Company have raised significant
doubts as to the ability of AGTsports, Inc. to continue as a going concern. (See
"Notes to Consolidated Financial Statements" below).

Material Commitments for Capital Expenditures

     As of September 30, 2001, the Company has no material commitments for
capital expenditures.

Unfavorable Trends or Uncertainties

     The business of the Company is not subject to unfavorable trends or
uncertainties other than the potential significant decline the health of the
U.S. economy and/or a significant rise or decline in interest rates and the U.S.
trading markets. The Company can make no determination as to the effect of these
factors on operations or the probability such factors will occur.

Seasonal Aspects Bearing Upon Operations

     The Company is not subject to seasonal fluctuations in its business cycle
which have a material impact on operations.

                                       10
<PAGE>


ITEM 7. FINANCIAL STATEMENTS.

     The Consolidated Financial Statements of the Company are attached as
follows:

                                                                           Page
                                                                           ----
     Independent Auditor's Report .......................................   F-1

     Balance Sheets - September 30, 2001 and 2000 .......................   F-2

     Statements of Operations for the Years Ended
     September 30, 2001 and 2000 ........................................   F-3

     Statements of Changes in Stockholders' Equity
     for the Years Ended September 30, 2001 and 2000 ....................   F-5

     Statements of Cash Flows for the Years Ended
     September 30, 2001 and 2000 ........................................   F-14

     Notes to the Financial Statements - September 30,
     2001 and 2000 ......................................................   F-17


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

     None.

                                    Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons.

Information with respect to the executive officers and directors of the Company
is set forth below:

Name                         Age           Company Positions and Offices
----                         ---           -----------------------------

Cory J. Coppage              38            President, Treasurer, Corporate
                                           Secretary, Director

Louis F. Coppage             64            Director


Business Experience of EXECUTIVE Officers and Directors

     Cory J. Coppage, President, Treasurer, Secretary and Director. Mr. Coppage,
38, first joined the Company as secretary in 1996 and became president in 1998.
During the period from 1998 to 2001, he was responsible for reducing corporate
liabilities in excess of $900,000, while re-positioning the Company for merger
and acquisition opportunities in fiscal 2002. He has over eleven years of
business management experience working with various public and private
companies. From 1999 to 2001, he was secretary and director of SAN Holdings,
Inc. "SANZ" (formerly Citadel Environmental Group, Inc.), a publicly traded data
storage technology services business based in Castle Rock, CO with sales in
excess of $18,000,000. In 2000 and 2001, he was an officer and consultant to
TangibleData, Inc., a publicly held digital content publishing and distribution
business based in Boulder, CO. From 1994 to 1998, he was secretary and a member
of the board of directors of American Consolidated Growth Corporation, a public
investment company and owner of staffing operations with annual revenues in
excess of $11,000,000, based in Denver, CO. From 1989 to 1994 he was a licensed
property & casualty insurance agent and field manager for Liability Insurance
Operations Network, Inc., and W.J. Plemons Insurance Agency of Atlanta, GA. Mr.
Coppage has expertise in the areas of business administration, investor
relations and early stage development of public companies. He holds a bachelors
of science degree in business administration from Regis University (1985),
Denver, Colorado.

                                       11
<PAGE>


     Louis F. Coppage, Director. Mr. Coppage, 64, was appointed to the board of
directors of the Company in 1996. He has over twenty years of executive and
managerial experience with domestic and international operations involving
finance and business development in the private and public sectors. From 1997 to
2000, he served as president and director of Citadel Environmental Group, Inc.,
a Colorado corporation. In 2000, he served as chairman of SAN Holdings, Inc., a
data storage technology services business based in Castle Rock, CO. From 1986 to
present, Mr. Coppage has served as a financial consultant for numerous clients
in real estate, energy, insurance, and investments. He has provided advisory
services with an emphasis on the capital formation process for corporate clients
including SyberSay Communications, a wireless appliance business in Walnut
Creek, CA, and Alliance Medical Corporation, a medical instrument recycling
business in Phoenix, AZ. From 1978 to 1986, Mr. Coppage was founder and
principal of American Energy Investments, Inc., of Denver, CO. From 1969 to 1979
he was president of Foresee, Ltd., an energy development company, and of Coppage
& Associates, a financial planning company in Denver, CO. Mr. Coppage studied
business at the University of Maryland and Emporia State College before
beginning his career at Connecticut General Life Insurance Company (1964), where
he was recognized for his achievements in publications such as Time, Newsweek
and U.S. World Report. He was a founding member of the insurance and financial
planning groups, Top of the Table and The Forum.


Compliance with Section 16(a) of the Securities Exchange Act of 1934.

     Section 16(a) of the Securities Exchange Act requires the Company's
officers and directors and shareholders of more than ten percent of the
Company's capital stock to file reports of ownership and change in ownership
with the Securities and Exchange Commission (SEC) and the National Association
of Securities Dealers, Inc. Officers, directors and greater-than-ten-percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) reports they may file from time to time.

     Based solely upon a review of the copies of ownership reports submitted to
it, the Company believes that, for the fiscal year ended September 30, 2001,
Cory Coppage and Louis Coppage, as officers and directors of the Company, filed
ownership change reports, but such reports were filed late.


Item 10. Executive Compensation

     The following table sets forth information regarding the executive
compensation for the Company's President and each other executive officer whose
total annual salary and bonus exceeded $100,000 for the years ended September
30, 2001 and 2000:

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                                                       LONG-TERM COMPENSATION
                                                 ---------------------------------
                          ANNUAL COMPENSATION          AWARDS       PAYOUTS
                         ----------------------  -----------------  -------
                                                         SECURITIES
                                                          UNDERLY-
                                         OTHER     RE-      ING               ALL
                                         ANNUAL  STRICTED OPTIONS/           OTHER
NAME AND PRINCIPAL                       COMPEN-  STOCK     SARs     LTIP    COMPEN-
     POSITION      YEAR  SALARY   BONUS  SATION  AWARD(S) (NUMBER)  PAYOUTS  SATION
------------------ ----  -------  -----  ------  -------- --------  -------  ------
<S>                <C>   <C>      <C>    <C>     <C>      <C>       <C>      <C>
Cory J. Coppage,   2001  $60,000    0      --     22,500     --        --      --
President          2000  $60,000    0      --     22,500     --        --      --

</TABLE>
                                       12
<PAGE>


     On October 1, 2001, the Company renewed a 1999 Consulting Agreement with
Cory J. Coppage, the acting President, for business development and
administrative services. The agreement expires on September 30, 2002 and
provides consulting fees of $5,000 per month and a one time stock grant. On
September 30, 2000, the Company issued 225,000 Series 2000A preferred shares to
Mr. Coppage, with such shares having a liquidation value of $0.10 per share or
$22,500. Expenses of $6,750 were reimbursed with accrued fees and expenses of
$117,699_ at September 30, 2001. During fiscal 2000, the Company recognized
$60,000 in compensation expense.

     The Company accrued $60,000 in compensation to the executive officers as a
group for services rendered to the Company in all capacities during the fiscal
year 2000. No one executive officer received, or has accrued for his benefit, in
excess of $60,000 for the year. No cash bonuses were or are to be paid to such
persons. There are currently no options outstanding under any of the Company's
employee incentive stock option plans and no options were granted during the
2000 fiscal year. There are no plans pursuant to which cash or non-cash
compensation was paid or distributed during the last fiscal year, or is proposed
to be paid or distributed in the future, to the executive officers of the
Company. No other compensation not described above was paid or distributed
during the last fiscal year to the executive officers of the Company. There are
no compensatory plans or arrangements, with respect to any executive officer of
the Company, which would result from the resignation, retirement or any other
termination of such individual's employment with the Company or from a change in
control of the Company or a change in the individual's responsibilities
following a change in control.

Director Compensation

     Employee directors do not receive any additional compensation for Board or
committee service. Non-employee directors are not compensated for each Board
meeting they attend, other than for the reimbursement of expenses.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth information regarding the ownership of
shares of the Company's common stock by (i) each person known by the Company to
own 5 % or more of such class of equity securities, (ii) each officer and
director of the Company, and by (iii) all executive officers and directors as a
group.

Name and Address of                   Amount and Nature of     Percent of Class
Beneficial Owner                           Ownership
--------------------------------------------------------------------------------

Cory J. Coppage                              926,164                 1.9%
7255 E. Quincy Ave, Suite 550
Denver, CO  80237

Louis F. Coppage                              20,166                  .--
7350 N. Broadway, Suite 111
Denver, CO 80221

NyCon Resources                           12,015,728                24.1%
12345 W. Alameda Parkway
Lakewood, CO 80220

All Directors and Officers as a Group        946,330                 1.9%


                                       13
<PAGE>


     In addition to the ownership of the Company's common stock as set forth
above, the following table sets forth information regarding the ownership of the
Company's Series 2000A preferred stock by (i) each person known by the Company
to own 5 % or more of this class of securities, (ii) each officer and director
of the Company, and by (iii) all executive officers and directors as a group.

Name and Address of                    Amount and Nature of     Percent of Class
Beneficial Owner                           Ownership (1)
--------------------------------------------------------------------------------

Cory J. Coppage                               245,204                16.4 %
7255 E. Quincy Ave, Suite 550
Denver, CO  80237

NyCon Resources                               307,260                20.5%
12345 W. Alameda Parkway
Lakewood, CO 80220

Frank and Angela Barchella                    100,000                 6.7%
4312 Woodman Avenue
3rd Floor
Sherman Oaks, CA 91423

Randall Toig                                  107,670                 7.2%
680 Lakeshore Drive
Suite 830
Chicago, IL 60611

Arthur V. Adams Trust dtd 1997                100,870                 6.7%
3170 W. Sahara Avenue
Suite D-11
Las Vegas, NV 89102

Steve Moore                                   104,650                 7.0%
56312 Dearborn
Spokane, WA 99223

All Directors and Officers as a Group         245,204                16.4%



     (1)  Includes all Series A and Series 2000A preferred shares issued and
          outstanding. At September 30, 2001, there are 1,500,000 Series A
          preferred shares authorized, of which none are issued and outstanding,
          and 1,500,000 Series 2000A preferred shares authorized and 1,498,395
          are issued and outstanding. Each share of the Company's Series 2000A
          preferred stock is automatically converted into one share of common
          stock at the earlier of (a) the closing of a firm commitment
          underwritten public offering pursuant to an effective registration
          statement, covering the offer and sale of shares of the Company's
          common stock to the public with net proceeds to the Company of not
          less than $2 million, or (b) the consent of the holders of at least 66
          2/3% of all outstanding shares of the Preferred Stock. (See "Notes to
          Consolidated Financial Statements, Note 4" below).


     All ownership is beneficial and of record except as specifically indicated
otherwise. Beneficial owners listed above have sole voting and investment power
with respect to the shares shown unless otherwise indicated. Economic interest
is calculated by including shares directly owned and, in the case of individuals
and all directors and executive officers as a group, shares such individuals or
group are entitled to receive upon exercise of outstanding options exercisable
within 60 days of September 30, 2000. Beneficial ownership is calculated in
accordance with Section 13(d) of the Exchange Act and the rules promulgated
thereunder.

                                       14
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Except as noted below, there were no transactions exceeding $60,000 during
the last two years, or proposed transactions, in which the Company was, or is to
be a party, in which an officer, director, 5% of more shareholder or any
immediate family member thereof, had or is to have a direct or indirect material
interest.

     In December, 1999, the Company converted 1,000,000 shares of non-voting
Series A convertible preferred stock held by NyCon Reources, a principal
shareholder, into 2,000,000 restricted shares of the Company's voting common
stock. In addition, the Company issued 2,695,203 restricted shares of its common
stock to NyCon Resources as payment for minor interest and debt and $87,000 in
accrued dividends of its Series A preferred stock.

     During fiscal 1999, the Company received notice that NyCon Resources had
been assigned the interest of Global Links Trading, Ltd. in connection with a
1997 joint venture agreement between the Company and Global Links Trading, Ltd.
In December, 1999, pursuant to the terms of the joint venture agreement, the
Company issued to NyCon Resources 6,850,000 shares of its common stock as
required under the default terms of the joint venture agreement. Effective
December 16, 1999, the joint venture was cancelled thereby releasing the Company
from any further obligations thereunder.

     In December, 1999, the Company issued 500,000 restricted common shares to a
former employee as consideration for canceling unissued stock options granted
under a 1997 employment agreement. The employment agreement provided for
1,000,000 stock options to be issued annually over a five-year term, with
incentive options to purchase up to $100,000 of common stock at the closing bid
price on the date of exercise expiring in 2002 See "Notes to Consolidated
Financial Statements, Note 5" below

     In June, 2000, the Company settled a claim for disputed wages and expenses
of $14,615 with the former president of the Company by issuing 325,000
restricted common shares to him. Pursuant to the settlement agreement, the
Company canceled unissued stock options granted under a 1997 employment
agreement which were accrued in the fiscal years 1999 and 1998. See "Notes to
Consolidated Financial Statements, Note 5" below.


                                     PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K
------------------------------------------------------------------------

(a)(1) and (a)(2) List of Financial Statements and Schedules (a)(3) List of
Exhibits (in accordance with Item 601 of Regulation S-B).

Exhibit Number        Description of Exhibit
--------------        ----------------------

 3.1                  Articles of Incorporation of the Company*
 3.2                  Bylaws of the Company**
27                    Financial Data Schedule

*    (Incorporated by reference to the Company's Form S-18 Registration
     Statement of American Merger Control, Inc. filed with the Commission in
     1986 and to the Form 10-K for the fiscal year ended September 30, 1992
     filed with the Commission on or about March 10, 1993.)

**   Previously filed under cover of Form 10-SB, filed June 15, 1993, SEC File
     No. 0-21914

See Exhibit 3.3 below.

                                       15
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                           September 30, 2001 and 2000
                                Denver, Colorado



                    Audited Consolidated Financial Statements
                       At September 30, 2001 and 2000 and
                 for the Years then Ended and for the Cumulative
          Period from January 6, 1986 (inception) to September 30, 2001


                  (Together with Independent Auditors' Report)


                                    CONTENTS




INDEPENDENT AUDITORS' REPORT                                             F-1

FINANCIAL STATEMENTS
   CONSOLIDATED BALANCE SHEETS                                           F-2

   CONSOLIDATED STATEMENTS OF OPERATIONS                              F-3 - F-4

   CONSOLIDATED STATEMENTS OF CHANGES IN
     SHAREHOLDERS' EQUITY (DEFICIT)                                  F-5 - F-13

   CONSOLIDATED STATEMENTS OF CASH FLOWS                            F-14 - F-16

   NOTES TO FINANCIAL STATEMENTS                                    F-17 - F-24


<PAGE>




                          Independent Auditors' Report



The Board of Directors
AGTsports, Inc.
Denver Colorado

We have audited the accompanying consolidated balance sheets of AGTsports, Inc.
(a development stage company) (the "Company") at September 30, 2001 and 2000,
and the related consolidated statements of operations, changes in shareholders'
equity (deficit), and cash flows for the years then ended and the fiscal 2001
and 2000 amounts included in the cumulative amounts from January 6, 1986
(inception) to September 30, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
of the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the September 30, 2001 and 2000 consolidated financial
statements referred to above present fairly, in all material respects, the
financial position, consolidated results of operations and cash flows for the
years then ended and the cumulative amounts from January 6, 1986 (inception) to
September 30, 2001.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has sustained recurring losses
from operations and has a shareholders' deficit and a working capital deficit
which all raise substantial doubt about its ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


                                                /s/ BRIMMER, BUREK & KEELAN LLP
                                                -------------------------------
                                                BRIMMER, BUREK & KEELAN LLP


                                                Certified Public Accountants

January 12, 2002


                                      F-1
<PAGE>
<TABLE>
<CAPTION>

                                 AGTsports, Inc.
                          (A Development Stage Company)
                                 Balance Sheets
                               September 30, 2001


                                     ASSETS
                                                         2001            2000
                                                     ------------    ------------
<S>                                                  <C>             <C>
Current:

Cash                                                 $      1,024    $     16,547
                                                     ------------    ------------

Total current assets                                        1,024          16,547

Property and Equipment, Net                                 3,249           1,000
                                                     ------------    ------------

Total assets                                         $      4,273    $     17,547
                                                     ============    ============



                      LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:

Accounts payable                                     $     20,297    $     12,455
Accrued expenses(approximately 100 paid to related
  parties in 2001 and 2000 respectively)                  145,227          64,804
Notes payable - current                                     9,168           2,455
                                                     ------------    ------------

Total current liabilities                                 174,692          79,714

Notes payable (less current portion)                         --              --
                                                     ------------    ------------

Total liabilities                                         174,692          79,714

Shareholders' deficit:
  Convertible Preferred stock, $.001 par value;
    1,500,000 shares authorized; 1,498,395
    shares issued and outstanding (Note 5)                  1,498           1,494
  Convertible Preferred stock, $1.00 par value;
    5,000,000 shares authorized; 1,000,000
    shares issued and outstanding (Note 5)                   --              --
  Common stock, $.001 par value; 50,000,000
    shares authorized; 49,848,919 shares issued
    and outstanding                                        49,845          49,845
Treasury stock                                               --              --
Additional paid-in capital                             24,084,827      24,085,691
Deficit accumulated during the development stage      (24,306,589)    (24,199,197)
                                                     ------------    ------------

Total shareholders' deficit                              (170,419)        (62,167)
                                                     ------------    ------------

Total liabilities and shareholders' deficit          $      4,273    $     17,547
                                                     ============    ============


Please read accompanying notes.

                                      F-2
<PAGE>

                                            AGTsports, Inc.
                                     (A Development Stage Company)
                                 Consolidated Statements of Operations

                                                        Years Ended September 30,    January 6, 1986
                                                       ----------------------------(Inception) Through
                                                           2001            2000     September 30, 2001
                                                       ------------    ------------ ------------------

Revenue:
  Territory sales                                      $       --      $       --      $  1,612,009
  Other revenue                                                --             1,650       2,294,425
                                                       ------------    ------------    ------------
                                                               --             1,650       3,906,434
                                                       ------------    ------------    ------------
Expenses:
  Cost of purchased goods for resale                           --              --           162,378
  Salaries and director compensation                          1,008           1,000       3,421,109
  Professional services(approximately 83% paid to
    related parties in 2001 and 2000)                        72,540         100,988       4,159,612
  General and administrative                                 33,154          51,576       3,504,862
  Depreciation and amortization                                 862             200       2,487,665
  Advertising                                                  --              --           306,112
  Contract services                                            --              --         4,985,397
  Cost of unsuccessful offering                                --              --            56,860
  Travel and entertainment                                      164           2,781         919,101
  Territory reacquisition                                      --              --         1,465,075
                                                       ------------    ------------    ------------
      Total expenses                                        107,728         156,545      21,468,171
                                                       ------------    ------------    ------------

Preoperative loss                                          (107,728)       (154,895)    (17,561,737)

Other income (expenses):
  Interest income                                              --              --             1,081
  Rent income                                                  --              --            14,992
  Interest expense                                             (664)        (23,867)       (711,039)
  Loss on equity securities                                    --              --        (8,652,613)
  (Loss) gain on disposal of assets                            --              --         2,814,846
  Provision for loan loss                                      --              --          (528,342)
  Equity in loss of joint venture                              --              --          (748,650)
  Loss on purchase of subsidiaries                             --              --          (442,419)
  Settlement of claims                                         --           (71,398)        (71,398)
  Other income                                                 --              --            84,565
                                                       ------------    ------------    ------------
      Total other income (expenses), net                       (664)        (95,265)     (8,238,977)
                                                       ------------    ------------    ------------

Net loss before extraordinary items and
  provision for income taxes                               (108,392)       (250,160)    (25,800,714)

Provision for income taxes                                     (390)        (80,812)      1,711,801
                                                       ------------    ------------    ------------
Loss before extraordinary items                            (108,002)       (169,348)    (27,512,515)

Extraordinary items:
  Income tax benefit realized                                  --            19,878       1,812,911
  Debt forgiveness (net of $390 and $100,690 in
    income taxes)                                               610         200,438       1,163,709
  Debt forgiveness - AGTsports Australia Pty Ltd.              --              --           339,155
                                                       ------------    ------------    ------------

Net income (loss)                                      $   (107,372)   $     50,968    $(24,196,130)
                                                       ============    ============    ============


See accompanying notes to financial statements.

                                                 F-3
<PAGE>


                                      AGTsports, Inc.
                               (A Development Stage Company)
                           Consolidated Statements of Operations



                                                            Years Ended September 30,
                                                        ----------------------------------
                                                             2001               2000
                                                        ---------------    ---------------

Basic earnings per share
  Loss per common share before extraordinary items            $ (0.002)          $ (0.004)
  Extraordinary items per common share                               -              0.006
                                                        ---------------    ---------------
  Net income (loss) per common share                          $ (0.002)           $ 0.002
                                                        ===============    ===============

  Weighted-average shares of common stock outstanding       49,848,919         39,288,360
                                                        ===============    ===============

Fully diluted earnings per share
  Loss per common share before extraordinary items            $ (0.002)          $ (0.004)
  Extraordinary items per common share                               -              0.005
                                                        ---------------    ---------------
  Net income (loss) per common share                          $ (0.002)           $ 0.001
                                                        ===============    ===============

  Weighted-average shares of common stock outstanding       49,848,919         41,335,621
                                                        ===============    ===============


See accompanying notes to consolidated financial statements.

                                            F-4
<PAGE>

                                              AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit)

                                            Preferred Stock            Preferred Stock
                                           $1.00 par value            $.001 par value
                                         Number        Amount       Number        Amount
                                         ------        ------       ------        ------

Balance at January 6, 1986                    --     $     --           --      $     --

Balance at January 21, 1986                   --           --           --            --

   Common stock issued for cash               --           --           --            --
   Offering costs                             --           --           --            --

   Net loss                                   --           --           --            --
                                       ----------    ----------   ----------    ----------
Balance at September 30, 1986                 --           --           --            --
                                       ----------    ----------   ----------    ----------
   Net loss                                   --           --           --            --
                                       ----------    ----------   ----------    ----------
Balance at September 30, 1987                 --           --           --            --
                                       ----------    ----------   ----------    ----------
   Net loss                                   --           --           --            --
                                       ----------    ----------   ----------    ----------
Balance at September 30, 1988                 --           --           --            --
                                       ----------    ----------   ----------    ----------
   Common stock issued to acquire
   subsidiaries                               --           --           --            --

   Shares purchased by subsidiary             --           --           --            --
                                       ----------    ----------   ----------    ----------
Balance at September 30, 1989                 --           --           --            --
                                       ----------    ----------   ----------    ----------
   Common stock issued for services           --           --           --            --

   Common stock issued pursuant to
   debenture agreement                        --           --           --            --

   Common stock issued for
   investment in joint venture                --           --           --            --

                                                                                             Accumulated   Memorandum
                                               Common Stock        Additional                 During the      Total
                                             $.001 par value        Paid-In      Treasury    Development   Shareholders'
                                           Number       Amount      Capital        Stock        Stage    Equity (Deficit)
                                           ------       ------      -------        -----        -----    ----------------

Balance at January 6, 1986                    --     $     --     $     --      $     --     $     --      $     --

Balance at January 21, 1986                 30,000           30        5,970          --           --           6,000

   Common stock issued for cash             90,000           90      149,910          --           --         150,000
   Offering costs                             --           --         (7,257)         --           --          (7,257)

   Net loss                                   --           --           --            --         (5,247)       (5,247)
                                        ----------   ----------    ----------   ----------    ----------    ----------
Balance at September 30, 1986              120,000          120       148,623         --          (5,247)      143,496
                                        ----------   ----------    ----------   ----------    ----------    ----------
   Net loss                                   --           --           --            --         (44,583)      (44,583)
                                        ----------   ----------    ----------   ----------    ----------    ----------
Balance at September 30, 1987              120,000          120       148,623         --         (49,830)       98,913
                                        ----------   ----------    ----------   ----------    ----------    ----------
   Net loss                                   --           --           --            --         (98,913)      (98,913)
                                        ----------   ----------    ----------   ----------    ----------    ----------
Balance at September 30, 1988              120,000          120       148,623         --        (148,743)         --
                                        ----------   ----------    ----------   ----------    ----------    ----------
   Common stock issued to acquire
   subsidiaries                             99,943          100     5,534,840         --          (8,824)    5,526,116

   Shares purchased by subsidiary             --           --           --         (25,112)         --         (25,112)
                                        ----------   ----------    ----------   ----------    ----------    ----------
Balance at September 30, 1989              219,943          220     5,683,463      (25,112)     (157,567)    5,501,004
                                        ----------   ----------    ----------   ----------    ----------    ----------
   Common stock issued for services         14,801           15       167,231         --            --         167,246

   Common stock issued pursuant to
   debenture agreement                      60,000           60       649,940         --            --         650,000

   Common stock issued for
   investment in joint venture              34,500           35       381,815         --            --         381,850


                                                    F-5
<PAGE>

                                            AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Continued)

                                            Preferred Stock            Preferred Stock
                                           $1.00 par value            $.001 par value
                                         Number        Amount       Number        Amount
                                         ------        ------       ------        ------
   Common stock issued for
   professional services                  --              --           --            --

   Common stock issued to settle
   litigation                             --              --           --            --

   Treasury stock activity                --              --           --            --

   Net loss                               --              --           --            --
                                       -------         -------       ------        ------
Balance at September 30, 1990             --              --           --            --
                                       -------         -------       ------        ------
   Common stock issued to settle
   litigation                             --              --           --            --

   Common stock issued to acquire
   intangible assets                      --              --           --            --

   Distribution declared pursuant to
   January 28, 1991 contract              --              --           --            --

   Net income                             --              --           --            --
                                       -------         -------       ------        ------
Balance at September 30, 1991             --              --           --            --
                                       -------         -------       ------        ------
   Common stock issued for cash           --              --           --            --

   Common stock issued for services       --              --           --            --

   Common stock issued to acquire
   intangible assets                      --              --           --            --

   Common stock issued through
   private placement                      --              --           --            --

                                                                                              Accumulated    Memorandum
                                              Common Stock         Additional                 During the       Total
                                            $.001 par value         Paid-In       Treasury    Development    Shareholders'
                                           Number       Amount      Capital        Stock        Stage      Equity (Deficit)
                                           ------       ------      -------        -----        -----      ----------------
   Common Stock issued for
   professional services                   60,000           60       649,940          --           --         650,000

   Common stock issued to settle
   litigation                               4,055            3        44,735          --           --          44,738

   Treasury stock activity                   --           --            --          25,112         --          25,112


   Net loss                                  --           --            --            --     (5,783,853)   (5,783,853)
                                       ----------   ----------    ----------    ----------   ----------    ----------
Balance at September 30, 1990             393,299          393     7,577,124          --     (5,941,420)    1,636,097
                                       ----------   ----------    ----------    ----------   ----------    ----------
   Common stock issued to settle
   litigation                               3,000            3        39,147          --           --          39,150

   Common stock issued to acquire
   intangible assets                    1,585,194        1,585     2,376,206          --           --       2,377,791

   Distribution declared pursuant to
   January 28, 1991 contcact                 --           --      (6,142,907)         --           --      (6,142,907)

   Net income                                --           --            --            --      4,545,160     4,545,160
                                       ----------   ----------    ----------    ----------   ----------    ----------
Balance at September 30, 1991           1,981,493        1,981     3,849,570          --     (1,396,260)    2,455,291
                                       ----------   ----------    ----------    ----------   ----------    ----------
   Common stock issued for cash           200,000          200       199,800          --           --         200,000

   Common stock issued for services       447,250          447       590,303          --           --         590,750

   Common stock issued to acquire
   intangible assets                      330,000          330       329,670          --           --         330,000

   Common stock issued through
   private placement                       42,750           43        85,457          --           --          85,500


                                                  F-6
<PAGE>
                                            AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Continued)

                                                 Preferred Stock            Preferred Stock
                                                 $1.00 par value            $.001 par value
                                              Number        Amount       Number        Amount
                                              ------        ------       ------        ------

   Net loss                                       --            --            --            --
                                           -----------   -----------   -----------   -----------
Balance at September 30, 1992                     --            --            --            --
                                           -----------   -----------   -----------   -----------
   Common stock issued for cash                   --            --            --            --

   Common stock issued for services               --            --            --            --

   Common stock issued to settle
   litigation                                     --            --            --            --

   Common stock issued to former
   BBBC stockholder                               --            --            --            --

   Common stock issued to acquire
   assets                                         --            --            --            --

   Preferred stock issued to treasury        1,000,000     4,000,000          --            --

   Cancellation of distribution declared          --            --            --            --

   Net loss                                       --            --            --            --
                                           -----------   -----------   -----------   -----------
Balance at September 30, 1993                1,000,000     4,000,000          --            --
                                           -----------   -----------   -----------   -----------
   Common stock issued for cash                   --            --            --            --

   Common stock issued for services               --            --            --            --

   Common stock issued to settle
   obligations                                    --            --            --            --

   Common stock issued to acquire
   software                                       --            --            --            --

                                                                                                      Accumulated    Memorandum
                                                 Common Stock            Additional                   During the       Total
                                                $.001 par value           Paid-In      Treasury      Development    Shareholders'
                                              Number        Amount        Capital        Stock          Stage      Equity (Deficit)
                                              ------        ------        -------        -----          -----      ----------------

   Net loss                                       --            --            --             --       (1,267,987)    (1,267,987)
                                           -----------   -----------    -----------    -----------    -----------    -----------
Balance at September 30, 1992                3,001,493         3,001      5,054,800           --       (2,664,247)     2,393,554
                                           -----------   -----------    -----------    -----------    -----------    -----------
   Common stock issued for cash                263,000           263        516,737           --             --          517,000

   Common stock issued for services            166,916           167        277,097           --             --          277,264

   Common stock issued to settle
   litigation                                   76,379            77        106,836           --             --          106,913

   Common stock issued to former
   BBBC stockholder                            161,401           161           (161)          --             --             --

   Common stock issued to acquire
   assets                                      200,000           200        199,800           --             --          200,000

   Preferred stock issued to treasury             --            --             --       (4,000,000)          --             --

   Cancellation of distribution declared          --            --        6,142,907           --             --        6,142,907

   Net loss                                       --            --             --             --       (7,620,061)    (7,620,061)
                                           -----------   -----------    -----------    -----------    -----------    -----------
Balance at September 30, 1993                3,869,189          3,869    12,298,016     (4,000,000)   (10,284,308)     2,017,577
                                           -----------   -----------    -----------    -----------    -----------    -----------
   Common stock issued for cash                 80,871            81        153,620           --             --          153,701

   Common stock issued for services            907,237           907      1,901,355           --             --        1,902,262

   Common stock issued to settle
   obligations                                 305,827           306        522,139           --             --          522,445

   Common stock issued to acquire
   software                                     33,000            33         58,955           --             --           58,988


                                                    F-7
<PAGE>

                                            AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Continued)

                                             Preferred Stock              Preferred Stock
                                             $1.00 par value              $.001 par value
                                          Number        Amount          Number        Amount
                                          ------        ------          ------        ------

   Treasury stock activity                    --             --             --            --

   Net loss                                   --             --             --            --
                                       -----------    -----------    -----------   -----------
Balance at September 30, 1994            1,000,000      4,000,000           --            --
                                       -----------    -----------    -----------   -----------
   Common stock issued for cash               --             --             --            --

   Common stock issued for services           --             --             --            --

   Common stock issued for debt
   settlement with employees                  --             --             --            --

   Common stock issued for debt
   and obligation settlement                  --             --             --            --

   Common stock issued for territory
   acquisition                                --             --             --            --

   Common stock issued for VAST
   joint venture                              --             --             --            --

   Return of preferred shares per
   AMGC settlement                      (1,000,000)    (4,000,000)          --            --

   Treasury stock activity                    --             --             --            --

   Net loss                                   --             --             --            --
                                       -----------    -----------    -----------   -----------
Balance at September 30, 1995                 --             --             --            --
                                       -----------    -----------    -----------   -----------
   Other                                      --             --             --            --

   Common stock issued for cash               --             --             --            --

                                                                                                     Accumulated    Memorandum
                                           Common Stock            Additional                        During the       Total
                                          $.001 par value           Paid-In           Treasury      Development    Shareholders'
                                        Number        Amount        Capital             Stock          Stage      Equity (Deficit)
                                        ------        ------        -------             -----          -----      ----------------

   Treasury stock activity                    --             --             --           (6,860)          --           (6,860)

   Net loss                                   --             --             --             --       (3,783,365)    (3,783,365)
                                       -----------    -----------    -----------    -----------    -----------    -----------
Balance at September 30, 1994            5,196,124          5,196     14,934,085     (4,006,860)   (14,067,673)       864,748
                                       -----------    -----------    -----------    -----------    -----------    -----------
   Common stock issued for cash          1,122,200          1,122        596,078           --             --          597,200

   Common stock issued for services      1,539,875          1,540      1,396,402           --             --        1,397,942

   Common stock issued for debt
   settlement with employees             2,186,023          2,186      1,167,322           --             --        1,169,508

   Common stock issued for debt
   and obligation settlement               310,750            311        168,060           --             --          168,371

   Common stock issued for territory
   acquisition                             225,000            225        129,850           --             --          130,075

   Common stock issued for VAST
   joint venture                           700,000            700        867,300           --             --          868,000

   Return of preferred shares per
   AMGC settlement                            --             --             --             --             --       (4,000,000)

   Treasury stock activity                (749,000)          (749)    (3,999,251)     3,990,140           --           (9,860)

   Net loss                                   --             --             --             --       (5,216,415)    (5,216,415)
                                       -----------    -----------    -----------    -----------    -----------    -----------
Balance at September 30, 1995           10,530,972         10,531     15,259,846        (16,720)   (19,284,088)    (4,030,431)
                                       -----------    -----------    -----------    -----------    -----------    -----------
   Other                                      --             --           56,250           --             --           56,250

   Common stock issued for cash          2,599,855          2,600        609,650           --             --          612,250


                                                    F-8
<PAGE>
                                             AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Continued)

                                             Preferred Stock              Preferred Stock
                                             $1.00 par value              $.001 par value
                                          Number        Amount          Number        Amount
                                          ------        ------          ------        ------

   Common stock issued for services            --            --            --            --

   Common stock issued to Global
   Links, Ltd. in October 1995
   pursuant to prior settlement with
   AMGC                                        --            --            --            --

   Common stock issued for debt
   obligation settlement                       --            --            --            --

   Common stock issued for debt
   settlement with employees                   --            --            --            --

   Net loss                                    --            --            --            --
                                        -----------   -----------   -----------   -----------
Balance at September 30, 1996                  --            --            --            --
                                        -----------   -----------   -----------   -----------
   Common stock issued for cash                --            --            --            --

   Common stock issued in
   connection with the exercise of
   stock options                               --            --            --            --

   Commissions paid in common
   stock in connection with common
   stock sales                                 --            --            --            --

   Common stock returned to
   Company in connection with
   settlement of VAST joint venture            --            --            --            --

   Preferred stock issued for
   settlement of notes payable and in
   exchange for common stock              1,000,000     1,000,000          --            --

                                                                                                        Accumulated    Memorandum
                                              Common Stock            Additional                        During the       Total
                                             $.001 par value           Paid-In           Treasury      Development    Shareholders'
                                           Number        Amount        Capital             Stock          Stage     Equity (Deficit)
                                           ------        ------        -------             -----          -----     ----------------


   Common stock issued for services      1,824,102          1,824        963,285           --             --          965,109

   Common stock issued to Global
   Links, Ltd. in October 1995
   pursuant to prior settlement with
   AMGC                                   7,850,000          7,850      3,180,439           --             --        3,188,289

   Common stock issued for debt
   obligation settlement                    104,966            105        103,485           --             --          103,590

   Common stock issued for debt
   settlement with employees              1,020,701          1,021        742,505           --             --          743,526

   Net loss                                    --             --             --             --       (3,776,475)    (3,776,475)
                                        -----------    -----------    -----------    -----------    -----------    -----------
Balance at September 30, 1996            23,930,596         23,931     20,915,460        (16,720)   (23,060,563)    (2,137,892)
                                        -----------    -----------    -----------    -----------    -----------    -----------
   Common stock issued for cash           1,795,800          1,796        445,144           --             --          446,940

   Common stock issued in
   connection with the exercise of
   stock options                            536,000            536         53,827           --             --           54,363

   Commissions paid in common
   stock in connection with common
   stock sales                               60,000             60            (60)          --             --             --

   Common stock returned to
   Company in connection with
   settlement of VAST joint venture        (700,000)          (700)      (118,650)          --             --         (119,350)

   Preferred stock issued for
   settlement of notes payable and in
   exchange for common stock             (6,850,000)        (6,850)      (835,650)          --             --          157,500


                                                 F-9
<PAGE>
                                             AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Continued)

                                             Preferred Stock              Preferred Stock
                                             $1.00 par value              $.001 par value
                                          Number        Amount          Number        Amount
                                          ------        ------          ------        ------
   Common stock issued for
   settlement of note payable and
   accrued interest                           --            --            --            --

   Common stock issued to purchase
   of royalty rights                          --            --            --            --

   Common stock issued in
   connection with acquisitions               --            --            --            --

   Common stock issued for services           --            --            --            --

   Common stock issued in
   connection with settlement of
   accrued liabilities                        --            --            --            --

   Preferred stock dividends                  --            --            --            --

   Net loss                                   --            --            --            --
                                       -----------   -----------   -----------   -----------
Balance at September 30, 1997            1,000,000     1,000,000          --            --
                                       -----------   -----------   -----------   -----------
   Common stock issued for services           --            --            --            --

   Common stock issued  to settle
   debt obligation                            --            --            --            --

   Common stock issued for cash               --            --            --            --

   Common stock returned to Company
   in settlement of SWSI acquisition          --            --            --            --

   Preferred stock dividends                  --            --            --            --

                                                                                                    Accumulated    Memorandum
                                              Common Stock            Additional                    During the       Total
                                             $.001 par value           Paid-In       Treasury      Development    Shareholders'
                                           Number        Amount        Capital         Stock          Stage     Equity (Deficit)
                                           ------        ------        -------         -----          -----     ----------------
   Common stock issued for
   settlement of note payable and
   accrued interest                      3,000,000         3,000     1,102,179          --             --        1,105,179

   Common stock issued to purchase
   of royalty rights                       500,000           500       124,500          --             --          125,000

   Common stock issued in
   connection with acquisitions          1,245,647         1,246       173,634          --             --          174,880

   Common stock issued for services      1,021,747         1,021        94,324          --             --           95,345

   Common stock issued in
   connection with settlement of
   accrued liabilities                     332,157           332        54,769          --             --           55,101

   Preferred stock dividends                  --            --            --            --          (12,000)       (12,000)

   Net loss                                   --            --            --            --         (648,256)      (648,256)
                                       -----------   -----------   -----------   -----------    -----------    -----------
Balance at September 30, 1997           24,871,947        24,872    22,009,477       (16,720)   (23,720,819)      (703,190)
                                       -----------   -----------   -----------   -----------    -----------    -----------
   Common stock issued for services        263,785           264        50,282          --             --           50,546

   Common stock issued  to settle
   debt obligation                         331,194           331        57,628          --             --           57,959


   Common stock issued for cash          2,087,800         2,088       275,506          --             --          277,594

   Common stock returned to Company
   in settlement of SWSI acquisition          --            --            --            (739)          --             (739)

   Preferred stock dividends                  --            --            --            --          (36,000)       (36,000)


                                                        F-10
<PAGE>
                                              AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Continued)

                                               Preferred Stock              Preferred Stock
                                               $1.00 par value              $.001 par value
                                            Number        Amount          Number        Amount
                                            ------        ------          ------        ------

   Net loss                                     --             --             --            --
                                         -----------    -----------    -----------   -----------
Balance at 9/30/98                         1,000,000      1,000,000           --            --
                                         -----------    -----------    -----------   -----------
   Preferred stock dividends                    --             --             --            --

   Net loss                                     --             --             --            --
                                         -----------    -----------    -----------   -----------
Balance at 9/30/99                         1,000,000      1,000,000           --            --
                                         -----------    -----------    -----------   -----------
   Conversion of preferred stock to
   common stock                           (1,000,000)    (1,000,000)          --            --

   Preferred stock dividends                    --             --             --            --

   Common stock issued to satisfy
   debt                                         --             --             --            --

   Common stock issued to satisfy
   shareholder claims                           --             --             --            --

   Common stock issued to satisfy
   accounts payable                             --             --             --            --

   Preferred stock issued to
   satisfy accounts payable                     --             --           19,100            19

   Preferred stock issued to
   satisfy notes payable                        --             --          835,316           835

   Preferred stock issued for services          --             --          237,500           238

   Preferred stock issued to
   satisfy shareholder claims                   --             --          102,479           402

                                                                                                     Accumulated    Memorandum
                                              Common Stock            Additional                    During the       Total
                                             $.001 par value          Paid--In       Treasury      Development    Shareholders'
                                           Number        Amount        Capital         Stock          Stage     Equity (Deficit)
                                           ------        ------        -------         -----          -----     ---------------

   Net loss                                     --             --             --            --         (336,535)      (336,535)
                                         -----------    -----------    -----------   -----------    -----------    -----------
Balance at 9/30/98                        27,554,726         27,555     22,392,893       (17,459)   (24,093,354)      (690,365)
                                         -----------    -----------    -----------   -----------    -----------    -----------
   Preferred stock dividends                    --             --             --            --          (36,000)       (36,000)

   Net loss                                     --             --             --            --          (94,352)       (94,352)
                                         -----------    -----------    -----------   -----------    -----------    -----------
Balance at 9/30/99                        27,554,726         27,555     22,392,893       (17,459)   (24,223,706)      (820,717)
                                         -----------    -----------    -----------   -----------    -----------    -----------
   Conversion of preferred stock to
   common stock                            8,850,000          8,850        990,150          --             --           (1,000)

   Preferred stock dividends                    --             --             --            --           (9,000)        (9,000)

   Common stock issued to satisfy
   debt                                   12,444,193         12,440        521,025          --             --          533,465

   Common stock issued to satisfy
   shareholder claims                        925,000            925         30,225           --            --           31,150

   Common stock issued to satisfy
   accounts payable                           75,000             75          3,453          --             --            3,528

   Preferred stock issued to
   satisfy accounts payable                     --             --            1,891          --             --            1,910

   Preferred stock issued to
   satisfy notes payable                        --             --           82,696          --             --           83,531

   Preferred stock issued for services          --             --           23,513          --             --           23,751

   Preferred stock issued to
   satisfy shareholder claims                   --             --           39,845          --             --           40,247


                                                       F-11
<PAGE>



                                            AGTsports, Inc.
                                      (A Development Stage Company)

                Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Continued)


                                Preferred Stock              Preferred Stock
                                $1.00 par value              $.001 par value
                             Number        Amount          Number        Amount
                             ------        ------          ------        ------



   Treasury stock retired          --            --            --            --

   Net income                      --            --            --            --
                            -----------   -----------   -----------   -----------
Balance at 9/30/00                 --            --       1,494,395         1,494
                            -----------   -----------   -----------   -----------

   Preferred stock issued
   satisfy accounts payable        --            --           5,000             5

   Preferred stock issued
   for services                    --            --           9,000             9

   Preferred stock cancelled                                (10,000)          (10)

   Net loss                        --            --            --            --
                            -----------   -----------   -----------   -----------
Balance at 9/30/01                 --      $     --       1,498,395         1,498
                            ===========   ===========   ===========   ===========


                                                                                      Accumulated    Memorandum
                                   Common Stock            Additional                 During the       Total
                                  $.001 par value           Paid-In       Treasury   Development    Shareholders'
                                Number        Amount        Capital         Stock       Stage     Equity (Deficit)
                                ------        ------        -------         -----       -----     ---------------

   Treasury stock retired          --            --            --          17,459       (17,459)          --

   Net income                      --            --            --            --          50,968         50,968
                            -----------   -----------   -----------   -----------   -----------    -----------
Balance at 9/30/00           49,848,919        49,845    24,085,691          --     (24,199,197)       (62,167)
                            -----------   -----------   -----------   -----------   -----------    -----------

   Preferred stock issued
   satisfy accounts payable        --            --              45          --            --               50

   Preferred stock issued
   for services                    --            --              81          --            --               90

   Preferred stock cancelled                                   (990)                                    (1,000)

   Net loss                        --            --            --            --        (108,392)      (108,392)
                            -----------   -----------   -----------   -----------   -----------    -----------
Balance at 9/30/01           49,848,919        49,845   $24,084,827   $      --    $(24,307,589)   $  (170,419)
                            ===========   ===========   ===========   ===========  ============    ===========


                        See accompanying notes to consolidated financial statements.

                                                F-12
<PAGE>

                                              AGTsports, Inc.
                                       (A Development Stage Company)

                   Consolidated Statements of Changes in Shareholders' Equity (Deficit)


                                                      Memorandum                                       Total
                                                         Total        Unrealized      Cumulative    Shareholders'
                                                     Shareholders'     Holding        Translation      Equity
                                                    Equity (Deficit)     Gain         Adjustment      (Deficit)
                                                    ---------------  -------------   -------------   -----------

Balance at January 6, 1986                            $      --      $        --     $        --     $      --
                                                      ===========    =============   =============   ===========

Balance at September 30, 1986                         $   143,496    $        --     $        --     $   143,496
                                                      ===========    =============   =============   ===========

Balance at September 30, 1987                         $    98,913    $        --     $        --     $    98,913
                                                      ===========    =============   =============   ===========

Balance at September 30, 1988                         $      --      $        --     $        --     $      --
                                                      ===========    =============   =============   ===========

Balance at September 30, 1989                         $ 5,501,004    $        --     $        --     $ 5,501,004
                                                      ===========    =============   =============   ===========

Balance at September 30, 1990                         $ 1,636,097    $        --     $        --     $ 1,636,097
                                                      ===========    =============   =============   ===========

Balance at September 30, 1991                         $ 2,455,291    $        --     $        --     $ 2,455,291
                                                      ===========    =============   =============   ===========

Balance at September 30, 1992                         $ 2,393,554    $        --     $        --     $ 2,393,554
                                                      ===========    =============   =============   ===========

Balance at September 30, 1993                         $ 2,017,577    $        --     $        --     $ 2,017,577
                                                      ===========    =============   =============   ===========

Memorandum total shareholders' equity                 $   864,748    $        --     $        --     $   864,748
     Unrealized holding gain                                 --          1,660,517            --       1,660,517
     Unrealized loss - foreign currency translation          --               --            (8,893)       (8,893)
                                                      -----------    -------------   -------------   -----------

Balance at September 30, 1994                         $   864,748    $   1,660,517   $      (8,893)  $ 2,516,372
                                                      ===========    =============   =============   ===========

Memorandum total shareholders' deficit                $(4,030,431)   $        --     $        --     $(4,030,431)
     Unrealized loss - foreign currency translation          --               --           (11,191)      (11,191)
                                                      -----------    -------------   -------------   -----------

Balance at September 30, 1995                         $(4,030,431)   $        --     $     (11,191)  $(4,041,622)
                                                      ===========    =============   =============   ===========

Memorandum total shareholders' deficit                $(2,137,892)   $        --     $        --     $(2,137,892)
     Unrealized loss - foreign currency translation          --               --           (16,823)      (16,823)
                                                      -----------    -------------   -------------   -----------

Balance at September 30, 1996                         $(2,137,892)   $        --     $     (16,823)  $(2,154,715)
                                                      ===========    =============   -------------   ===========

Balance at September 30, 1997                         $  (703,190)   $        --     $        --     $  (703,190)
                                                      ===========    =============   =============   ===========

Balance at September 30, 1998                         $  (690,365)   $        --     $        --     $  (690,365)
                                                      ===========    =============   =============   ===========

Balance at September 30, 1999                         $  (820,717)   $        --     $        --     $  (820,717)
                                                      ===========    =============   =============   ===========

Balance at September 30, 2000                         $   (62,167)   $        --     $        --     $   (62,167)
                                                      ===========    =============   =============   ===========

Balance at September 30, 2001                         $  (170,419)   $        --     $        --     $  (170,419)
                                                      ===========    =============   =============   ===========


See accompanying notes to consolidated financial statements.

                                                       F-13
<PAGE>

                                             AGT SPORTS, INC.
                                      (A Development Stage Company)
                                  Consolidated Statements of Cash Flows

                                                                                            Period from
                                                                                          January 6, 1986
                                                                    Years Ended            (Inception) to
                                                                   September 30,             September
                                                            ----------------------------    ------------
                                                                2001            2000            2001
                                                            ------------    ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                           $   (107,392)   $     50,968    $(24,197,130)
Adjustments to reconcile net income (loss)
  to net cash provided by (used in) operating activities:
    Depreciation and amortization                                    862             200       2,487,665
    Loss (gain) on disposal of assets                               --              --        (2,565,391)
    Loss on purchase of royalty rights                              --              --           125,000
    Loss on purchase of subsidiaries                                --              --           442,419
    Loss on sale of investments                                     --              --            35,072
    Loss on equity securities                                       --              --         4,973,015
    Write-down of investments to market                             --              --         3,567,629
    Debt forgiven                                                   --          (301,127)     (1,348,014)
    Territory management                                            --              --           205,000
    Territory sales/reacquisition                                   --              --           482,586
    Stock options                                                   --              --            56,250
    Equity in loss of joint venture                                 --              --           748,650
    Common stock issued for software                                --              --            58,988
    Common stock issued for services                                --            31,150       6,103,015
    Common stock issued for obligations                             --              --         2,744,293
    Preferred stock cancelled                                     (1,000)          -0-            (1,000)
    Preferred issued stock for services                               90          23,751          23,841
    Preferred issued stock for settlement expenses                    50          40,247          40,297
    Decrease (increase) in accounts receivable                      --              --          (329,229)
      Decrease in other assets                                      --              --            74,055
      Increase in prepaid expenses                                  --              --              --
    Increase (decrease) in accounts payable                         --
      and accrued expenses                                        88,265          81,806       1,273,332
                                                            ------------    ------------    ------------
  Net cash provided by (used in) operating activities            (19,125)        (73,005)     (4,998,657)
                                                            ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Return of capital - limited partnership                         --              --           500,000
    Receipts from notes receivable                                  --              --            80,772
    Loans made                                                      --              --          (237,328)
    Purchase of assets                                            (3,111)         (1,200)       (364,085)
    Purchase of stock in affiliate                                  --              --           (10,000)
    Proceeds from sale of investments                               --              --           277,739
    Proceeds from insurance settlement                              --              --            17,749
                                                            ------------    ------------    ------------
  Net cash provided by (used in) investing activities             (3,111)         (1,200)        264,847
                                                            ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from the exercise of common stock options              --              --            54,363
    Proceeds from issuance of common stock                          --              --         3,038,189
    Payments on capital lease financing                             --              --           (20,976)
    Principal payments on notes payable                             --              --          (138,106)
    Advances from affiliates                                        --              --         1,421,542
    Payments to affiliates                                          --              --          (509,317)
    Advances on line of credit (net)                                (287)           (804)        157,605
    Preferred stock dividends paid in cash                          --              --            (6,000)
    Advances on notes payable                                      7,000          91,534         737,534
                                                            ------------    ------------    ------------
  Net cash provided by (used in) financing activities              6,713          90,730       4,734,834
                                                            ------------    ------------    ------------

                                                  F-14
<PAGE>

                                         AGT SPORTS, INC.
                                   (A Development Stage Company)
                               Consolidated Statements of Cash Flows

                                                                                       Period from
                                                                                     January 6, 1986
                                                                    Years Ended       (Inception) to
                                                                   September 30,        September
                                                               ---------------------   -----------
                                                                  2001        2000         2001
                                                               ---------   ---------   -----------

Net increase (decrease) in cash                                $ (15,523)  $  16,525   $     1,024
Cash at beginning of year                                         16,547          22          --
                                                               ---------   ---------   -----------
Cash at end of year                                            $   1,024   $  16,547   $     1,024
                                                               =========   =========   ===========

Noncash financing and investing activities:
Common stock issued in connection with the
  settlement of certain accrued liabilities                    $    --     $    --     $   175,106
                                                               =========   =========   ===========
  Common stock issued in connection with the settlement
    of notes payable                                           $    --     $ 474,006   $ 1,631,506
                                                               =========   =========   ===========
  Common stock issued in connection with the settlement
    of accounts payable                                        $    --     $   3,528   $    61,487
                                                               =========   =========   ===========
  Common stock issued in connection with the settlement
    of certain accrued interest                                $    --     $  59,459   $   164,638
                                                               =========   =========   ===========
  Preferred stock issued in connection with settlement
    of notes payable                                           $    --     $  12,175   $    12,175
                                                               =========   =========   ===========
  Preferred stock issued in connection with settlement
    of accounts payable                                        $     140   $   1,910   $     2,050
                                                               =========   =========   ===========
  Preferred stock issued in connection with settlement
    of accrued interest                                        $    --     $  71,356   $    71,356
                                                               =========   =========   ===========
  Accrued dividends converted to note payable                  $    --     $  87,000   $    87,000
                                                               =========   =========   ===========
  $1 Par preferred stock converted to common stock             $    --     $ 999,000   $   999,000
                                                               =========   =========   ===========
  Preferred stock dividends included in accounts payable       $    --     $    --     $    45,000
                                                               =========   =========   ===========
  Assets acquired and liabilities assumed in connection with
    purchase of Tea Times of America, Inc.
  Notes payable                                                $    --     $    --     $   218,500
                                                               =========   =========   ===========
  Accrued liabilities                                          $    --     $    --     $    35,320
                                                               =========   =========   ===========
  Accounts receivable                                          $    --     $    --     $     5,771
                                                               =========   =========   ===========
  Goodwill                                                     $    --     $    --     $    28,682
                                                               =========   =========   ===========
  Common stock retired in connection with termination
    of VAST joint venture                                      $    --     $    --     $   119,350
                                                               =========   =========   ===========
  Common stock issued in connection with acquisitions          $    --     $    --     $   174,880
                                                               =========   =========   ===========
  Common stock issued in connection with the purchase
    of royalty rights                                          $    --     $    --     $   125,000
                                                               =========   =========   ===========
  Marketable securities received as contribution to capital    $    --     $    --     $   152,000
                                                               =========   =========   ===========
  Marketable securities contributed to capital                 $    --     $    --     $  (152,000)
                                                               =========   =========   ===========
  Additional paid in capital received                          $    --     $    --     $ 5,314,678
                                                               =========   =========   ===========
  Additional paid in capital contributed                       $    --     $    --     $(5,314,678)
                                                               =========   =========   ===========
  Transfer assets to limited partnership and termination
    pursuant to agreement                                      $    --     $    --     $      --
                                                               =========   =========   ===========
  Issuance of common stock in exchange for investment
    in joint venture                                           $    --     $    --     $   868,000
                                                               =========   =========   ===========
  Issuance of common stock in exchange for liability to
    issue common stock                                         $    --     $    --     $ 3,187,349
                                                               =========   =========   ===========
  Loan assumed by shareholder                                  $    --     $    --     $    70,000
                                                               =========   =========   ===========


                                               F-15
<PAGE>


                                AGT SPORTS, INC.
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows

                                                         Years Ended
                                                         September 30,
                                                  ---------------------------
                                                    2001               2000
                                                  --------           --------

Supplemental information:

  Interest paid                                   $    411           $  4,222
                                                  ========           ========
  Taxes paid                                      $  --              $   --
                                                  ========           ========




                                      F-16
</TABLE>
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

AGT Sports, Inc. (the "Company") is in the development stage. The Company has
not commenced principal operations and has not sold significant products.
Revenue in prior periods resulted from preoperative product tests, which were
unsuccessful and terminated prior to the commencement of planned principal
operations. The Company was incorporated under the laws of the state of Colorado
on January 6, 1986 as American Merger Control, Inc. In 1990, the Company changed
its name to Ultratech Knowledge Systems, Inc., and in 1993 the Company changed
its name again to AGTsports, Inc. (AGT). During the fiscal years ended September
30, 1991 and through September 30, 1998, the Company's business plan was to
pursue providing technological and software services to golf and related
industries. In 1998, the Company abandoned this business plan. Management of the
Company is now pursuing other alternatives such as possible business
combinations with other entities.

Summary of Significant Accounting Policies

A summary of the significant accounting policies used in preparing the
accompanying financial statements follows:

Basis of Presentation

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As shown in the financial
statements, the Company has incurred net losses before extraordinary items of
$108,002 and $169,348 for the years ended September 30, 2001 and 2000,
respectively. At September 30, 2001 and 2000, the Company has a net working
capital deficit of $173,668 and $63,167 respectively, and a shareholders'
deficit of $170,419 and $62,167 respectively all of which raise substantial
doubt about the Company's ability to continue as a going concern. Management has
developed plans intended to remedy these conditions. These plans include seeking
other sources of financing such as the completion of a possible business
combination and the sale of common stock. No assurances can be given as to the
success of these plans. The financial statements do not include any adjustments
that might result should the Company be unable to continue as a going concern.

                                      F-17
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


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

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements.
Estimates also affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates, however
management does not believe these differences would have a material effect on
operating results.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short
term, highly liquid investments with maturities of three months or less to be
cash equivalents.

Revenue Recognition

Revenue is recognized when services are rendered or when computer software
products are delivered.

Stock-Based Compensation

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," encourages, but does not require companies to record compensation
cost for stock-based employee compensation plans at fair value. The Company has
chosen to account for stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. Accordingly, compensation
cost for stock options is measured as the excess, if any, of the quoted market
price of the Company's stock at the date of the grant over the amount an
employee must pay to acquire the stock.

Property and Equipment

The cost of property and equipment is depreciated over the estimated useful
lives of the related assets. Depreciation is computed using the double declining
method for financial reporting purposes and income tax purposes.

Fair Value of Financial Statement Instruments

The estimated fair value of amounts reported in the financial statements have
been determined by using available market information and appropriate valuation
methodologies. The carrying values of assets and liabilities approximate their
fair values either because of their short-term nature or based upon their
interest rates, which approximate market interest rates.

                                      F-18
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


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

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the carrying amounts of
existing assets and liabilities measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.

Comprehensive Income

Financial Accounting Standards No. 130 establishes standards for reporting
comprehensive income which is defined as the change in equity of an enterprise
except those resulting from stockholder transactions. All components of
comprehensive income are required to be reported in the income statement. The
Company adopted this standard effective October 1, 1998. During 2001 and 2000,
the Company did not engage in any transactions required to be reported under
this new Standard.

Loss Per Share

Loss per common share has been computed based upon the weighted-average number
of shares outstanding during the period. The Company's preferred stock and
options are common stock equivalents, and have been included in the calculation
of fully diluted earnings per share for the year ended September 30, 2000. These
securities are antidilutive for the year ended September 30, 2001 and therefore
fully diluted earnings per share equals basic earnings per share.

Foreign Currency Translation

The Company's primary functional currency is the U.S. dollar. For non-U.S.
subsidiaries whose functional currency is not the U.S. dollar, monetary assets
and liabilities are translated at current year-end exchange rates while
nonmonetary items are translated at historical rates. Income and expense
accounts are translated at the average rates in effect during the year, except
for depreciation and cost of product sales, which are translated at historical
rates. Adjustments resulting from these translations are reflected in the
Shareholders' equity section titled "Cumulative Translation Adjustment."

                                      F-19
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 2 -RELATED PARTY TRANSACTIONS

Effective October 1, 1999 the Company entered into a two-year consulting
agreement with Cory J. Coppage (a shareholder of the corporation) for $5,000 per
month plus expenses. Mr. Coppage may elect to be paid in cash or stock. In
addition, Mr. Coppage received 225,000 shares of Series 2000A Preferred Stock as
a signing bonus. The agreement may be renewed for two subsequent one-year
periods. The agreement was renewed for the 2002 year.

During the years ended September 30, 2001 and 2000 the Company reimbursed $6,570
and $27,957 in expenses pursuant to the agreement. Mr. Coppage's consulting fees
for fiscal year 2001 and 2000 have not been paid and are included in accrued
expenses on the balance sheet.

In 1995, the Company entered into a joint venture agreement with Global Links
Trading Ltd. (GLT). Pursuant to the agreement, GLT received 7,850,000 shares of
the Company's common stock. GLT subsequently sold 1,000,000 shares of common
stock to third parties. In May, 1997, the Joint Venture agreement was amended
and GLT exchanged 6,850,000 shares of common stock and a note payable with an
outstanding principal balance of $172,500 for 1,000,000 shares of convertible
preferred stock plus $15,000. The preferred stock is convertible at the option
of GLT at a ratio of two shares of restricted common stock for each share of
preferred stock. The preferred stock bears an aggregate dividend of $3,000 per
month for 83 months. As of September 30, 1999, accrued dividend payments of
$78,000 were unpaid. Such amounts have been included in accounts payable at
September 30, 1999 in the accompanying balance sheet. The amended joint venture
agreement provides for a default in the event a preferred stock dividend payment
remains unpaid. The agreement required the Company to reissue all common stock
surrendered by GLT under this amendment and all future payments due by the
Company have been suspended.

In December 1999, the Company entered into a settlement agreement with GLT's
successor Nycon Resources. In connection with the settlement agreement, the
Company issued 8,850,000 shares of its common stock to Nycon Resources and was
relieved of all further obligations under the joint venture agreement.

NOTE 3 - PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

                                               2001      2000
                                               ----      ----

               Equipment                     $ 4,311    $ 1,200
               Accumulated depreciation       (1,062)      (200)
                                             -------    -------
               Property and equipment, net   $ 3,249    $ 1,000
                                             =======    =======

                                      F-20
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 4 - NOTES PAYABLE

Notes payable consist of the following:
                                                      2001     2000
                                                     ------   ------
            Unsecured notes payable due on demand
              Interest at 10%                        $7,000   $ --

            Other                                     2,168    2,455
                                                     ------   ------

            Total notes payable                       9,168    2,455
            Less current portion                      9,168    2,455
                                                     ------   ------

            Total long-term debt                     $ --     $ --
                                                     ======   ======


NOTE 5 - PREFERRED STOCK

During the year ended September 30, 2000, the Company had two issues of
preferred stock outstanding. From October 1, 1999 through December 17, 1999 the
Company had 1,000,000 shares of $1.00 par convertible preferred stock
outstanding in connection with a previous joint venture agreement. The shares
paid a dividend of $36,000 per year. For the year ended September 30, 2000, the
Company paid $9,000 in dividends to the holders of these shares. On January 17,
1999 these shares of preferred stock were converted to 8,850,000 shares of
common stock.

On August 28, 2000 the board of directors authorized the issuance of 1,500,000
shares of "Series 2000A" convertible preferred stock with a par value of $.001
per share. Approximately 1,495,000 shares were issued in connection with the
settlement of accounts and notes payable. The shareholders of these preferred
shares are entitled to a preference in liquidation of ten cents per share. These
preferred shareholders also receive dividends on a pro-rata basis with common
stockholders. No dividends were paid during the years ended September 30, 2001
and 2000. Each share is convertible at the option of the shareholder to one
share of common stock. In addition, the shares will automatically convert to
common shares upon the closing of a firm commitment underwritten public offering
with net proceeds in excess of $2,000,000 or a vote of two-thirds of the
preferred shareholders.

                                      F-21
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 6 - STOCK BASED COMPENSATION AND STOCK OPTIONS

On August 29, 1996 the Company's Board of Directors approved a director stock
option plan whereby 417,964 shares of common stock were reserved for grant to
members of the board of directors. The exercise price will be the average stock
price during the twenty trading days immediately preceding the grant. No common
stock options were granted in connection with this plan during the years ended
September 30, 2001 and 2000.

In addition, the Company has stock option plans under which certain key
employees may be granted options to purchase shares of Company common stock
which are exercisable at market value at the date of grant. Options generally
vest immediately and either have no expiration date or expire five years from
the date of the grant.

The Company applies APB Opinion 25 and related interpretations in accounting for
its plans. Accordingly, compensation costs are recognized as the difference
between the exercise price of each option and the market price of the Company's
stock at the date of grant. No compensation costs were charged to income in
2001. Had compensation for the Company's stock option plans been determined
based on the fair value at the grant dates for awards under those plans
consistent with the method of FASB Statement 123, the Company's net income would
not have changed.

The following is a summary of the status of the Company's stock option plans as
of September 30, 2001:

                                        Number     Option Price
                                      of Shares      Per Share
                                     ----------    ------------

            Outstanding at 9/30/99    1,733,333    $ .13 to .19
            Granted                        --             --
            Exercised                (1,733,333)     .13 to .19
            Expired                        --             --
                                     ----------    ------------

            Balance at 9/30/00             --             --
            Granted                        --             --
            Exercised                      --             --
            Expired                        --             --
                                     ----------    ------------

            Balance at 9/30/01             --      $      --
                                     ==========    ============

                                      F-22
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 6 - STOCK BASED COMPENSATION AND STOCK OPTIONS (Continued)

During fiscal 1997 certain purchasers of common stock were granted options to
purchase one share of common stock for each dollar invested. Such options expire
five years from the date of grant and are exercisable at 50% of the market value
of the common stock on the day of exercise. In addition, 175,000 options were
issued to the selling shareholders of TTA. Such options are exercisable at $1
per share. At September 30, 2001, 451,000 options are outstanding with respect
to options granted in connection with certain 1997 common stock sales and to the
selling shareholders of TTA. If these options are exercised, the Company does
not have sufficient shares authorized.

NOTE 7 - INCOME TAXES

During the year ended September 30, 2000, the Company used prior net operating
losses to offset income reported for the fiscal year. The Company realized
approximately $301,000 of income, as the result of debts forgiven by various
creditors. The taxes associated with this income (approximately $100,700) were
partially offset by the current period loss from operations. The remaining
balance of approximately $19,800 was offset by prior operating losses.
Therefore, the Company has no income tax liability for the years ended September
30, 2001 or 2000.

The Company has a deferred tax asset as the result of temporary differences
attributable to the carry forward of prior year net operating losses. The tax
asset represents the future taxes that will be offset by reducing future income
by the net operating losses. The following schedule shows the balance of the
deferred tax asset

                                              2000           2000
                                           -----------    -----------
         Deferred tax assets:
           Net operating loss carryovers   $ 4,872,226    $ 4,847,128
                                           -----------    -----------

         Total gross deferred tax assets     4,872,226      4,847,128

         Less valuation allowance           (4,872,226)    (4,847,128)
                                           -----------    -----------

         Net deferred tax assets           $      --      $      --
                                           ===========    ===========

A valuation allowance has been established to reduce the deferred tax assets to
an amount that management believes will ultimately be realized. Realization of
deferred tax assets is dependent upon sufficient future taxable income during
the period that temporary differences and carryovers are expected to be
available to reduce taxable income. Based on the Company's history of operating
losses and expectations for the future, management believes sufficient
uncertainty exists regarding the realizability of these items and therefore a
valuation allowance has been provided to reduce the tax asset to its net
realizable value.

                                      F-23
<PAGE>


                                 AGTsports, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 7 - INCOME TAXES (Continued)

At September 30, 2001, the Company has net operating loss carryovers for tax
reporting purposes totaling approximately $22,904,000. These carryovers will
expire in the following fiscal years:

         Fiscal Year                                     Amount
         -----------                                  ------------

         2004                                         $  1,325,000
         2006                                            1,182,000
         2007                                            7,590,000
         2008                                            3,789,000
         2009                                            5,206,000
         2010                                            3,026,000
         2011                                               92,000
         2012                                              492,000
         2013                                               95,000
         2020                                              107,000
                                                      ------------

                                                      $ 22,904,000
                                                      ============


NOTE 8 - DEBT FORGIVENESS

During the September 30, 2000 fiscal year, management negotiated with its
creditors to eliminate outstanding accounts and notes payable. Most accounts
payable were forgiven out right, however in some instances management made a
small payment or issued stock to settle the obligations. The Company issued
stock to satisfy notes payable and the related accrued interest thereon. The
excess of the payable over the fair value of the stock issued is reported as
debt forgiveness income.

                                               2000
                                             --------

                          Accounts payable   $130,500
                          Notes payable       170,500
                                             --------

                               Total         $301,000
                                             ========

In addition, the Company negotiated settlements of other obligations such as
shareholder claims, non-dilutive rights, and stock options in exchange for
Series A preferred stock. Using a stock value of ten-cents per share, the cost
assigned to settlement of these obligations was approximately $71,400.


                                      F-24