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, 2000

  [ ] 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 ($0.000 I 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 [ ]

  The issuer's total consolidated revenues for the year ended December 31, 2000,
  were $1,324,742.

  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
  $47,968, based on the average closing bid and asked prices for the Common
  Stock on April 9, 2000.

  At March 30, 2000, the number of shares outstanding of the registrant's Common
  Stock, $0.0001 par value (the only class of voting stock), was 10,698,651.


<PAGE>





                                TABLE OF CONTENTS



                                                                     PAGE
                                     PART I

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

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

Item 3.       Legal Proceeding ................................................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

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 the use of 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:

               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.

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

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

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

               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.

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

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<PAGE>

               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.

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

               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 New York City. 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.






                                        2

<PAGE>

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
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 at 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 is designed to
help customers prepare for vocational tests, such as civil service, post office,
park ranger, police or firefighters 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

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<PAGE>

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 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 is providing test preparation courses in the following areas:

               Civil Service
               SAT
               CLEP
               Security Guard Training
               High School Diploma Program

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

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

Distribution

Distribution for the test preparation courses is 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

                                        4

<PAGE>

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.

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 IBM save millions of dollars each year
using distance education to train employees more effectively and efficiently
than traditional methods.

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
services 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
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
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. training courses covering

                                        5

<PAGE>

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
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.

                                        6

<PAGE>

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 billiondollar 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, 2000, 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
website. None of the Company's employees are represented by a union and the
Company considers its relationship with its employees to be good,

                                        7

<PAGE>

ITEM 2.         DESCRIPTION OF PROPERTY

In December 1996, the Company acquired the use of 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.

                                     PART I

ITEM 5.         MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDE
                MATTERS

The Company is currently traded on the OTC BB under the symbol LWRD.OB. The
table below sets forth the high and low sales prices for the Company's Common
Stock for each quarter of 1999 and 2000, and the first quarter of 2001. The
quotations below reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not represent actual transactions:


                  Quarter               High                  Low


1999              First                 $0.28                 $0.25
                  Second(1)             $9.80                 $4.50
                  Third                 $8.19                 $0.25
                  Fourth                $2.31                 $0.56

2000              First                 $0.88                 $0.11
                  Second                $0.50                 $0.125
                  Third                 $1.125                $0.40
                  Fourth                $0.97                 $0.016

2001              First                 $0.0625               $0.016

        (1)Price reflects a 30 to 1 reverse split effected March 1st,1999

                                        8
<PAGE>

Record Holders

As of March 30, 2000, there were approximately 24 shareholders of record holding
a total of 10,698,651 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.

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.

Recent Sales of Unregistered Securities

No unregistered securities were sold by the Company that are required to be
disclosed in this report.

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

General

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 the use of 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.

The Company generates revenue from 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 Company's 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 minimal. All of
these services are easily and logically merged. They are compatible in both
theme and space utilization.

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<PAGE>

The Company also has several products and plans for others which have been used
to create a dynamic interactive online 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 offers to the public, a location on the Internet where the customers
can prepare for tests such as the SAT and other educational exams. The site is
designed to help customers prepare for vocational tests, such as civil service,
post office, park ranger, police or firefighters 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 online learning environment.

The Company intends to 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 a simulated test environment for time and content as well
as a specific section on test taking techniques for the particular exam. By
offering its services online, the Company will attempt to address a perceived
need for alternative modes of training that are both flexible 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'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 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.

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

Revenues

Revenues for the year ended December 31, 2000 increased to $1,324,742
from$1,303,239 for the year ended December 31, 1999, an increase of 2%. The
increase in gross income is primarily attributable to an increase in tuition
fees collected from an increase in students enrolled.


Losses

Net losses for the year ended December 31, 2000 decreased to $455,156 from
$555,494 for the year ended December 31, 1999, a decrease of 18%. The decreas
in losses was attributable to a decrease in expenses.

Due to continued expansion of the online testing website the Company expects

                                       10

<PAGE>

continue to incur losses at least through 2001 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, 2000,
decreased to $791,210 from $836,722 for the year ended December 31, 1999, a
decrease of 5%. The decrease in general and administrative expenses was the
result of a decrease 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. The website became 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 in 2001.

Depreciation, amortization and interest expenses for the years ended December
31, 2000 and 1999 were $185,725 and $153,496, respectively.



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<PAGE>

Cost of Sales

The cost of sales for the year ended December 31, 2000 was $801,792 compared to
$868,515 for the year ended December 31, 1999. The decrease in the cost of sales
was primarily attributable to a decrease in labor costs. Cost of sales as a
percentage of sales for December 31, 2000 and 1999 respectively, were 61% and
67%.

B.       Liquidity and Capital Resources

At December 31, 2000, the Company had current assets of $8,416 and total assets
of $970,909 as compared to $103,570 and $1,150,033 for December 31, 1999. The
Company had a net working capital deficit of $166,923 at December 31, 2000,
compared to a net working capital deficit of $47,542 at December 31, 1999.

Cash flow used in operations was $274,303 for the year ended December 31, 2000,
and $353,863 for the year ended December 31, 1999.

Cash flow generated from financing activities was $288,159 for the year ended
December 31, 2000 and $430,750 for the year ended December 31, 1999.

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.

C.       Income Tax Expense

The Company has approximately $1,020,000 in net operating loss carry forwards
which may be used to offset future taxable income. 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, 2000 or 1999.

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

                                       12

<PAGE>

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.       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 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.

H.       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.

I.       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 $1,469,167
as of December 31, 2000, compared to a deficit of $1,014,011 at December 31,
1999. 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.

                                       13

<PAGE>


ITEM 7.          FINANCIAL STATEMENTS

The Company's financial statements for the fiscal years ended December 31, 2000
and 1999 are attached hereto as pages F-1 through F-15.






                      [THIS SPACE INTENTIONALLY LEFT BLANK]


                                       14

<PAGE>









                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES

                    AUDITED CONSOLIDATED FINANCIAL STATEMENTS

                            DECEMBER 31, 2000 & 1999








                                       15

<PAGE>


                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                                   YEARS ENDED
                            DECEMBER 31, 2000 & 1999



                                    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













                                       16

<PAGE>



                   (Letterhead of Sellers and Associates, PC)
                         3785 Harrison Blvd., Suite 101
                                 Ogden, UT 84403

                          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, 2000 and 1999, 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
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes, examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our 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, 2000 and 1999, and the results of its
operations and its cash flows for each of the years then ended in conformity
with generally accepted accounting principles in the United States of America.

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 and Assosiates PC
-----------------------------------
Sellers & Associates, P.C.
April 6, 2001
Ogden, Utah


                                       F-1

<PAGE>



                      LEARNER'S WORLD, INC AND SUBSIDIARIES
                       AUDITED CONSOLIDATED BALANCE SHEET
                               As of December 31,

<TABLE>
<S>                                                                     <C>                    <C>

ASSETS                                                                            2000                   1999
                                                                            ---------------        ----------------
   Current Assets
      Cash                                                               $                -     $            23,715
      Receivables                                                                     8,416                   9,855
      Receivable from shareholders                                                        -                  70,000
                                                                            ---------------        ----------------
          Total Current Assets                                                        8,416                 103,570
   Property and equipment, net of accumulated depreciation                          909,696                 992,499
                                                                            ---------------        ----------------
   Other Assets
      School licensing                                                                  583                   1,750
      Security deposits                                                              52,214                  52,214
                                                                            ---------------        ----------------
          Total Other Assets                                                         52,797                  53,964
TOTAL ASSETS                                                             $          970,909     $         1,150,033
                                                                            ===============        ================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
   Current Laibilities
       Bank Overdraft                                                    $           19,609     $                 -
       Accounts and notes payable                                                    58,720                  71,464
       Taxes payable                                                                 79,130                  63,352
       Current portion of long-term debt - non-stockholders                          17,880                  16,286
                                                                            ---------------        ----------------
           Total Current Liabilities                                                175,339                 151,112

   Long Term Liabilities
       Term Debt - long term portion - non-stockholders                              12,515                  16,753
       Due to stockholders                                                        1,231,171               1,076,921

          Total Other Liabilties                                                  1,243,686               1,093,674
          Total Liabilities                                                       1,419,025               1,244,786
                                                                            ---------------        ----------------
   Stockholders' equity (deficit)
       Common stock, $.0001 par value 20,000,000 shares authorized with
           10,297,250 and 9,776,250 shares issued and outstanding at December
           31, 2000 and 1999
           respectively                                                               1,030                     978
       Paid in capital                                                            1,282,521               1,197,343
       Stock issued not paid                                                       (262,500)               (279,063)
       Accumulated (deficit)                                                     (1,469,167)             (1,014,011)
                                                                            ---------------        ----------------
          Total stockholders' equity (deficit)                                     (448,116)                (94,753)
                                                                            ---------------        ----------------
          Total liabilities and stockholders' equity (deficit)                      970,909     $         1,150,033
                                                                         $
                                                                            ===============        ================
</TABLE>

                 See accompanying notes to financial statements

                                       F-2

<PAGE>

                      LEARNER'S WORLD, INC AND SUBSIDIARIES
                  AUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                        For the Years Ending December 31,

<TABLE>
<S>                                                                  <C>                     <C>


                                                                              2000                 1999
                                                                      ---------------------   -------------------
Revenues                                                              $           1,324,742   $         1,303,239

Expenses
     Cost of Sales                                                                  801,792               868,515
     General and administrative expenses                                            791,210               836,722
     Depreciation, amortization and interest                                        185,725               153,496
Total Expenses                                                                    1,778,727             1,858,733
                                                                      ---------------------   -------------------

Income (loss) from continuing operations before income taxes                       (453,985)             (555,494)

Provision for income taxes                                                            1,171                     -
                                                                      ---------------------   -------------------

Net  (loss)                                                                        (455,156)             (555,494)
                                                                      =====================   ===================

Income (loss) per weighted-average share of common stock
outstanding
    Basic and dilutive  net (loss) per share                          $               (0.05)  $             (0.07)
                                                                      ---------------------   -------------------
Basis and dilutive weighted-average number of common stock                        9,972,570             7,950,449
outstanding
                                                                      =====================   ===================
</TABLE>

                 See accompanying notes to financial statements

                                       F-3

<PAGE>

                      LEARNER'S WORLD, INC AND SUBSIDIARIES
        AUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                 For the Years Ending December 31, 2000 and 1999


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

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             -           -          99,458             -               -         99,458
promissory not due to shareholders

Net (loss) for the year ended December 31, 1999          -           -               -             -       (555,494)      (555,494)

Balance as of December 31, 1999                  9,776,250         978       1,197,343     (279,063)     (1,014,011)       (94,753)

Shares issued for services                         271,000          27          35,203             -               -         35,230

Cash received on stock sales                       250,000          25          49,975             -               -         50,000

Cash received in 2000 on stock issued                    -           -               -        16,563               -         16,563

Net (loss) for the year ended December 31, 2000          -           -               -             -       (455,156)      (455,156)
                                                ---------- ----------- ---------------  ------------  --------------  -------------
Balance as of December 31, 2000                 10,297,250   $   1,030   $   1,282,521  $  (262,500)  $  (1,469,167)  $   (448,116)
                                                ========== =========== ===============  ============  ==============  =============
</TABLE>


                 See accompanying notes to financial statements

                                       F-4

<PAGE>

                      LEARNER'S WORLD, INC AND SUBSIDIARIES
                  AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
                        For the Years Ending December 31,
<TABLE>
<CAPTION>
                                                                                2000                1999
Cash Flows from Operating Activities:                                   -------------------- -------------------
Cash Flows From Operating Activities
<S>                                                                    <C>                   <C>
     Net Income (loss)                                                     $        (455,156)   $       (555,494)
Adjustments to reconcile net income to net cash provided by
operating activities:
     Depreciation                                                                    120,474             104,394
     Amortization                                                                      1,167               1,167
     Stock issued for services                                                        35,230              13,800
     Interest eliminated and reclassified to paid in capital                               -              99,458
     Decrease (increase) in receivables                                                1,439              26,853
     Decrease in security deposit                                                          -                   -
     Increase (decrease) in accounts & notes payable                                   6,865             (42,994)
     Increase (decrease) in taxes payable                                             15,778              (1,047)
          Net Adjustment                                                             180,953             201,631
          Net Cash Provided by/(Used for) in Operating  Activities                  (274,203)           (353,863)
                                                                        -------------------- -------------------

Cash Flows from Investing Activities:
     (Purchase) of equipment                                                         (37,671)            (55,367)
     (Purchase) of school licensing                                                        -                   -
          Net Cash Provided by/(Used for) Investing Activities                       (37,671)            (55,367)
                                                                        -------------------- -------------------

Cash Flows from Financing Activities:

     (Decrease) increase in notes & loans payable (non-stockholders)                  (2,654)            (29,523)
     (Decrease) increase in notes & loans payable (stockholders)                     154,250             (54,727)
     Proceeds from issuance of capital stock                                         136,563             515,000
           Net Cash Provided by/(Used for) Financing Activities                      288,159             430,750
                                                                        -------------------- -------------------

                    Net Increase(decrease) in Cash                                   (23,715)             21,520

Beginning Cash Balance                                                                23,715               2,195
                                                                        -------------------- -------------------

Ending Cash Balance                                                         $              -    $         23,715
                                                                        ==================== ===================

Other Information
  Interest paid in cash                                                     $          9,834    $          2,727

Non-Cash Items
  Stock issued for services                                                 $         35,230    $         13,800
  Stock issued for debt conversion                                                         -             120,000
  Debt to shareholders contributed to paid in capital                                      -              99,458

</TABLE>
                 See accompanying notes to financial statements

                                       F-5

<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 1 - Organization and Nature of Business

         Learner's World, Inc. (the "Company" or "Learners") was incorporated in
         the State of New York June 28, 1996. The Company engages in the
         business of developing, owning, and operating children's learning and
         day care centers. The Company's facilities provide child care and
         recreational activities for two and one-half to ten year old children
         five days per week, academic tutorial services for students ranging
         from Kindergarten to 12th grade, computer assisted instruction for
         students and adults at all levels, and diagnostic and prescriptive
         services for children having difficulties in the school environment.
         The Company presently has three children's learning centers in the New
         York metropolitan area: Bayside, New York; Brooklyn, New York; and
         Lakeville, New York.

         The facilities at Brooklyn and Bayside have children amusement centers
         open daily to the general public. The Company is developing a web site
         designed to assist the general public study and prepare to take tests
         for careers, such as a policemen, on the internet.

Note 2 - 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.   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.


                                       F-6

<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 2 - Summary of Significant Accounting Policies - Continued

         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.

         Cash Equivalents

         For purposes of reporting of cash flows, the Company classifies all
         cash and short-term investments with maturities of three months or less
         to be cash equivalents.

         Net Income (Loss) Per Share

         Basic net income or loss per share is computed by dividing net income
         (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.

         Financial Statement 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.

                                       F-7

<PAGE>

                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 2 - Summary of Significant Accounting Policies - Continued

         Long-Lived Assets

         The Company accounts for the impairment and disposition of long-lived
         assets in accordance with Statement of Financial Accounting Standards
         No. 121 (SFAS No. 121), Accounting for the Impairment of Long-Lived
         Assets and for Long-lived Assets to Be Disposed Of. In accordance with
         SFAS No. 121, long-lived assets to be held are reviewed for events or
         changes in circumstances, which indicate that their carrying value may
         not be recovered. The Company periodically reviews the carry value of
         long-lived assets to determine whether or not impairment to such value
         has occurred.

         Fair Value of Financial Instruments

         The methods and assumptions used to estimate the fair value of each
         class of financial instruments 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.

         Long-term liabilities:

                  The carrying amounts of the Company's borrowings (See notes 4
                  & 5), 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, 2000 and 1999. In the case of the
                  non interest learning obligations to the stockholders the
                  carrying amounts and fair values are considered the same
                  because stockholders can control when they are paid back.

                                       F-8

<PAGE>

                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 2 - Summary of Significant Accounting Policies - Continued

         Comprehensive Income

         The Company has adopted SFAS No. 130 Reporting  Comprehensive  Income.
         The  Company  has no  reportable  differences  between  net income and
         comprehensive  income,  therefore a statement of comprehensive  income
         has not been presented.

         Advertising Expense

         Advertising costs are expensed as incurred.


Note 3 - Property and Equipment

         Property and equipment, at cost, are summarized December 31, as
follows:
<TABLE>
<S>                                           <C>                      <C>                     <C>
                                                                                                  Estimated
                                                      1999                   1999               Useful Lives
                                                ------------            -------------           ------------
         Machinery and equipment               $    742,738              $   732,949            3 - 20 years
         Furniture and fixtures                      96,417                   96,417            5 - 20 years
         Transportation equipment                    19,732                        -            5 years
         Leasehold improvements                     463,311                  455,161            3 - 20 years
                                                ------------            ------------
                                                  1,322,198                1,284,527
         (Less) accumulated depreciation           (412,502)                (292,028)
                                                -----------              ------------
                                                $   909,696              $   992,499
                                                ===========              ============
</TABLE>
Note 4 - 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.

                                       F-9

<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 4 - Due to Stockholders (Continued)

         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.

         At December 31, 2000 and 1999, the following amounts were owed to the
         three major stockholders:
<TABLE>
<S>                                                                          <C>                  <C>
                                                                                    2000               1999
                                                                              -------------       ------------
         Note payable due to Salvatore Casaccio,
         Antonio Casaccio, and Agrippino Casaccio from
         the sale of their shares of 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 shares of stock of the subsidiaries
         by the Company is accounted for by the purchase method of
         accounting.  Secured by the shares of 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.                                 401,921            301,921
                                                                               ------------        ----------

         Total                                                                  1,231,171          1,076,921

         (Less) Current portion due to Stockholders                             (   -   )             (  -  )
                                                                              -------------       -----------

         Total Long-term debt due to Stockholders                              $1,231,171         $1,076,921
                                                                              =============      ============
</TABLE>

         Maturities of long-term debt due to stockholders for the five years
after 2000 are:

         December 31, 2000                                    $     75,946
                      2001                                          97,162
                      2002                                         104,186
                      2003                                         111,718
                      2004                                         119,794
                   2005 & After                                    722,365
                                                              ------------
           Total                                              $  1,231,171
                                                              ============

                                      F-10

<PAGE>

                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 5 - Term Debt - Non Stockholders

         Term Debt consists of the following at December 31, 2000

         Payable to a supplier, secured by selected equipment.
         Monthly payment of $1,275 for 60 months with 12
         months remaining at 15.4% interest rate                     $   14,096

         Payable to a financial institution, secured by a vehicle.
         Monthly payment of $434 for 60 months with 45 months
         remaining at 9.25% interest rate.                               16,299
                                                                       --------

         Total Term Debt                                                 30,395

         (Less) Current Portion - Non Stockholders                      (17,880)
                                                                     ----------

         Total Long-Term Debt - Non Stockholders                     $   12,515
                                                                     ==========

         Maturities of long-term debt - non stockholders for the five years
after 2000 are:

                       2001                            $      17,880
                       2002                                    4,170
                       2003                                    4,594
                       2004                                    3,751
                       2005                                       -
                       2006 & After                               -
                                                        ------------

                       Total                          $       30,395
                                                       =============

Note 6 - Related Party Transactions

         As indicated in Note 4 - 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 CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 7 - Capital Stock

         On February 25, 1999, the Company amended its articles of
         incorporation. The Company is authorized to issue 20,000,000 shares of
         common stock, par value of $0.0001 per share. 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,
         1998.

         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 $601,563 has been received as of December 31, 2000,
         leaving an unpaid balance due of $262,500.

         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.

         On August 1, 2000, the Company issued 271,000 shares of stock for
         services valued at $35,230.

         On September 1, 2000 the Company granted an option to purchase 250,000
         shares of stock at an exercise price of 20 cents per share. The option
         was exercised immediately and the Company issued 250,000 shares for
         $50,000.

Note 8 - Commitments and Contingencies

         As of December 31, 2000, 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.



                                      F-12

<PAGE>

                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 8 - Commitments and Contingencies (Continued)

         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.

         Future minimum rental payments required under these leases for each of
         the next five years and in the aggregate, after 2000 are as follows:
                                                                         Long
                   Total           Brooklyn              Queens         Island

  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             158,025               -               158,025              -
  2006-2015      1,643,374               -             1,643,374              -
                -----------      -----------         -----------    ------------

 Total         $ 2,695,741      $   304,227        $   2,375,014    $    16,500
                ===========      ===========         ============    ===========

         The total rent was $259,326 and $259,326 for 2000 and 1999,
respectively.

         The Company also leases a copy machine for $108 per month. The lease is
         for 3 years extending from June 1999 to May 2002. At December 31, 2000
         a total of $1,836 remains on the lease, $1,296 for 2001 and $540 for
         2002. The total lease on the copy machine was $1,296 and $756 for 2000
         and 1999 respectively.

Note 9 - Income Taxes

         (Loss) before income taxes at December 31, 2000
         and 1999 consisted of:                       2000              1999
                                                   ------------     ------------

         Total                                    $   (455,000)     $  (555,000)
                                                   ============     ============

         The provision for income taxes at
         December 31, 2000 and 1999 consisted of:

         Current income taxes                     $      1,171      $     -
                                                   ------------     ------------

         Total                                    $      1,171      $     -
                                                  =============     ============


                                      F-13

<PAGE>

                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 9 - 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, 2000 and 1999 are:
                                                  2000               1999
                                             --------------     --------------
         Income taxes                        $      31,000       $    94,300

         Change in valuation allowance             (31,000)          (94,300)
                                             --------------     --------------

         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, 2000 and 1999 are:



                                                      2000              1999
                                              --------------     --------------
         Deferred tax assets:
           Net operating loss carryforward    $     202,000       $   171,100
                                              --------------     --------------

         Total gross deferred tax assets            202,000           171,100

         (Less) valuation allowance               (202,000)          (171,100)
                                              --------------     --------------

         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, 2000
         and 1999 are $202,000 and $171,000 respectively. The net change in the
         total valuation allowance for the years ended December 31, 2000 and
         1999 was $31,000 and $94,300 respectively.

         During 2000, the Company made $1,171 cash payments on income taxes.

         As of December 31, 2000, the Company has available for income tax
         purposes approximately $1,020,000 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.

                                      F-14

<PAGE>



                              LEARNER'S WORLD, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 9 - Income Taxes - Continued

         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 2000 did not cause the Company to lose the utilization
         of its net operating loss carry forwards.

Note 10 - 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 11 - Financial Condition and Going Concern

         The accompanying financial statements have been prepared in conformity
         with generally accepted accounting principles in the United States of
         America, which contemplate continuation of the Company as a going
         concern. The Company has sustained substantial operating losses. These
         conditions raise substantial doubt about the Company's ability to
         continue as a going concern.

          Management is seeking additional funds through revenues, borrowings
         and stock issues. During 2000, the Company raised $171,793 in capital
         ($136,563 in cash and $35,230 in exchange for services). At December
         31, 2000, an additional $262,500 is scheduled to be received during
         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 as needed and has indicated he will continue doing so, if
         needed, for the immediate future.

         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 2000 without significant fund raising
         efforts. Since this outcome is uncertain, the Company to continue as a
         going concern is also uncertain.

                                      F-15

<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              47          President, CEO, Secretary, Director
Agrippino Casaccio              31          Director
Carmine Notaro                  50          Director
Kevin Gersh                     33          Director
Dominick J. Morreale            61          Director

Salvatore Casaccio, 47, 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 Store 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, 31, 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, 50, 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, 33, 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 partner in the Long Island

                                       15

<PAGE>

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, 61, 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 aware of five persons who during the fiscal year ended December 31,
2000 were directors, officers, or beneficial owners 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 transitional year as follows:

Mr. Salvatore Casaccio, Mr. Agrippina Casaccio, Mr. Carmine Notaro, Mr. Kevin
Gersh, and Mr. Dominick J. Morreale all served as members of the Board of
Directors and/or as officers of the Company During 2000. Mr. Salvatore Casaccio,
Mr. Agrippino Casaccio, Mr. Notaro, Mr. Gersh, and Mr. Morreale failed to file a
Form 3 in a timely manner, and further failed to timely file a Form 5 for the
year ended December 31, 2000.


ITEM     10. EXECUTIVE COMPENSATION

A.       Compensation of Executives

The following table provides summary information for the years 2000, 1999 and
1998 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.

                                       16

<PAGE>

                                            SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>


                                      Annual Compensation                                Long Term Compensation
                              ----------------------------------------     ---------------------------------------------------------
                                                                                 Awards                         Payout
                                                                           --------------------------   ----------------------------
<S>                <C>        <C>            <C>          <C>                <C>           <C>            <C>         <C>
Name and            Year        Salary(2)     Bonus        Other Annual       Restricted     Securities      LIP        All Other
Principal                                                  Compensation        Stock        Underlining     payout     Compensation
Position                                                                       Awards        Options
                                                                                              SAYS(#)
Salvatore           2000       $100,000          -                  -             -               -           -                  -
Caustic,            1999       $100,000          -                  -             -               -           -                  -
CEO and             1998       $100,000          -                  -             -               -           -                  -
Director

</TABLE>

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 30, 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>
<S><C>                           <C>                                         <C>                             <C>

    Title of Class                Name and Address of Beneficial              Amount and Nature of            Percent
                                  Ownership                                   Beneficial Ownership            of Class
    Common Stock, $.0001          Salvatore Casaccio President,(3)            2,800,838                       26.2%
    par value                     Secretary, CEO, Director.
                                  64 Burton Ave
                                  Staten Island, NY 10309
    Common Stock, $.0001          Agrippino Casaccio, Director                2,900,000                       27.1%
    par value                     2040 East 26th St.
                                  Brooklyn, NY 11229
    Common Stock, $.0001          Carmine Notaro, Director                    100,000                         Less
    par value                     34 Garner Lane                                                              than 1%
                                  Bayshore, NY 11772
</TABLE>

(footnote)--------
(2)Salaries have not been paid, but are accruing as debt.
(3)Salvatore Casaccio and Agrippino Casaccio are brothers

                                       17

<PAGE>
<TABLE>
<S><C>                           <C>                                         <C>                             <C>
    Common Stock, $.0001          Kevin Gersh, Director                       50,000                          Less
    par value                     178 West 19th St.                                                           than 1%
                                  Huntington Station, NY 11746
    Common Stock, $.0001          Dominick J. Morreale, Director              50,000                          Less
    par value                     RFD 59A Smith Lane                                                          than 1%
                                  St. James, NY 11780
    Common Stock, $.0001          All Officers and directors as a             5,900,838                       55.2%
    par value                     group       (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 Hersh                                   50,000                      $1,000
Agrippino Casaccio                         2,900,000                    $ 58,000

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 I
     O-KSB, which is incorporated herein by reference.


                                       18

<PAGE>

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








                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       19

<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 ____ day of April, 2001

                              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
 ----------------------
 Salvatore Casaccio           President, Director           April 13, 2001

/s/ Agrippino Casaccio
 ---------------------
 Agrippino Casaccio           Director                      April 13, 2001

/s/ Carmine Notaro
 -------------------
 Carmine Notaro               Director                      April 13, 2001



                                       20

<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-I 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.

 I 0(i)   *          Agreement of Sale dated December 17, 1996, between the
                     Company and Baybridge Playrobics, Inc.

 I                   0(ii) * Promissory Note dated October 26,
                     1999, between the Company and Antonio
                     Caustic, Agrippino Caustic and Salvatore
                     Caustic, 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.

 1 0(iv)  *          Leases for building located at 3 69 Avenue U, Brooklyn,
                     New York II 223.

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



  * incorporated by reference from Form 10-SB/A filed March 22, 2000.

                                       21