UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

     [X] Annual report under Section 13 or 15(d) of the Securities  Exchange Act
of 1934 for the fiscal year ended December 31, 1999

     [ ] Transition report under Section 13 or 15(d) of the Securities  Exchange
Act of 1934 (No fee required) for the transition period from        to


     Commission file number: 000-28513
                             ---------

                              Learner's World, Inc.
                            ------------------------
                 (Name of Small Business Issuer in Its Charter)

                New York                              11-33313 50
               ----------                             ------------
    (State or Other Jurisdiction of         (I.R.S. Employer Identification No.)
    Incorporation or Organization)

                     369 Avenue U, Brooklyn, New York 11223
                     ---------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (718) 449-3194
                       -----------------------------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

         Title of Each Class           Name of each Exchange on Which Registered
         -------------------           -----------------------------------------
   Common Stock ($0.0001 Par Value)                       None

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                               Yes    X                   No
                                   ------

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure  will be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB [ X].

The issuer's total  consolidated  revenues for the year ended December 31, 1999,
were $ 1,303,239.

The aggregate market value of the registrant's  Common Stock,  $0.0001 par value
(the only  class of voting  stock),  held by  non-affiliates  was  approximately
$1,821,603,  based on the average  closing  bid and asked  prices for the Common
Stock on March 27, 2000.

At March 27, 2000, the number of shares  outstanding of the registrant's  Common
Stock, $0.0001 par value (the only class of voting stock), was 10,270,007.


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                                TABLE OF CONTENTS

                                                                            PAGE

                                     PART I

Item 1.       Description of Business..........................................1

Item 2.       Description of Property..........................................8

Item 3.       Legal Proceedings................................................8

Item 4.       Submission of Matters to a Vote of Security-Holders............. 8


                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters.........9

Item 6.       Management's Discussion and Analysis or Plan of Operation.......10

Item 7.       Financial Statements............................................13

Item 8.       Changes in and Disagreements With Accountants on
                 Accounting and Financial Disclosure..........................14

                                    PART III

Item 9.       Directors and Executive Officer  ...............................14

Item 10.      Executive Compensation..........................................15

Item 11.      Security Ownership of Certain Beneficial
                 Owners and Management........................................16

Item 12.      Certain Relationships and Related Transactions..................17

Item 13.      Exhibits, List and Reports on Form 8-K..........................18

              Signatures .....................................................19


<PAGE>



                                     PART I

This Report contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the  safe  harbors   created   thereby.   Investors  are   cautioned   that  all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the  ability of the  Company to continue  its  expansion  strategy,
changes in costs of raw  materials,  labor,  and employee  benefits,  as well as
general  market  conditions,  competition  and  pricing.  Although  the  Company
believes  that  the  assumptions   underlying  the  forward-looking   statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
included  in this  Annual  Report  will  prove to be  accurate.  In light of the
significant  uncertainties  inherent in the forward-looking  statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by the Company or any other person that the objectives and plans
of the Company will be achieved.

ITEM 1.       DESCRIPTION OF BUSINESS

As used herein the term "Company"  refers to Learner's  World,  Inc., a New York
Corporation, and its subsidiaries and predecessors, unless the context indicates
otherwise.  The Company was formed on June 28, 1996,  with the intent to own and
operate  facilities  for the care,  education  and  recreation  of children.  In
December  1996,  the  Company   acquired  three  children's  care  and  learning
facilities from three affiliated  corporations for a four year note of $775,000,
bearing interest at the rate of 7% per annum.  (See "Certain  Relationships  and
Related Transactions").  The Company's facilities are at the following locations
in the New York  metropolitan  area:  (i) 369  Avenue  U,  Brooklyn,  New  York,
established in May 1993; (ii) 1535 First Avenue, New York, New York, established
in September  1994, the Company has since moved the location of this facility to
432  Lakeville,  Lake  Success,  New York 11402;  and (iii)  208-34 Cross Island
Parkway,  Bayside, New York,  established in June 1994. The Company provides the
following  services  for children and  students:  (1) day care and  recreational
services  for  children  between  the  ages of two and one-  half  and ten,  (2)
academic  tutorial  services for  students of all ages through high school,  (3)
instruction  in computer  skills and functions for students and adults,  and (4)
psychological  diagnostic and remedial  services for children,  provided through
licensed consulting professionals.

A.   Family Entertainment and Child Care Centers

Services

Each center the Company  operates  offers the following  services to families in
the New York City metropolitan area:

     o    Play Center:  The play centers  feature a distinct play zone comprised
          of a series  of  state  of the art  "soft"  play  equipment  providing
          physical challenges and mental stimulations.

     o    Mini-Play Center:  The mini-play center is a special toddler area with
          mini-play  equipment  and other  games  and  activities  designed  for
          toddlers.

     o    Birthday Center:  Each center has private rooms available seven days a
          week   (including   certain   holidays)   for   birthdays   and  other
          celebrations.


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     o    Snack Bar: A  comfortable  eating  area and a  convenient  quick serve
          snack bar are located inside each center.

     o    Play Center Arcade:  This area of the centers  provide arcade machines
          for children  who wish to take a break from the  physical  exertion of
          the Play Center.

     o    Academic  Tutorial  Services:  Academic tutorial services for students
          ranging from Kindergarten to 12th grade.

     o    Child  Care:   The  Company's   facilities   provide  child  care  and
          recreational  activities for two and one-half to ten year old children
          from 7:00 A.M. to 7:00 P.M. five days per week.


     o    Computer  Assisted  Instruction:  Computer  assisted  instruction  for
          students and adults at all levels.

     o    Diagnostic and  Prescriptive  Services:  Diagnostic  and  prescriptive
          services for children having difficulties in the school environment.

The Company's  sources of revenue are tuition and fees,  generally charged on an
hourly  basis for day care,  tutoring  and  computer  instruction.  Charges  for
diagnostic  and treatment  services are also  currently made on an hourly basis.
Although the family entertainment  centers which include locations in Manhattan,
Brooklyn  and  Queens,  are  financially  solvent  the  addition  of child care,
tutorial and computer instruction has enhanced revenue as these programs operate
mostly  during the hours when the play  activities  are at the  minimal.  All of
these  services are easily and  logically  merged.  They are  compatible in both
theme and space utilization.

Competitive Conditions

The children's day care and educational business is highly competitive. Numerous
children's day care centers and educational  facilities compete with the Company
for customers and  qualified  personnel,  including  teachers,  instructors  and
care-givers.  There are many  child  care and  family  entertainment  facilities
located  throughout the city of New York. Many of the Company's  competitors are
smaller  privately owned  facilities that operate only a single location and are
greatly dependent on the surrounding geographic area and do not directly compete
with or effect the  revenues  of the  Company.  However,  some of the  Company's
competitors are larger corporations that operate franchises throughout the city,
many of these child care  corporations  have significant  resources and directly
compete  with the  Company  for child care  revenues.  New  children's  day care
centers  and  educational  facilities  will  be  established  in the  future  by
competitors  and may  compete  with the  Company for  customers,  employees  and
suppliers. These competitors may have greater financial and managerial resources
than the Company.  The Company also competes with other types of facilities  for
children  and  students,  including  traditional  schools,  vocational  schools,
standard day care and babysitting services, children's recreational centers such
as The Discovery Zone, and other educational and recreational  opportunities for
children.

Method of Competition

The Company will attempt to gain a competitive advantage over its competitors in
the child  care  industry  by  diversifying  the  products  that it  offers  and
therefore  better  utilizing its resources for a greater profit  potential.  The
addition of child care, and academic programs into currently functioning family

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entertainment  centers  has  resulted  in  centers  that  are  functionally  and
financially  productive  from the  opening  hour of 7:00  A.M.  to the  close of
operations of 7:00 PM.

Suppliers

The Company  receives  supplies from a variety of  distributors.  The few single
vendors  that  the  Company  uses  for  items  such as  teaching  materials  and
curriculum,  paper and school  supplies,  food, and other items  necessary for a
fully  operational day care facility are easily replaced if needed and would not
have a material  effect upon the revenues of the Company should the Company need
to change principal suppliers.

Dependance On One or Few Customers

The primary  customers for the Company are individual  family  households and no
single  customer makes up more than a small percent of the total  revenues.  The
Company does not expect that this will change in the future.

Government Regulation

The Company and its facilities are subject to extensive government regulation at
the  federal,  state and local level.  The Company  must comply with  government
regulations   regarding   employment,   wages,   safety,   child  care,  teacher
certification,  staff  credentials,  access for handicapped and disabled persons
and other laws, rules,  regulations and ordinances.  The Company must follow the
State of New York child care  regulations  and hold  current  licences  for each
facility  in order to  conduct  a child  care  business.  The  Company  has held
licences since 1996 and is currently in good standing with the State of New York
having  renewed  its  licenses  in April of 1999.  These  licenses  are  renewed
automatically  every two years upon application.  The next renewal will occur in
April of 2001.  Although the Company does not foresee any change in the state or
federal  regulation of child care, if changes should occur the Company  believes
that it can adapt to such new  regulations and that those changes would not have
any  significant  effect on  revenues  or  current  operations  of the  Company.
However,  no  assurance  can be made that  compliance  or failure to comply with
future  regulation  will not have a materially  adverse  effect on the business,
operating results or financial condition of the Company.

Test Preparation Internet Website

The Company has several  products  and plans for others  which have been used to
create a dynamic  interactive on line test  preparation and vocational  training
website.  The Company's new website became fully  operational in January of 2000
and is located on the  Internet at  www.learnersworld.com.  Through this website
the Company  plans to offer to the public a location on the  Internet  where the
customers  can  prepare  for tests such as the SAT and other  educational  exams
including  but not  limited to  medical,  law,  and  business.  The site will be
designed to help customers  prepare for vocational tests, such as civil service,
post office,  park ranger,  police or firefighter.  The Company also hopes to be
able in the  future to offer  courses  in other  professions  such as  insurance
agent,  stock broker,  or real estate agent.  The Company  intends to bring this
content to the  Internet  and pair it with  existing  and  emerging  software to
create an exciting interactive on line learning environment.

Products

The Company will supply online computer based training to be used to prepare for
vocational and educational  placement testing. All test preparation courses will
be  interactive  with live chat rooms and instructor  availability.  Each course
includes  simulated test  environment for time and content as well as a specific
section on test taking  techniques  for the  particular  exam.  By offering it's
services  online,  the  Company  will  attempt to address a  perceived  need for
alternative modes of training that are both flexible

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and convenient.  Unlike the current  educational  offerings now available on the
Internet, which are mostly university or government based or highly technical in
content,  the Company  intends to offer  training  which will  assist  people to
obtain  necessary  knowledge or  certification to prepare for exams and to train
for new skills. The exams/training  which the Company intends to offer will help
the customer to obtain such benefits as gaining employment or advancing in their
current careers and advancing their educational goals.

The Company plans to provide test preparation courses in the following areas:

     o        Civil Service

     o        SAT
     o        CLEP

The  Company is also  developing  additional  test  preparation  areas which may
include:

     o        Postal Service
     o        Security Guard Training
     o        High School Diploma Program

     o        AMA Qualifying Exams For Foreign Doctors:
     o        Hospitality (hotel/motel) Management
     o        Medical And Related,  Such As Home Health Attendants,  EKG, Nurses
              Aid, Etc.  ESL (English as a second language)

Distribution

Distribution  for the test  preparation  courses  will be through the  Company's
website, www.learnersworld.com.

Target Market

The Company's target market is growing as factors including downsizing,  welfare
to workfare programs, the need for more skilled and better trained workers and a
competitive  workplace puts an emphasis on lifetime learning and successful test
taking. Also, corporations are looking for cost efficient methods to train their
employees around the country and the world.

Many persons are looking for ways to increase  their  academic  credentials  and
improve their work  environment by seeking to obtain higher education and obtain
more responsible positions. Many of these activities start with the need to take
an exam of some  kind.  This is an area in which  the  Company  can help them to
become prepared. These potential customers need to fit education into their busy
lifestyles. The Company intends to combine current technology with well designed
test preparation and training materials for academic,  vocational,  professional
and health  care  learning  as well as custom  designed  courses  for  corporate
training.

According to the Company's research,  the Company's target customers are showing
a growing interest in the Company's proposed educational format,  categorized as
distance  learning.  The  increased  level of  advertising  by  degree  granting
colleges and  universities  is making more and more people aware of the benefits
and  legitimacy of distance  learning via the Internet.  Internet World magazine
gives examples of "The Internet Education" which included online degree programs
offered by traditional  institutions such as Penn State and Indiana  University,
as well as  nontraditional  entities  such as  University  Online and the Global
Network Academy. Businesses see profits in the estimated $670 billion the United
States  spends  on  education  each  year  (growing  about 3% a year) and the 67
million students in the United States alone.

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Family  PC  Magazine  estimates  that 1 million  students  are  taking  distance
learning classes via the Internet.  The International Data Corporation estimates
that the number of college  students  enrolled in online  courses will reach 2.2
million by the year 2002. The Company believes the private/public  sector growth
of test preparation and training will be following close behind.

Corporate  America is also  showing a growing  interest in  distance  education.
Faced with retraining an estimated 50 million American workers, corporations are
using  distance  learning  in all  aspects  of  training,  both  internally  and
externally.  Many major  corporations  like  Hewlett-Packard  save  millions  of
dollars each year using distance  education to train employees more  effectively
and efficiently than traditional  methods.  Budgeted spending on formal training
by U.S.  organizations with 100 or more employers topped $60 billion in 1998 and
is estimated  to grow to $62.5  billion in 1999.  That is a 29 percent  increase
since 1993,without  accounting for mild inflation.  As always,  salaries paid to
internal training staff make up the bulk of the budget.  This salary total is up
2.4 percent  over the  previous  year and is now in excess of $43  billion.  The
fastest growing segment,  however,  is outside  expenditures and the $15 billion
spent on the  commercial  training  market is a  significant  increase from 1998
(Training  Industry Magazine 1999). If we add to this the estimated amount spent
by companies  with under 100 employees and the amount  otherwise  spent for test
preparation of all kinds, the Company  estimates the total market may exceed $85
billion. The Company hopes to capture a small portion of this market.

The Company's research shows, that there may be a need for proposed training and
testing  services.  Annually,  there are  100,000  people  applying  to take the
sanitation workers exam, 49,000 New Yorkers requesting mail handler's exams, and
60,000 applying for applications for police and fire exams.  This demonstrates a
potential need for vocational test preparation. Falling SAT scores and less than
satisfactory  math and science  scores  among  school  students  provide a great
potential for the Company's products.

Pricing Policy

The Company's  pricing  policy should make it's site an enticing  alternative to
traditional  methods of learning  (i.e.  classroom  and home study)  while still
providing  appropriate profit margins.  Approximately 60% - 70% of the Company's
offerings  will be priced  between  $49.95  and  $69.95  giving us an average of
approximately $60.

The remainder of the Company's tests, mostly in the professional and health care
series, will range in price from $99.95 to $199.95. Corporate projects requiring
custom developed content will be priced from the mid five figures to the low six
figures, with additional ongoing fees for web hosting and maintenance.

B.   Educational Internet Website

Business Strategy

The Company's  strategy is to offer an extensive  array of test  preparation and
training  courses  covering  needs in  academics,  health  care,  vocations  and
professions  in a dynamic  and  enjoyable  fashion.  A  separate  segment of the
Company's web site will deal with custom designed  training and test preparation
courses for private industry,  government  agencies and unions. The Company will
attempt to create brand

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recognition by implementing an aggressive  advertising  campaign emphasizing the
Company's  benefits,  including quality content,  a learner  community,  support
services, and a high level of interaction.

Competitive Conditions

There are currently  several  significantly  larger  companies that will compete
with the Company in the test  preparation  and training  market.  The  companies
include, but may not be limited to Kaplan, Princeton Review, and Sylvan Learning
Centers.  These companies are well  established and have  significantly  greater
resources  and  currently  established  websites.  Additionally,  the  web  site
developed by the "Educational Testing Services" (ETS) has a fairly sophisticated
model for on line test  taking.  However,  it only does the test taking on line,
not the training for the tests. ETS is the largest  administrator  and developer
of tests in the country and is the  organization  responsible  for  development,
distribution  and  grading of tests  including,  SAT,  GMAT,  GRE and most other
college entrance exams as well as other exams for the government.  The Company's
ability to compete with these  companies  will greatly  depend on its ability to
establish a unique and  appealing  product,  its ability to increase  the public
awareness of its product and bring individuals to its website.

The Company  believes it can compete to some degree with these bigger  companies
because,  to the knowledge of the Company,  the competition has yet to offer the
unique  mixture of content and format offered by the Company.  Universities  and
colleges use the Internet for distance learning courses, but they do not provide
test  preparation  and  career  development  content.  Companies  offering  test
preparation continue to do so in the traditional format. They are just beginning
to formulate  distance learning  strategies.  None of them offer vocational test
preparation.  This  gives  the  Company  a  unique  opportunity  to help  define
standards and to possibly become a market leader. Lotus Development Corporation,
a  major  division  of  IBM  Corporation,  says  that  advances  in  educational
technology  will prove  useless,  unless  companies  step  forward  and  combine
technology with content and deliver it to the end user. That is what the Company
will attempt to do.

Method of Competition

The Company will attempt to give its customers access to computer based training
over  the  Internet  at a  more  reasonable  cost  and  create  content  driven,
interactive educational training sites. The Company will also attempt to gain an
advantage over its competition by utilizing the computer and online  technology.
The Company  believes that because its content and products will be based solely
online it will be able to more  efficiently  change and adapt to current  market
conditions. Utilizing this approach, the Company hopes to gain an advantage over
the  competitors  by  offering  products  as  quickly as  possible  in an online
environment.  Emphasis will be placed by the Company on increasing  its exposure
to the public  through  advertising  both through the  Internet and  traditional
media  outlets,  such as print and  broadcast  media.  Through this strategy the
Company believes that it can establish  itself in the test  preparation  market.
The Company's  intention is to use the computer to provide  individualized  test
preparation  training and evaluation  where a student signs onto the web site at
anytime  and needs  only an  available  terminal  to begin a  session.  Once the
student signs on to the computer,  the computer will  determine if the student's
account  is up to date,  where  they  left off in their  last  session  and then
proceed with the student from that point. The computer will address each student
as an individual, or as far as the computer is concerned, a class of one person.
Student  interaction  with the  computer  will be tracked and at the end of each
session,  depending on the students responses to questions, the computer will do
an  evaluation  and  recommend  which  parts of the  course  material  should be
reviewed by the student before going forward. If necessary, students will be

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reminded to make a payment  before their next  session,  will be  encouraged  to
provide  referrals  and will be  notified  of  special  events  and/or  calendar
changes, etc.

Patent Protection

The  Company is filing  for  patent  protection  for its  products,  in order to
protect what it believes is a unique combination of content and delivery system.

Income Streams

Once the Company's  plans are fully  developed,  it is intended that the Company
will  have  four  distinct  income  streams.  The  users  paying  to  take  test
preparation  and training  courses.  Advertising  sales,  a business  that could
become significant because of the exceptional demographics of our potential user
base which is expected to include high school and college students,  blue collar
workers,  and  professional  and health care  workers.  Most of these people are
expected   to  fall   into   the   sixteen   to  forty   year  old  age   group.
Corporate/government  customers  paying  for  the  development  of  custom  test
preparation  and  training   courses  and  the  ongoing  fees  for  hosting  and
maintenance of these custom  projects.  Lastly,  the Company  expects to realize
referral fees and royalties from Internet based  retailers to whom we direct our
user base.

Growth

If the Company decides to raise additional capital, it would be used to fund the
continuation of research and development,  some of which is very  sophisticated,
requiring  audio and video  highlights  and skilled  professionals  for content.
These courses will be sold for considerably  more than base prices.  The Company
will also need to significantly  increase our advertising to support our goal of
growing the Company's  business on the national and  international  level.  This
will  allow the  Company  to take  advantage  of being one of the first into the
market and to attempt to secure and hold a  significant  market  share.  Initial
advertising  will be print,  radio,  and possibly  subways and  billboards.  The
addition of an  Informercial  has been decided upon and, when budget allows,  TV
spots will be added.

The Company's future plans include acquiring  additional web content through the
purchase of existing  schools and/or courses,  appropriate  acquisitions and the
development of international markets as well as executing our marketing plan for
national growth.

As one of the first into this marketplace,  with a fully  interactive,  Internet
based offering,  consisting of live chat rooms and audio/video  feeds to support
our test  preparation/training  materials,  the  Company  expects  to be able to
create a real user community. The Company will attempt to develop a user base of
people  with  common  interests  and  the  Company  will  attempt  to  secure  a
significant  share of this  multi  billion-  dollar  market.  In  addition,  the
expected demographics of our users are expected to be an attraction to potential
advertisers who may be willing to pay us to advertise on our web site.

Employees

As of December 31, 1999, the Company had 27 employees, 7 of whom were classified
as full-time and 20 of whom were classified as part-time.  Most of the Company's
part-time employees are teachers in child care programs and Company-owned family
centers.  Two of the  full-time  employees  work  exclusively  on the  Company's


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website.  None of the  Company's  employees are  represented  by a union and the
Company considers its relationship with its employees to be good.


Reports to Security Holders

The  Company's  annual report will contain  audited  financial  statements.  The
Company is not required to deliver an annual report to security holders and will
not  voluntarily  deliver a copy of the annual  report to the security  holders.
Prior to this form  being  filed  there  were no other  disclosure  forms  filed
regarding the Company's financial and management situation.  The Company intends
to,  from this  date  forward,  file all of its  required  information  with the
Securities and Exchange Commission ("SEC"). The Company plans to file its 10KSB,
10QSB, and all other forms that may be or become  applicable to the Company with
the SEC.

The public may read and copy any  materials  that are filed by the Company  with
the  SEC  at  the  SEC's  Public  Reference  Room  at 450  Fifth  Street,  N.W.,
Washington,  D.C. 20549.  The Public may obtain  information on the operation of
the Public Reference Room by calling the SEC at  1-800-SEC-0330.  The statements
and forms filed by the Company with the SEC have also been filed  electronically
and are available for viewing or copy on the SEC  maintained  Internet site that
contains  reports,  proxy and  information  statements,  and  other  information
regarding  issuers that file  electronically  with the SEC. The Internet address
for this site can be found at http://www.sec.gov.  Additional information can be
found concerning the company on the Internet at http://www.learnersworld.com.

ITEM 2.           DESCRIPTION OF PROPERTY

In December  1996,  the Company  acquired  three  children's  care and  learning
facilities from three affiliated  corporations for a four year note of $775,000,
bearing interest at the rate of 7% per annum, with monthly payments beginning on
January 1, 1998. The Company's  facilities are at the following locations in the
New York metropolitan area: (i) 369 Avenue U, Brooklyn, New York, established in
May 1993; (ii) 1535 First Avenue,  New York, New York,  established in September
1994,  the  Company  has  since  moved  the  location  of this  facility  to 432
Lakeville,  Lake Success, New York 11402; and (iii) 208-34 Cross Island Parkway,
Bayside, New York, established in June 1994.

ITEM 3.           LEGAL PROCEEDINGS

The Company is currently not a party to any pending legal proceeding.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted  during the fiscal year covered by this Report to a vote
of security holders, and therefore, this item is inapplicable.




                      [THIS SPACE INTENTIONALLY LEFT BLANK]



                                        8


<PAGE>



                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company is currently traded on the Pink Sheets, and was previously traded on
the OTC BB under the symbol LWRD.OB.  The Company intends to reapply to trade on
the OTC BB upon  completion  and  approval  of its Form  10-SB  filing  with the
Securities and Exchange Commission.  The table below sets forth the high and low
sales prices for the  Company's  Common Stock for each quarter of 1998 and 1999.
The Company's stock did not trade prior to January 1, 1998. The quotations below
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions:

               Quarter           High              Low
               -------           ----              ---
1998           First(1)          $1.25             $1.00
               Second            $6.00             $1.06
               Third             $5.00             $0.25
               Fourth            $0.63             $0.25

               Quarter           High              Low
               -------           ----              ---
1999           First             $0.28             $0.25
               Second(2)         $9.80             $4.50
               Third             $8.19             $1.88
               Fourth            $2.31             $0.56
2000           First             $0.88             $0.11

Record Holders

As of March 27, 2000, there were approximately 29 shareholders of record holding
a total of 10,270,007  shares of Common  Stock.  The holders of the Common Stock
are entitled to one vote for each share held of record on all matters  submitted
to a vote of stockholders. Holders of the Common Stock have no preemptive rights
and no right to convert their Common Stock into any other securities.  There are
no redemption or sinking fund provisions applicable to the Common Stock.

--------
     (1) The Company's stock did not trade until January of 1998.
     (2) Price reflects a 30 to 1 reverse split effected on March 1st, 1999.

                                        9


<PAGE>



Dividends

The Company has not declared any cash  dividends  since  inception  and does not
anticipate  paying any  dividends  in the  foreseeable  future.  The  payment of
dividends is within the  discretion of the Board of Directors and will depend on
the Company's earnings,  capital  requirements,  financial condition,  and other
relevant  factors.  There are no restrictions that currently limit the Company's
ability to pay dividends on its Common Stock other than those generally  imposed
by applicable state law.

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

The  Company  plans to  continue  its  expansion  into the child  care and adult
education  fields.  This  will  be  accomplished  through  the  building  of new
locations,  the  acquisition  of suitable  locations  and its  venture  onto the
Internet with its Internet based  educational,  test  preparation and vocational
training web site.

A.       Results of Operations
Gross Income

Gross income for the year ended December 31, 1999  increased to $1,303,239  from
$1,253,266 for the year ended December 31, 1998, an increase of 4%. The increase
in gross  income is  primarily  attributable  to an increase in tuition and fees
collected from an increase in students enrolled.

The average  number of students  enrolled for the year ended  December 31, 1999,
was an estimated  295  compared to 269 students for the year ended  December 31,
1998.

The Company  charged an average  tuition of $274 per student each quarter  which
generated a total of $323,063  in tuition for the year ended  December  31, 1999
compared to an average  tuition of $218 per student each quarter which generated
a total of $233,684 in tuition for the year ended December 31, 1998.

The remaining gross income generated in December 31, 1999 and 1998 were $980,176
and $1,019,582, respectively. The most significant component of gross income for
the years ended December 31, 1999 and 1998 was gross income  generated from play
areas.  The Company  generated a total of $904,250 in gross  income  relating to
play areas for the year ended  December  31, 1999  compared to $936,714  for the
year ended  December 31,  1998,  a decrease of $32,464 or 3.5%.  The decrease in
gross  income  generated  by the play  areas  was  attributable  to the  Company
focusing on recruiting additional students for the schools.

The remaining miscellaneous gross revenues relating to various fees for the year
ended  December  31,  1999 was  $75,926  compared  to $82,868 for the year ended
December 31, 1998.

Losses

Net losses for the year ended  December  31, 1999  increased  to  $423,750  from
$195,316 for the year ended December 31, 1998, an increase of 117%. The increase
in  losses  was   attributable   primarily   to  an   increase  in  general  and
administrative expenses.

                                       10


<PAGE>



Due to continued  expansion of the online testing website the Company expects to
continue to incur  losses at least  through  2000 and there can be no  assurance
that the  Company  will  achieve or maintain  profitability  or that its revenue
growth can be sustained in the future.

Expenses

General  and  administrative  expenses  for the year ended  December  31,  1999,
increased to $704,978  from  $552,977 for the year ended  December 31, 1998,  an
increase of 27%.  The  increase in general and  administrative  expenses was the
result of an increase in expenses  related to the  development  of the Company's
online testing website.  The Company  estimates that general and  administrative
expenses  attributable to the start up of its test preparation  website consumed
approximately  20-30% of all general  and  administrative  expenses  for periods
presented.  Development  and  maintenance  of the  website  will  be an  ongoing
expense. However, with the website having become operational in January of 2000,
it is expected  that there may be a lesser amount  devoted to site  development,
but an increase in costs  associated  with site  maintenance.  At this time, the
Company is unable to determine whether ongoing website maintenance costs will be
greater or less than any corresponding savings in development costs. Because the
website has just become  operational  in January of 2000, the Company is unable,
with any degree of accuracy,  to determine when, if ever, the Company will begin
to  recognize  revenue  from  its  test  preparation   products.   Depreciation,
amortization  and interest  expenses  for the years ended  December 31, 1999 and
1998 were $153,496 and $150,228, respectively.

Cost of Sales

The cost of sales for the year ended December 31, 1999 was $868,515  compared to
$744,277 for the year ended December 31, 1998. The increase in the cost of sales
was  primarily  attributable  to an increase in labor costs.  Cost of sales as a
percentage  of sales for December 31, 1999 and 1998  respectively,  were 67% and
59%.

B.       Liquidity and Capital Resources

At December  31,  1999,  the Company  had current  assets of $103,570  and total
assets of  $1,281,777  as compared to $38,903 and  $1,135,560  for  December 31,
1998. The Company had a net working  capital deficit of $357,517 at December 31,
1998 compared to net working capital of $36,991 at December 31, 1999.

Cash flow used in operations  was $222,119 for the year ended December 31, 1999,
and $173,572 for the year ended  December 31,  1998.  Cash flow  generated  from
financing  activities  was  $430,750  for the year ended  December  31, 1999 and
$230,007 for the year ended December 31, 1998.

The Company's cash flows fluctuate during the year due to the seasonal nature of
the Company's business. Traditionally,  enrollments are higher during the period
of the year when  schools  ore in  regular  session  (September-May)  with lower
enrollments during the summer months  (June-August).  The decline in enrollments
during the summer is offset to some degree by the  revenues  from the  Company's
summer camps.

                                       11


<PAGE>



C.       Income Tax Expense

The Company has an income tax benefit  resulting  from net  operating  losses of
$423,750. Depending on the future results of the operations of the company, this
potential tax benefit may or may not be usable.  This benefit is not  recognized
in the  financials  because the amount of the  benefit  that may  ultimately  be
recognized is uncertain.

D.       Impact of Inflation

The Company  believes that  inflation has had a negligible  effect on operations
over the past three years. The Company believes that it can offset  inflationary
increases  in the cost of  materials  and  labor  through  increased  sales  and
improved operating efficiency.

E.       Capital Expenditures

The Company made no significant  capital  expenditures  on property or equipment
for the years ended December 31, 1999 or 1998.

F.    Trends, Events, Uncertainties that may have a Material Effect on Liquidity
Risk of Lawsuits

Inherent in the  business of  education  and caring for children in a commercial
business is the risk of  lawsuits  for alleged  injuries  to the  children.  The
Company has an insurance  policy with liability  limits of $3,000,000  aggregate
limit which includes $1,000,000 in personal injury liability coverage to protect
the Company from legal claims to the amount of the policy  coverage for risks as
specified in the policy of insurance.  Although  currently  there are no pending
lawsuits against the Company,  there is no assurance that there will not be such
lawsuits in the future and that the Company  will not incur losses as the result
of such  lawsuits  in excess of its  insurance  coverage.  Lawsuits  against the
Company will tend to increase  operating  expenses and lower the  potential  for
profitability, as well as cause possible harm to the Company's reputation.

G. Trends, Events,  Uncertainties that may have a Material Effect on Net Revenue
or Income  Year 2000 The Year 2000 Issue and the Nature and  Effects of the Year
2000 on Information  Technology  (IT) and Non- IT Systems was a concern prior to
January 1, 2000. As of March 31, 2000,  the Company had  experienced no problems
as a result of the Year 2000 Issue.

Labor Related Risks

The Company depends extensively on the availability,  quality and reliability of
teachers,  instructors,  tutors and  care-givers  which it  utilizes  to provide
children's  educational  and day care  services.  There is no assurance that the
Company will have an adequate  supply of qualified  personnel at acceptable cost
to operate a  profitable  business.  The  Company is subject to all of the risks
inherent in a business that utilized skilled labor, including but not limited to
strikes,  disadvantageous  collective  bargaining  agreements,  labor showdowns,
unavailability of qualified employees,  worker's compensation claims,  increases
in worker's

                                       12


<PAGE>



compensation and other insurance premiums (or unavailability of such insurance),
wage disputes,  discrimination claims,  wrongful termination claims, the loss of
qualified  employees and inability to replace them,  and related  risks.  At the
current time, none of the Company's employees are unionized.  The risks may also
inhibit the  Company's  ability to expand or establish new  facilities.  If such
labor issues  should  arise the Company will attempt to remedy the  situation by
using temporary  employees and its current staff to temporarily  cover shortages
until additional qualified permanent employees can be found.

Uncertainties Regarding Market Acceptance of New Services

Although the Company's  management  will attempt to complete the market research
necessary  to  determine  whether  there will be  sufficient  demand for its new
Internet based services,  it is possible that the Company will decide to offer a
service that will be rejected by its target customers. The inability to amortize
development  marketing  and sales  support  costs  could  adversely  affect  the
financial  condition  and  operating  results  of  the  Company.  There  remains
uncertainty  regarding  the  Internet  as a viable  distribution  method  of the
Company's  products.  There is a risk that the customers of the Company will not
use the Internet for their test  training and would rather  continue to use more
traditional training methods.

Going Concern

The Company's  auditors have expressed an opinion as to the Company's ability to
continue as a going concern as a result of an accumulated deficit of $882,267 as
of December 31, 1999 compared to a deficit of $458,517 at December 31, 1998. The
Company's  ability to continue  as a going  concern is subject to the ability of
the Company to obtain a profit and /or  obtaining  the  necessary  funding  from
outside sources. Management is committed to taking the necessary steps to ensure
the Company remains a going concern.  Management's plan to address the Company's
ability to continue  as a going  concern,  includes:  (1)  obtaining  additional
funding from the sale of the Company's  securities;  (2) increasing  sales;  (3)
obtaining loans and grants from various financial  institutions  where possible.
Although  management  believes  that it will be  able to  obtain  the  necessary
funding  to allow the  Company to remain a going  concern  through  the  methods
discussed  above,  there can be no  assurances  that  such  methods  will  prove
successful.

ITEM 7.           FINANCIAL STATEMENTS

The Company's financial  statements for the fiscal years ended December 31, 1999
and 1998 are attached hereto as pages F-1 through F-16




                      [THIS SPACE INTENTIONALLY LEFT BLANK]




                                       13

<PAGE>








                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                         AUDITED CONSOLIDATED FINANCIAL
                                   STATEMENTS
                            DECEMBER 31, 1999 & 1998








<PAGE>




                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                                   YEARS ENDED
                            DECEMBER 31, 1999 & 1998


                                    CONTENTS

                                                                           Page

Independent Auditors' Report                                              F - 1

Consolidated Balance Sheets                                               F - 2

Consolidated Statements of Operations                                     F - 3

Consolidated Statements of Stockholders' Equity (Deficit)                 F - 4

Consolidated Statements of Cash Flows                                     F - 5

Notes to Consolidated Financial Statements                        F - 6 - F - 16








<PAGE>




                   [LETTERHEAD OF SELLERS & ASSOCIATES P.C.]



                          INDEPENDENT AUDITORS' REPORT


Learner's World, Inc.
and Subsidiaries

To The Stockholders

We have audited the accompanying consolidated balance sheets of Learner's World,
Inc.  and  Subsidiaries  as of  December  31,  1999 and  1998,  and the  related
consolidated  statements of operations and stockholders'  equity (deficit),  and
consolidated  statements  of cash flows for each of the years then ended.  These
consolidated  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 audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of Learner's World,
Inc.and  Subsidiaries  as of December 31, 1999 and 1998,  and the results of its
operations  and its cash flows for each of the years  then  ended in  conformity
with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  disclosed  in the  financial
statements  and notes to the  financial  statements,  the Company  has  suffered
significant losses. These conditions raise substantial doubt about the Company's
ability to continue  as a going  concern.  Management's  plans  regarding  these
matters are  described in the notes to the financial  statements.  The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


  /S/ Sellers & Associaates, P.C.

Sellers & Associates, P.C.
March 23, 2000
Ogden, Utah

                                       F-1

<PAGE>



<TABLE>
<CAPTION>
                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                       AUDITED CONSOLIDATED BALANCE SHEET
                               AS OF DECEMBER 31,

                                                                        1999                    1998
                                                                ==================       =================
                                     ASSETS
<S>                                                           <C>                    <C>
Current assets
     Cash                                                      $            23,715     $             2,195
     Receivables                                                             9,855                  36,708
     Receivable from shareholders                                           70,000                  -
                                                                ------------------       -----------------
         Total current assets                                              103,570                  38,903
                                                                ------------------       -----------------
Property and equipment, net of
    accumulated depreciation                                               992,499               1,041,526
                                                                ------------------       -----------------
Other assets
     School licensing                                                        1,750                   2,917
     Security deposits                                                      52,214                  52,214
     Internet website                                                      131,744
                                                                ------------------       -----------------
         Total other assets                                    $           185,708     $            55,131
                                                                ------------------       -----------------
         Total assets                                          $         1,281,777     $         1,135,560
                                                                ==================       =================



           LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities

     Accounts and notes payable                                $            71,464     $           114,458
     Taxes payable                                                          63,352                  64,399
     Current portion of long term debt - non stockholders                   16,296                  25,973
                                                                ------------------       -----------------
         Total current liabilities                                         151,112                 204,830
                                                                ------------------       -----------------

Long-term liabilities

     Term debt - long term portion - non stockholders                       16,753                  36,599
     Due to stockholders                                                 1,076,921               1,251,648
                                                                ------------------       -----------------
         Total other liabilities                                         1,093,674               1,288,247
                                                                ------------------       -----------------

         Total liabilities                                               1,244,786               1,493,077
                                                                ------------------       -----------------

Stockholders' equity (deficit)
     Common stock, $.0001 par value
         20,000,000 shares authorized with 9,776,250 and
         140,000 shares issued and outstanding at
         December 31, 1999 and 1998 respectively                               978                     420
     Paid in capital                                                     1,197,343                 100,580
     Stock issued not paid                                               (279,063)                     -
     Accumulated (deficit)                                               (882,267)               (458,517)
                                                                ------------------       -----------------
         Total stockholders' equity (deficit)                               36,991               (357,517)
                                                                ------------------       -----------------
         Total liabilities and stockholders' equity (deficit)  $         1,281,777     $         1,135,560
                                                                ==================       =================
</TABLE>




                                      F-2

<PAGE>



<TABLE>

                                         LEARNER'S WORLD, INC.
                                           AND SUBSIDIARIES
                              AUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                                   FOR THE YEARS ENDING DECEMBER 31,


<CAPTION>


                                                              1999                 1998
                                                        ==============       ==============
<S>                                                   <C>                  <C>
Revenue                                                $     1,303,239      $     1,253,266

Expenses

     Cost of sales                                             868,515              744,277

     General and administrative                                704,978              552,977

     Depreciation, amortization and interest                   153,496              150,228
                                                        --------------       --------------
Income (loss) from continuing operations before

 income taxes                                                (423,750)            (194,216)

Provision for income taxes                                      -                     1,100
                                                        --------------       --------------
Net (loss)                                             $     (423,750)      $     (195,316)
                                                        ==============       ==============


Income (loss) per weighted-average share of common
 stock outstanding

   Basic net (loss) per share                          $        (0.05)      $        (1.39)
                                                        ==============       ==============
Weighted-average number of common stock outstanding          7,950,449              140,000
                                                        ==============       ==============
</TABLE>



                                      F-3

<PAGE>



<TABLE>
                                               LEARNER'S WORLD, INC.
                         AUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                  For the Years Ended December 31, 1999 and 1998

<CAPTION>

                                                Common Stock
                                       ===============================                Stock                                Net
                                                                      Paid in         Issued         Accumulated         Equity
                                         Shares         Amount        Capital        Not Paid         (Deficit)         (Deficit)
                                       ===========  ============  ==============  ==============  ================= ===============
<S>                                    <C>           <C>           <C>           <C>              <C>               <C>

Balance as of December 31, 1997          140,000     $      14     $    100,986   $     -            $ (263,201)     $    (162,201)


Net (loss) for the year ended
  December 31, 1998                                                                                    (195,316)          (195,316)

                                       =========     =========     ============    ============      ===========         ==========
Balance as of December 31, 1998          140,000     $      14     $    100,986   $     -           $  (458,517)     $    (357,517)

Shares issued for debt conversion      6,000,000           600          119,400                                            120,000

Shares issued for services               180,000            18           13,782                                             13,800

Shares issued with commitment to pay   3,456,250           346          863,717     (864,063)                                    -

Cash received in 1999 on stock issued                                                515,000                               515,000

Cash received in 2000 on stock issued                                                 70,000                                70,000

Accrued interest eliminated in
  modifying the promissory note due
  to shareholders                                                        99,458                                             99,458

Net (loss) for the year ended
  December 31, 1999                                                                                   (423,750)           (423,750)
                                       ==========    =========    =============    ============    =============         ==========
Balance as of December 31, 1999        9,776,250     $     978    $   1,197,343   $ (279,063)      $  (882,267)      $      36,991
                                       ==========    =========    =============    ============    =============         ==========
</TABLE>




See Accompanying Independent Auditor's Report to the Financial Statements

                                                       F-4


<PAGE>



<TABLE>
<CAPTION>

                                           LEARNER'S WORLD, INC.
                                            AND SUBSIDIARIES
                               AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
                                    FOR THE YEARS ENDING DECEMBER 31,


                                                                             1999               1998
                                                                      ================    =================
<S>                                                                 <C>                 <C>
Cash Flows From Operating Activities
     Net (loss)                                                      $     (423,750)     $     (195,316)
                                                                      -------------       -------------

Adjustments To Reconcile Net (Loss) To Net Cash
   Used In Operating Activities
      Depreciation                                                          104,394              84,550
      Amortization                                                            1,167                 583
      Stock issued for services                                              13,800               -
      Interest eliminated and reclassified to paid in capital                99,458               -
      Decrease (Increase) in receivables                                     26,853            (29,998)
      Decrease in security deposit                                          -                     4,155
      (Decrease) in accounts and notes payable                             (42,994)            (73,462)
      Increase (decrease) in taxes payable                                  (1,047)              35,916
                                                                      -------------       -------------
                 Net Adjustment                                             201,631              21,744
                                                                      -------------       -------------
                 Net Cash (Used) In Operating Activities                  (222,119)           (173,572)
                                                                      -------------       -------------

Cash Flows From Investing Activities
      Purchase of equipment                                                (55,367)            (64,027)
      Purchase of school licensing                                          -                   (3,500)
      Internet website                                                    (131,744)               -
                                                                      -------------       -------------
                 Net Cash (Used) By Investing Activities                  (187,111)            (67,527)
                                                                      -------------       -------------
Cash Flows From Financing Activities
      (Decrease) Increase in notes and loans payable
        non stockholders                                                   (29,523)              17,093
      (Decrease) Increase in notes and loans payable
        stockholders                                                       (54,727)             212,914
      Proceeds from issuance of capital stock                               515,000               -
                                                                      -------------       -------------
                 Net Cash Provided By Financing Activities                  430,750             230,007
                                                                      -------------       -------------

Net Increase (Decrease) In Cash                                              21,520            (11,092)

Cash - Beginning                                                              2,195              13,287
                                                                      -------------       -------------
Cash - Ending                                                        $       23,715     $         2,195
                                                                      =============       =============
Other Information

       Interest paid in cash                                         $        2,727     $        10,845
                                                                      =============       =============
Non Cash Items

       Stock issued for services                                     $       13,800     $         -
       Stock issued for debt conversion                                     120,000               -
       Debt to shareholders contributed to paid in capital           $       99,458     $         -
</TABLE>





                                      F-5




<PAGE>




                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 1 - Summary of Significant Accounting Policies

         Principles of Consolidation

          The  consolidated   financial   Statements  include  the  accounts  of
          Learner's  World,  Inc.  and its wholly owned  subsidiaries:  Avenue U
          Playrobics, Inc., Baybridge Playrobics, Inc., and Eastside Playrobics,
          Inc. Eastside  Playrobics,  Inc.  discontinued  operations in 1997 and
          continues to exist as a legal  entity with no  activity.  Intercompany
          activity has been eliminated in consolidation.

         Nature of Operations

         The Company provides learning, daycare and entertainment facilities for
         children in New York City.

         Receivable From Stockholders

         Stock issued and not paid is reported as a reduction  to  stockholders'
         equity; that is, except for payments actually received in the following
         year before the date of the  auditors'  report.  Such amounts  actually
         received  are then  reported as a current  asset as a  receivable  from
         stockholders.

         Property and Equipment

         Property,  equipment,  and leasehold  improvements  are valued at cost.
         Depreciation  is provided by use of the  straight-line  method over the
         shorter of estimated  useful lives or lease terms of the assets.  Fully
         depreciated  assets  are  written  off the year  after  they are  fully
         depreciated or amortized.

         Upon the sale or  retirement of property and equipment the related cost
         and accumulated  depreciation  are eliminated from the accounts and the
         resulting   gain  or  loss  is   recorded.   Repairs  and   maintenance
         expenditures  that do not  extend  the  useful  lives are  included  in
         expense during the period they are incurred.

         Statement of Cash Flows

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

                                       F-6


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 1 - Summary of Significant Accounting Policies - Continued

         Net Income (Loss) Per Share

         Basic net income or loss per share is computed  by dividing  net income
         or loss by the weighted average number of common shares outstanding.

         Revenue Recognition

         Revenue is recognized from sales and services when they are performed.

         Income Taxes

         The Company  has adopted the  provisions  of  statements  of  Financial
         Accounting  Standards  No. 109,  "Accounting  for Income  Taxes," which
         incorporates the use of the asset and liability  approach of accounting
         for  income  taxes.  The  asset and  liability  approach  requires  the
         recognition  of  deferred  tax assets and  liability  for the  expected
         future  consequences  of temporary  differences  between the  financial
         reporting basis and tax basis of assets and liabilities.

         No income tax returns have been filed since June 30,  1995.  The income
         tax year end was changed  from June 30 to December  31,  making a short
         tax year end from July 1, 1996 to December 31, 1996.

         Use of Accounting Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  effect  the  reported  amounts  of  assets  and
         liabilities and disclosures of contingent assets and liabilities at the
         date of the financial  statements and the reported  amounts of revenues
         and expenses during the reporting  period.  Actual results could differ
         from those estimates.

         Impairment of Long-Lived Assets

         It is the  Company's  policy  to  periodically  evaluate  the  economic
         recover  ability of all of its long-lived  assets.  In accordance  with
         that  policy,  when  the  Company  determines  that an  asset  has been
         impaired,  it recognizes the loss on the basis of the discounted future
         cash flows expected from the assets.

                                      F-7


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 1 - Summary of Significant Accounting Policies - Continued

         Fair Value of Financial Instruments

         The methods  and  assumptions  used to estimate  the fair value of each
         class of financial instrument are as follows:

         Cash and cash  equivalents,  receivables,  accounts and notes  payable,
         taxes  payable and current  portion  term debt - non  stockholders  and
         stockholders:

                  The carrying  amounts  approximate  fair value  because of the
                  short maturity of these instruments.

         Other assets:

                  The carrying amounts of school licensing and security deposits
                  approximate  fair value  because the  Company  uses the school
                  licensing  to run a school at one location and it is amortized
                  over the life of the school  lease and the  security  deposits
                  are refundable.

                  The carrying  amounts of the  internet  website is at cost and
                  may or may not  approximate  fair value because the website is
                  in  late  developmental  stage  and is  unproven.  It  will be
                  amortized  over its estimated  useful life or 15 years,  which
                  ever is shorter.

         Long-term liabilities:

                  The carrying amounts of the Company's  borrowings (See notes 3
                  &  4),  which  is  debt  due  to  non   stockholders   and  to
                  stockholders,  approximate  fair value  because  the  interest
                  rates  are  either  fixed  or vary  based  on  floating  rates
                  identified by reference to market rates.  The carrying amounts
                  and fair values of long-term debt are  approximated  to be one
                  and the same at December 31, 1999 and 1998.

                                       F-8


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 2 - Property and Equipment
<TABLE>

         Property  and  equipment,  at cost,  are  summarized  December  31,  as
follows:
<CAPTION>

                                                                                    Estimated
                                                 1999               1998           Useful Lives
                                           --------------      --------------      ------------
<S>                                        <C>               <C>                  <C>
         Machinery and equipment            $    732,949      $   716,640           3 -  7 years
         Furniture and fixtures                   96,417           96,417                7 years
         Leasehold improvements                  455,161          416,103           3 - 18 years
                                             ------------      ------------
                                               1,284,527        1,229,160
         (Less) accumulated depreciation        (292,028)        (187,634)
                                             ------------      ------------
                                             $   992,499       $1,041,526
                                             ============      ===========
</TABLE>

Note 3 - Due to Stockholders

         Three major  stockholders  have financed a  significant  portion of the
         Company's  activities and operations.  The promissory note for $775,000
         referred to below, bore interest at 7% per annum,  beginning January 1,
         1998. All other amounts due to  stockholders  are not interest  bearing
         obligations.  All obligations are presented in the financial statements
         as long-term debt.

         On October 26, 1999,  the $775,000  promissory  note was modified as to
         the payment. As modified, there is no back interest accruable or due at
         any time before  December  31,  1999.  Interest  at 7% simple  interest
         begins January 1, 2000 with monthly payments of interest only beginning
         March 1,  2000.  Beginning  with  March 1,  2001  monthly  payments  of
         interest and  principle  in the amount of $11,918 per month  thereafter
         until  December 31, 2007 at which time the entire unpaid  principle and
         interest, if any, shall be paid in full.

         As of October 26, 1999,  there was $99,458 accrued and unpaid interest.
         The  entire  $99,458  accrued  interest  eliminated  by  modifying  the
         promissory note was credited to equity into Paid in Capital.

                                       F-9


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 3 - Due to Stockholders - Continued
<TABLE>

         At December 31, 1999 and 1998,  the following  amounts were owed to the
         three major stockholders:
<CAPTION>

                                                                                 1999               1998
                                                                             -------------      ------------
<S>                                                                        <C>                 <C>
         Note payable due to Salvatore Casaccio,
         Antonio Casaccio, and Agrippino Casaccio from
         the sale of their stock to the Company of Avenue U
         Playrobics, Inc., Baybridge Playrobics, Inc. and Eastside
         Playrobics, Inc. on December 17, 1996 for $775,000.
         The acquisition of the stock of the subsidiaries by the
         Company is accounted for by the purchase method of
         accounting.  Secured by stock of the Corporations sold
         to the Company.                                                     $   775,000        $  775,000

         Accrued interest on the note payable of $775,000                           -               54,250

         The remaining balance due to stockholders are loans and
         advances as needed and are unsecured and bear no
         interest and has no scheduled repayment.                                301,921           422,398
                                                                              ------------      -----------
         Total                                                                 1,076,921         1,251,648

         (Less) Current portion due to Stockholders                            (   -    )        (  -    )
                                                                              -----------       -----------
         Total Long-term debt due to Stockholders                             $1,076,921        $1,251,648
                                                                              ===========       ===========
</TABLE>

         Maturities  of long-term  debt due to  stockholders  for the five years
         after 1999 are:

                  December 31, 2000                    $      -
                               2001                       75,946
                               2002                       97,162
                               2003                      104,186
                               2004                      111,718
                               2005 & After              385,988
                                                      ------------
                                     Total           $   775,000
                                                       ===========



                                      F-10


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 4 - Term Debt - Non Stockholders

         Term Debt consists of the following at December 31, 1999

         Payable to a supplier, secured by selected equipment.
         Monthly payment of $1,275 for 60 months with 24
         months remaining at 15.4% interest rate                    $    26,192

         Payable to a private party, guaranteed by a major
         stockholder.  Monthly payment of $1,410 for 24
         months with 9 months remaining at 1.5% over
         prime interest rate.                                             6,857
                                                                   -------------
         Total Term Debt                                                  33,049

         (Less) Current Portion - Non Stockholders                      (16,296)
                                                                   -------------
         Total Long-Term Debt - Non Stockholders                    $    16,753
                                                                     ===========

         Maturities  of  long-term  debt - non  stockholders  for the five years
         after 1999 are:

                       2000                     $      16,296
                       2001                            16,753
                       2002                                -
                       2003                                -
                       2004                                -
                       2005 & After                        -
                                                 ------------
                       Total                    $      33,049
                                                =============

Note 5 - Related Party Transactions

         As  indicated  in  Note 3 -  Notes  Payable  due to  Stockholders,  the
         Company's  major  stockholders  sold the Company their interests in the
         subsidiaries  of the  Company.  They also have  financed a  significant
         portion of the Company's  activity and  operations.  Should these major
         stockholders  withdraw their support to the Company,  the Company would
         most likely not survive.  Management  indicates the major  stockholders
         intend to continue their support of the Company.

                                      F-11


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 6 - Capital Stock

         On  February   25,   1999,   the  Company   amended  its   articles  of
         incorporation.  In  conjunction  with  this  change,  the  articles  of
         incorporation,  as  amended,  made  a 30  for 1  reverse  stock  split,
         effective March 1, 1999.

         As a result,  the 4,200,000  shares issued and  outstanding at December
         31,  1998  is   effectively   changed  to  140,000  shares  issued  and
         outstanding  at  March 1,  1999.  This  reverse  stock  split  has been
         recognized  in the  financial  statements  retroactive  to December 31,
         1997.

         On March 2, 1999, the Company issued its officers and directors a total
         of  6,000,000  shares of common stock at $.02 par share in exchange for
         $120,000 in debt.

         On March 18,  1999,  the  Company  issued  new  stock  under a Rule 504
         Regulation D offering. The issuance of 3,456,250 shares were issued for
         $864,063,  of which $515,000 has been received as of December 31, 1999.
         Another  $70,000  has been  received  since  December  31,  1999 and is
         reflected as current accounts receivable in the financial statements.

         On March  18,  1999,  the  Company  issued  50,000  shares of stock for
         services valued at $12,500.

         On June 10,  1999,  the  Company  issued  130,000  shares  of stock for
         services valued at $1,300.

Note 7 - Commitments and Contingencies

         As of December  31,  1999,  the Company had entered into leases for its
         premises in  Brooklyn,  Queens,  and Long Island,  New York.  The lease
         commitment on Brooklyn is for 10 years to March 25, 2003 with an option
         to  lease  5  additional  years  at the  Company's  option.  The  lease
         commitment  on Queens is for 20 years to May 31, 2014.  The Long Island
         lease  commitment  is for 3 years to June 30,  2001  with an  option to
         lease one additional year at the Company's option.

                                      F-12


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 7 - Commitment and Contingencies - Continued
<TABLE>
         Future minimum rental payments  required under these leases for each of
         the next five years and in the aggregate, after 1999 are as follows:
<CAPTION>

                                                                                                  Long
                                    Total             Brooklyn             Queens                Island
                                    -----             --------             ------                ------
<S>                          <C>                 <C>                   <C>                  <C>
             2000              $   288,012         $   125,127          $    129,885         $    33,000
             2001                  282,959             131,379               135,080              16,500
             2002                  278,384             137,946               140,438                 -
             2003                  181,051              34,902               146,149                 -
             2004                  151,948                 -                 151,948                 -
             2005-2015           1,801,399                 -               1,801,399                 -
                                -----------          -----------         -----------           ------------
             Total             $ 2,983,753          $  429,354           $ 2,504,899         $    49,500
                                ===========          ===========         =============         ===========
</TABLE>

         The  total  rent  was   $259,326   and   $277,452  for  1999  and  1998
         respectively.

Note 8 - Income Taxes
<TABLE>
<CAPTION>
         (Loss) before income taxes at December 31, 1999
         and 1998 consisted of:                                        1999              1998
                                                                  --------------    --------------
<S>                                                              <C>               <C>
         Total                                                    $   (423,000)     $  (194,000)
                                                                    ============      ===========

         The provision for income taxes at December 31, 1999
         and 1998 consisted of:

         Current income taxes                                     $        -        $     1,100
                                                                   -------------     -------------
         Total                                                    $        -        $     1,100
                                                                  ==============     =============
</TABLE>









                                      F-13


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


Note 8 - Income Taxes - Continued

         The  provision  for income taxes is different  from that which would be
         obtained by applying the  statutory  Federal and state income tax rates
         to income (loss) before income taxes. The items causing this difference
         at December 31, 1999 and 1998 are:

                                                   1999              1998
                                             ---------------   --------------
         Income taxes                        $      71,900     $    26,700

         Change in valuation allowance             (71,900)        (26,700)
                                             --------------     ------------
         Total                               $         -       $        -
                                             ==============     ============

         The tax effects of temporary  differences
         that give rise to significant portions of
         the deferred tax assets and  deferred  tax
         liabilities at December 31, 1999 and 1998 are:

                                                      1999              1998
                                                 -------------      ------------
         Deferred tax assets:
           Net operating loss carryforward       $   148,700      $   76,700
                                                  -----------      ----------

         Total gross deferred tax assets             148,700           76,700
         (Less) valuation allowance                 (148,700)         (76,700)
                                                  -----------       ---------

         Net deferred tax assets                         -                -

         Deferred tax liabilities:                       -                -
                                                 ------------      -----------

         Total gross deferred tax liabilities           -                 -
                                                 ------------      -----------

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

         The valuation allowance for deferred tax assets as of December 31, 1999
         and 1998 are $148,700 and $76,700  respectively.  The net change in the
         total  valuation  allowance  for the years ended  December 31, 1999 and
         1998 was $71,900 and $26,700 respectively.

         During 1999, the Company made no cash payments on income taxes.

                                      F-14


<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
               NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

Note 8 - Income Taxes - Continued

         As of December  31,  1999,  the Company  has  available  for income tax
         purposes  approximately  $782,800 in net operating  loss carry forwards
         which may be used to offset  future  taxable  income.  These loss carry
         forwards  begin to expire in  fiscal  year  2012.  Should  the  Company
         undergo an  ownership  change as defined in Section 382 of the Internal
         Revenue  Code,  the Company's  tax net  operating  loss carry  forwards
         generated  prior to the  ownership  change will be subject to an annual
         limitation  which could  eliminate,  reduce or defer the utilization of
         these losses. Management is of the opinion the ownership changes during
         1999 did not  cause  the  Company  to lose the  utilization  of its net
         operating loss carry forwards.

Note 9 - Receivable From Stockholders

         Stock  issued and not paid at December  31, 1999 and 1998 are  $349,063
         and $-0-  respectively.  Of the  $349,063  unpaid at December 31, 1999,
         $70,000 has been actually paid in 2000 before the financial  statements
         are completed and  released.  Accordingly,  $70,000 of the stock issued
         and not paid has been  classified  as a current  asset as a  receivable
         instead of as a reduction  in the equity  section of the balance  sheet
         like the remaining $279,063 out of $349,063.

Note 10 - Financial Condition and Going Concern

         The accompanying  financial statements have been prepared in conformity
         with  generally  accepted  accounting  principles,   which  contemplate
         continuation  of the  Company  as a  going  concern.  The  Company  has
         sustained substantial operating losses.

         However, stockholders' equity (deficit) has improved from $(357,517) at
         December 31, 1998 to $(36,991)  at December  31,  1999.  Management  is
         seeking  additional  fundings  through  revenues,  borrowings and stock
         issues.  During 1999, the Company raised $528,800 in capital  ($515,000
         in cash and $13,800 in exchange for services). At December 31, 1999, an
         additional  $349,063 is scheduled to be received  during 2000, of which
         $70,000 has been received by March 23, 2000.

         Major  stockholders have forborne demand of cash payments due them from
         the  Company.  One of the major  shareholders  continues to advance the
         Company  cash needed and has  indicated he will  continue  doing so, if
         needed, for the immediate future.

                                      F-15


<PAGE>



Note 10 - Financial Condition and Going Concern - Continued

         Management   continues  raising  money  by  other  avenues,   including
         revenues.  Management is taking  necessary  steps to ensure the Company
         remains a going  concern.  However,  it is doubtful  the Company  could
         absorb  another  loss year like 1999 without  significant  fund raising
         efforts. Since this outcome is uncertain, the Company to remain a going
         concern is also uncertain.

                                      F-16


<PAGE>



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

There were no changes in  accountants or  disagreements  between the Company and
its accountants.

                                    PART III

ITEM  9.          DIRECTORS, OFFICERS, PROMOTERS, AND CONTROL PERSONS

The directors,  executive  officers,  and significant  employees of the Company,
their respective ages, and positions with the Company are as follows:

               Name                Age       Position

      Salvatore Casaccio           46        President, CEO, Secretary, Director
      Agrippino Casaccio           30        Director
      Carmine Notaro               49        Director
      Kevin Gersh                  32        Director
      Dominick J. Morreale         60        Director


Salvatore  Casaccio,  46, is President,  Chief Executive Officer,  Secretary and
Director  of the  Company  and has  held  these  positions  since  1996.  He has
managerial  experience,  including  experience  as the  co-founder  and  current
President of Mineo Foods in Brooklyn, New. From 1988 to present Mr. Casaccio has
owned and operated a J.C. Penney Catalog Stores in Brooklyn, New York. From 1993
to 1996 Mr. Casaccio Served as Chairman of the Board and Chief Executive Officer
for Childrobics,  a New York based family entertainment company. Mr. Casaccio is
a member of the Downtown Brooklyn  Development  Association and a past member of
its  Executive  Committee.  Agrippino  Casaccio,  a director of the Company,  is
Salvatore  Casaccio's  brother  Agrippino  Casaccio,  30,  Director,  has been a
restauranteur in Brooklyn, New York since 1991. He is co- founder,  co-owner and
manager  of Mineo  Foods and has been a  Director  of the  Company  since  1996.
Carmine Notaro, 49, Director, holds Biology and Mathematics degrees from Dowling
College and is a Licensed Real Estate  Broker.  In 1972,  Mr. Notaro moved in to
the  commercial  real estate field  analyzing  and  acquiring  income  producing
properties  for A-1 Realty,  working in this capacity  until 1978 when he became
the Assistant to the President of COR-ACE Realty.  From 1984 to 1990, Mr. Notaro
served in a variety of executive  positions.  He was  President of D'Amro Realty
Corporation, Secretary of Eagle Executive Development Corporation, and a Sponsor
of Wading River Road Associations, acquisitions of Development of Sub-Divisions.
Since 1991,  he has served as President  of both R.O.I.  realty Group and R.G.C.
Construction Group. Mr. Notaro has been a Director of the Company since 1996.

Kevin  Gersh,  32,  Director,  from 1980 to present  he is serving as  Corporate
Treasurer of West Hills Day Camp,  having worked his way in to  management  from
the entry level. Since 1996, Mr. Gersh has been a

                                       14


<PAGE>



partner  in the  Long  Island  Brewing  Company,  a 120  seat  American  cuisine
restaurant.  In 1989,  he co-founded KG  Corporation,  a corporate  catering and
event  planning  company and continues to act as President  today.  In 1995, Mr.
Gersh  founded  a  construction  and  real  estate   management   company,   EKG
Corporation,  and is currently serving as its President. From 1993 to present he
has acted as the  President  and Owner of West Hills Child Care,  Inc.  and West
Hills  Montessori  School,  Inc. Mr. Gersh attended Florida State University and
Western State College. He has been a Director of the Company since 1996.

Dominick J. Morreale,  60, Director,  holds an Ed.D. in Administration from Nova
University,  a Masters in Education and a Bachelors in  Psychology  from Adelphi
University.  Dr.  Morreale  has spent his career as an educator  which  includes
experience as an instructor at the  elementary  and college  levels,  as well as
Principal and Supervisor of Special Education for pre-school through school-aged
handicapped  children.  From 1985 until 1996, Dr.  Morreale  served as Assistant
Superintendent for the South Huntington, New York School District.  Beginning in
1995,  he also served as the Deputy  Superintendent  of the  district  until his
retirement in 1996.  After his  retirement,  Dr. Morreale became Director of the
South  Huntington  Diagnostic  and Treatment  Center and serves in this capacity
concurrently  along with his  directorship  of the  Company  which also began in
1996. Dr.  Morreale has received  numerous  teaching  awards and sits on several
educational boards and committees.

Compliance with Section 16(a) of the Exchange Act

Based  solely upon a review of Forms 3, 4 and 5 furnished  to the  Company,  the
Company is not aware of any person who at any time  during the fiscal year ended
December 31, 1999 was a director,  officer, or beneficial owner of more than ten
percent of the Common Stock of the Company,  and who failed to file, on a timely
basis,  reports required by Section 16(a) of the Securities Exchange Act of 1934
during such fiscal year.

ITEM  10.         EXECUTIVE COMPENSATION

A.       Compensation of Executives

The following  table provides  summary  information for the years 1999, 1998 and
1997 concerning cash and noncash  compensation paid or accrued by the Company to
or on behalf of president. There were no other employees to receive compensation
in excess of $100,000 in those years.

<TABLE>
                                              SUMMARY COMPENSATION TABLE
<CAPTION>

                                      Annual Compensation                                Long Term Compensation
                                                                                 Awards              Payout
                                                                       Restricted     Securities
<S>              <C>        <C>         <C>          <C>              <C>             <C>           <C>        <C>

Name and                                              Other Annual        Stock       Underlying        LTIP         All Other
Principal          Year      Salary       Bonus       Compensation      Award(s)        Options        payout       Compensation
Position                      ($)          ($)            ($)              ($)          SARs(#)          ($)            ($)
Salvatore          1999      100,000        -             -                 -            -               -               -
Casaccio,          1998      100,000        -             -                 -            -               -               -
CEO and            1997      100,000        -             -                 -            -               -               -
Director
---------------  -------- ------------  ---------- ------------------ ------------- ---------------  ----------- ------------------
</TABLE>


--------

     (3)Salaries have not been paid, but are accruing as debt.

                                                          15


<PAGE>



B.       Compensation of Directors

Currently there is no plan to compensate Directors of the Company.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

                  MANAGEMENT

The following  table sets forth  certain  information  regarding the  beneficial
ownership of the stock of the Company as of March 27, 2000, by each  shareholder
who is known by the Company to beneficially  own more than 5% of the outstanding
Common Stock, by each director, and by all executive officers and directors as a
group.
<TABLE>
<CAPTION>

                          Name and Address of Beneficial         Amount and Nature of        Percent
   Title of Class                   Ownership                    Beneficial Ownership        of Class
<S>                      <C>                                       <C>                     <C>

       Common                  Salvatore Casaccio(4)                   2,944,200              29.0%
   Stock, $.0001            President, Secretary, CEO,
     par value                       Director
                                  64 Burton Ave.
                          Staten Island, New York 10309

       Common              Agrippino Casaccio, Director                2,944,200              29.0%
   Stock, $.0001              2040 East 26th Street
     par value               Brooklyn, New York 11229

       Common                Carmine Notaro, Director                    110,790               1.1%
   Stock, $.0001                  34 Garner Lane
     par value               Bayshore, New York 11772

       Common                 Kevin Gersh, Director                       72,718               0.7%
   Stock, $.0001               178 West 19th Street
     par value             Huntington Station, NY 11746
</TABLE>

--------
     (4) Salvatore Casaccio and Agrippino Casaccio are brothers.



                                       16


<PAGE>


<TABLE>

<S>                     <C>                                        <C>                    <C>
       Common             Dominick J. Morreale, Director                  58,093               0.6%
   Stock, $.0001                RFD 59A Smith Lane
     par value              St. James, New York 11780

       Common               All Executive Officers and                 6,130,001              60.5%
   Stock, $.0001               Directors as a Group
     par value                    (Five persons)
</TABLE>


Changes in Control

There are  currently  no  arrangements  in place that will result in a change in
control of the Company.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In December 1996, the Company  acquired all of the  outstanding  shares of three
children's care and learning corporations,  Eastside Playarobics, Inc., Avenue U
Playarobics,   Inc.  and  Baybridge  Playarobics,   Inc.  The  shares  of  these
corporations  were acquired from two directors and majority  shareholders of the
Company,  Salvatore  Casaccio  and  Agrippino  Casaccio,  and a relative  of the
directors,  Antonio  Casaccio.  The shares were acquired for a four year note of
$775,000  bearing  interest  at a rate of 7% per annum,  with  monthly  payments
beginning on January 1, 1998.  On October 26, 1999 a promissory  note was signed
to modify the terms of the note to state that the Company shall have no interest
on the $775,000 through December 1999. On January 1, 2000 the note shall bear an
interest of 7% per annum,  with  monthly  interest  only  payments  beginning on
February 1, 2000 and continuing  through  February 1, 2001.  Beginning  March 1,
2001  monthly  payments of principal  and  interest in the amount of  $11,918.18
shall be payable on the first of each month through  December 31, 2007, at which
time the entire  unpaid  balance  shall be due.  On March 2, 1999,  the  Company
issued the  following 5 directors  and officers of the Company  common shares of
stock at $0.02 per share in exchange for debt:

Name                          Number of Shares Issued      Amount of Debt Paid
-------------------------- ----------------------------- ----------------------
Dr. Dominick J. Morreale            50,000                      $  1,000
Salvatore Casaccio               2,900,000                      $ 58,000
Carmine Notaro                     100,000                      $  2,000
Kevin Gersh                         50,000                      $  1,000
Agrippino Casaccio               2,900,000                      $ 58,000



                                       17


<PAGE>



ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.  Exhibits  required to be attached by Item 601 of  Regulation
         S-B are listed in the Index to  Exhibits  beginning  on page 13 of this
         Form 10-KSB, which is incorporated herein by reference.

(b)      Reports on Form 8-K.  No  report on Form 8K  have been filed during the
         periods covered by this Form 10-KSB.








                 [THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]








                                       18


<PAGE>



                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized, this 14th day of April, 2000

Learner's World, Inc.


                                    /s/ Salvatore Casaccio
                                ------------------------------------------
                                Salvatore Casaccio, President and  Director

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.

Signature                         Title                           Date


  /s/ Salvatore Casaccio          President and Director          April 14, 2000
--------------------------
Salvatore Casaccio

  /s/ Agrippino Casaccio          Director                        April 14, 2000
--------------------------
Agrippino Casaccio


                                  Director                        April 14, 2000
--------------------------
Carmine Notaro


--------------------------        Director                        April 14, 2000
Kevin Gersh


--------------------------        Director                        April 14, 2000
Dominick J. Morreale






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<PAGE>




                                INDEX TO EXHIBITS

No.     Page No.          Description

3(i)      *               Certificate of Incorporation of Learner's World, Inc.,
                          a New York corporation, dated June 27, 1996.

3(ii)     *               Certificate   of  Amendment  of  the  Articles  of
                          Incorporation  of the Company filed on April 11, 1997
                          effecting  the  change  of the  authorized  number of
                          shares  to  20,000,000,   par  value  to  $.0001  and
                          effecting a 39,000-for-1  forward split of the issued
                          shares.

3(iii)    *               Certificate   of  Amendment  of  the  Articles  of
                          Incorporation  of the  Company  filed on January  31,
                          1999 effecting a 1-for-30 reverse split of the issued
                          shares.

3(iv)     *               By-laws of the Company.

10(i)     *               Agreement of Sale dated December 17, 1996, between the
                          Company and Baybridge Playrobics, Inc.

10(ii)    *               Promissory  Note dated  October 26,  1999, between the
                          Company and Antonio Casaccio,  Agrippino  Casaccio and
                          Salvatore Casaccio, showing the  terms of  payment for
                          the Agreement of Sale dated December 17, 1996.

10(iii)   *               Benefit Plan for the Company dated November 19, 1999.

10(iv)    *               Leases for building located at 369 Avenue U, Brooklyn,
                          New York 11223.

10(v)     *               Leases  for building  located at 208-32 to 208-46 Bell
                          Boulevard, Bayside, New York 11360.

27       21               Financial Data Schedule "CE"



* Incorporated by reference from form 10-SB/A filed March 22, 2000.



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