<PAGE>


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

      (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

           FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

           OR

      ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

           FOR THE TRANSITION PERIOD FROM _________ TO ___________.

COMMISSION FILE NUMBER:  0-29205

                           LIGHTHOUSE FAST FERRY, INC.
             ------------------------------------------------------
             (Exact name of small business issuer as in its charter)


       NEW JERSEY                                           22-3241823
-------------------------------                           -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)


         195 FAIRFIELD AVENUE, SUITE 3C, WEST CALDWELL, NEW JERSEY 07006
        ----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (973) 618-9034
                                ----------------
                           (Issuer's telephone number)


                          ----------------------------
      (Former name, former address and former fiscal year, if changed since
                                  last report)

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

Check whether the registrant (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 [ ]

The number of shares outstanding of the issuer's classes of common equity, as of
May 10, 2002 is 17,655,963 shares of Common Stock.

Transitional Small Business Disclosure Format (check one):
YES  [ ]    NO [X]
<PAGE>
                          PART I FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS









                  LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES

                              FINANCIAL STATEMENTS

                                 March 31, 2002
<PAGE>
                  LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES





                          INDEX TO FINANCIAL STATEMENTS








<TABLE>
<CAPTION>
                                                                           Page No.
                                                                           --------
<S>                                                                        <C>
Consolidated Balance Sheet at March 31, 2002............................        4


Consolidated Statements of Operations
     For the Three Months Ended March 31, 2002 and 2001.................        5


Consolidated Statements of Cash Flows
     For the Three Months Ended March 31, 2002 and 2001.................      6 - 7


Notes to Consolidated Financial Statements .............................      8 - 15
</TABLE>
<PAGE>
                  LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                March 31,
                                                              ------------
                                                                  2002
                                                              ------------
<S>                                                           <C>
                       A S S E T S

Current assets:
  Cash                                                        $    290,533
  Inventories                                                      104,802
  Deferred financing costs                                       3,132,938
  Prepaid expenses and other current assets                        307,366
                                                              ------------
      Total current assets                                       3,835,639

Property and equipment - at cost,
  less accumulated depreciation                                 10,419,119
Goodwill                                                           975,640
Other assets                                                       555,744
                                                              ------------

        Total Assets                                          $ 15,786,142
                                                              ============

         LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
  Convertible promissory notes                                $  6,573,000
  Current maturities of long-term debt                           1,399,444
  Notes payable - short-term                                       345,000
  Notes payable - stockholders                                     183,255
  Accounts payable                                               1,202,193
  Accrued expenses                                               1,696,577
  Deferred revenues                                                276,595
  Due to officers                                                  271,162
                                                              ------------
     Total current liabilities                                  11,947,226

Long-term debt - net of current maturities                       9,096,253
                                                              ------------
      Total liabilities                                         21,043,479
                                                              ------------

Stockholders' deficiency:
  Preferred stock - $.01 par value
    Authorized and unissued 10,000,000 shares
  Common stock - $.01 par value
    Authorized - 40,000,000 shares
    Issued and outstanding - 17,075,838 shares                     170,759
  Additional paid-in capital                                    19,128,068
  Accumulated deficit                                          (24,556,164)
                                                              ------------
     Total stockholders' deficiency                             (5,257,337)
                                                              ------------

        Total Liabilities and Stockholders' Deficiency        $ 15,786,142
                                                              ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
                  LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                        For the Three Months Ended
                                                                   March 31,
                                                      ---------------------------------
                                                          2002                 2001
                                                      ------------         ------------
<S>                                                   <C>                  <C>
Revenues                                              $  1,405,424         $    831,905
                                                      ------------         ------------

Costs of service:
  Ferry operations                                       1,441,301              810,424
  Depreciation                                             230,749              226,388
                                                      ------------         ------------
Total costs of service                                   1,672,050            1,036,812
                                                      ------------         ------------

                                                          (266,626)            (204,907)
                                                      ------------         ------------

Operating expenses:
  Selling, general and administrative                      489,315              418,532
  New business development                                  98,663              138,335
  Marketing                                                  8,873                4,334
  Amortization of goodwill                                      --               20,236
                                                      ------------         ------------
Total operating expenses                                   596,851              581,437
                                                      ------------         ------------

Loss from Operations                                      (863,477)            (786,344)
                                                      ------------         ------------

Other (income) expenses:
  Interest and amortization of financing costs           1,781,534            1,423,530
  Other (income) expenses                                  (11,839)                  --
                                                      ------------         ------------
Total other expenses                                     1,769,695            1,423,530
                                                      ------------         ------------

Net loss                                              ($ 2,633,172)        ($ 2,209,874)
                                                      ============         ============

Per share data:
  Basic and diluted:
    Net loss                                          $      (0.18)        $      (0.27)
                                                      ============         ============

Weight average number of shares outstanding:
      Basic and diluted                                 14,858,229            8,284,864
                                                      ============         ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       5
<PAGE>
                  LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                            For the Three Months Ended
                                                                        March 31,
                                                                2002               2001
                                                            -----------         -----------
<S>                                                         <C>                 <C>
Cash flows from operating activities:
  Net loss                                                  ($2,633,172)        ($2,209,874)

  Adjustments to reconcile net loss
      to net cash used in operating activities:
    Depreciation                                                234,863             228,800
    Amortization of goodwill                                         --              20,236
    Amortization of deferred finance costs                    1,395,803           1,036,915
    Stock issued for services rendered                               --              29,600
    Increase (decrease) in cash flows as a result of
        changes in assets and liabilities
      Inventories                                                 1,500                (903)
      Prepaid expenses and other current assets                   5,240             (62,931)
      Other assets                                             (195,181)             14,915
      Accounts payable                                          127,375             228,852
      Accrued expenses                                          197,535             133,633
      Deferred revenues                                          70,358              24,642
      Due to officers                                                --               8,264
                                                            -----------         -----------

Net cash flows used in operating activities                    (795,679)           (547,851)
                                                            -----------         -----------

Cash flows from investing activities:
  Acquisition of property and equipment                          (2,969)                 --
  Construction in process                                      (175,000)                 --
                                                            -----------         -----------
Net cash used in investing activities                          (177,969)                 --
                                                            -----------         -----------

Cash flows from financing activities:
  Proceeds from notes payable - stockholders                         --              30,000
  Payments of notes payable - stockholders                       (3,500)                 --
  Proceeds from convertible promissory notes                    685,000             385,000
  Repayment of convertible promissory notes                     (25,000)
  Proceeds from short term debt obligations                     125,000
  Repayment of short term debt obligations                      (90,000)
  Repayments of long-term debt                                  (78,979)            (70,331)
  Proceeds from issuance of common stock                          5,000             159,500
                                                            -----------         -----------
Net cash provided by financing activities                       617,521             504,169
                                                            -----------         -----------

Net increase (decrease) in cash                                (356,127)            (43,682)
Cash at beginning of period                                     646,660              66,578
                                                            -----------         -----------
Cash at end of period                                       $   290,533         $    22,896
                                                            ===========         ===========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                        6
<PAGE>
                  LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                             For the Three Months Ended
                                                                     March 31,
                                                             ----------------------------
                                                                 2002              2001
                                                             ------------        --------
<S>                                                          <C>                 <C>
Supplemental Disclosures of Cash Flow Information:

Supplemental Schedules of Noncash
  Operating and Financing Activities:

  Common stock and warrants issued as financing costs        $  3,317,333        $232,211
                                                             ============        ========

  Common stock issued as payment of liabilities:
    Others                                                   $         --        $ 29,600
                                                             ============        ========

  Convertible promissory note issued as payment
    of financing costs                                       $    150,000        $     --
                                                             ============        ========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                        7
<PAGE>
                  LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2002


NOTE 1 - BASIS OF PRESENTATION.

      The financial information herein is unaudited; however, such information
reflects all adjustments (consisting of normal, recurring adjustments) that are,
in the opinion of management, necessary for a fair statement of results for the
interim periods. The results of operations for the three months ended March 31,
2002 are not necessarily indicative of the results to be expected for the full
year. Certain financial information and footnote disclosure normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. The
reader is referred to the audited financial statements and notes thereto for the
year ended December 31, 2001, filed as part of the Company's Annual Report on
Form 10-KSB for such year.


NOTE 2 - GOING CONCERN.

      The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplate continuation of the Company as a going concern.
Lighthouse Fast Ferry, Inc. (the "Company") has sustained substantial losses for
the quarter ended March 31, 2002 and the year ended December 31, 2001. In
addition, at March 31, 2002 the Company has working capital and stockholders'
capital deficiencies of $8,111,587 and $5,257,337, respectively.

      Future viability of the Company is dependent upon the Company's ability to
obtain additional funding and obtain profitable operations. In the three months
ended March 31, 2002, the Company received cash of $685,000 from convertible
promissory notes, $125,000 from short-term loans and $5,000 in cash from the
sale of its common stock. The proceeds were used to provide working capital for
the Company's ongoing operations, to meet certain obligations and to fund its
expansion plans.

      Management is aggressively pursuing federal funding that is presently
available for ferry service operators in the metropolitan New York area. Federal
funds are also available through the Federal Emergency Management Agency (FEMA).
The Company has submitted to FEMA an application for reimbursement of
approximately $500,000 of expenditures related to the start-up of the Keyport
operation. A federally sponsored bill through an emergency appropriations
funding included in the Department of Defense Appropriations has allocated $100
million specifically to expand ferry service between New York and New Jersey.
While the Company does not expect to receive funds directly from this
appropriation, Perth Amboy Redevelopment Agency (PARA) has been identified as
one of the expansion projects. Any funds PARA receives will reduce the amount of
funds the Company will need to rehabilitate the planned Perth Amboy ferry site
and to develop landside ferry facilities.


                                       8
<PAGE>
NOTE 2 - GOING CONCERN (continued).

      In addition, the Perth Amboy Redevelopment Agency has authorized the sale
of $14 million in tax-free municipal bonds to be used specifically for the
development of high-speed ferry service that will be provided exclusively by the
Company through its operating subsidiary. Although there can be no assurances
that the Company will be successful in obtaining funding from any of these
sources, management is confident that as a currently operating ferry service
with over three years of operational history, it is favorably positioned to
secure some funding from these sources.

      Although there can be no assurances that the Company will be successful in
obtaining funding, it is management's opinion that through the sales of its
common stock and other financing arrangements the Company will continue to be
successful in raising sufficient funds to meet the Company's obligations as they
become due.

      The conditions previously mentioned raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

NOTE 3 - NEW ACCOUNTING PRONOUNCEMENTS.

      In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement Of Financial Accounting Standards (SFAS) No. 141, "Accounting For
Business Combinations", and SFAS No. 142, "Goodwill And Other Intangible
Assets". These Statements modify accounting for business combinations after June
30, 2001 and affect the Company's treatment of goodwill at the start of fiscal
year 2002. SFAS No. 142 requires that goodwill existing at the date of adoption
be reviewed for possible impairment and the impairment tests be periodically
repeated, with impaired assets written-down to fair value. Additionally,
existing goodwill must be assessed and classified consistent with the
Statements' criteria. Amortization of goodwill ceased effective December 31,
2001. The Company is still assessing if goodwill has been impaired. Currently,
management is of the opinion that there will not be an impairment charge.


NOTE 4 - RECLASSIFICATIONS.

      Certain prior years amounts have been reclassified to conform to the
current year presentations.


NOTE 5 - CONVERTIBLE PROMISSORY NOTES.

      The Company has issued convertible promissory notes (CPNs) that are
convertible at the holders' option into shares of the Company's restricted
common stock. Certain CPNs carry simple interest at the rate of 10.5% per annum.
Interest is payable quarterly, and the notes mature one-year from date of
issuance. Certain other CPNs, referred to as Senior CPNs, carry simple interest
at the rate of 10%


                                       9
<PAGE>
NOTE 5 - CONVERTIBLE PROMISSORY NOTES (continued).

per annum and mature in the range of four to nine months with principal and
interest payable at maturity.


      CPNs are summarized as follows at March 31, 2002:

<TABLE>
<CAPTION>
                                                            10.5%              10.0%
                                                            CPNs            Senior CPNs
<S>                                 <C>                 <C>                 <C>
Balance at December 31, 2001          5,763,000             680,000           5,083,000

CPNs issued for cash                    685,000              35,000             650,000
CPNs issued for services                150,000             150,000

Payments                                (25,000)            (25,000)                 --
                                    -----------         -----------         -----------
                                        810,000              10,000             800,000

Balance at March 31, 2002           $ 6,573,000         $   690,000         $ 5,883,000
                                    ===========         ===========         ===========
</TABLE>

      In the three months January to March 2002, holders of maturing CPNs
aggregating $35,000 extended the maturity date for a one-year term. In
consideration thereof, the Company issued such note holders a total of 875
shares of its restricted common stock. During the same period, holders of senior
CPNs totaling $4,373,000, due on February 28, 2002, extended the maturity dates
for such notes to August 31, 2002. In consideration for the extension, the
Company issued to the note holders 2,211,500 shares of its restricted common
stock. In consideration for the services of a financial consultant in
negotiating the extension, the Company issued the consultant a senior CPN in the
amount of $100,000 and 50,000 shares of its restricted common stock in lieu of a
fee. The Company amortizes the allocated fair market value of the securities and
debt issued in connection herewith over the term of the extension.

      In January and March 2002, the Company received proceeds from 10.5% CPNs
totaling $35,000. In connection therewith, the Company issued to the note
holders 1,000 shares of its restricted common stock, the fair market value of
which is allocated over the term of the note.

      In March 2002, the Company received proceeds from 10.0% senior CPNs
aggregating $650,000. Notes in the amount of $500,000 mature July 31, 2002 and a
note in the amount of $150,000 matures on September 22, 2002. In connection
therewith, the Company issued to the note holders 650,000 shares of its
restricted common stock. The Company issued a CPN in the amount of $50,000 in
lieu of a fee to a financial consultant who arranged the loan. The Company
amortizes the allocated fair market value of the securities and debt issued in
connection herewith over the term of the note.


                                       10
<PAGE>
NOTE 6 - NOTES PAYABLE - SHORT-TERM.


      In October 2001, the Company received proceeds of $350,000 from a term
note secured by a second mortgage on the Company's two ferry vessels. The note
bears an annual interest rate of 18% with principal of $30,000 and interest to
be paid monthly commencing November 1, 2001. The note matured on April 1, 2002
with a final payment due of $200,000. In April 2002, the Company finalized
negotiations of an extension and modification. The modified terms of the note
permit interest only payments in the second quarter of 2002 and principal and
interest payments of approximately $20,000 per month for the following nine
months. In consideration for the extension, the Company issued 100,000 shares of
its restricted common stock. The allocated fair market value of the shares will
be charged to operations over the term of the extension as financing costs.


      In March 2002, the Company received proceeds totaling $50,000 from two
90-day promissory notes each bearing interest at a rate of 12% per annum. As
consideration for the loan, the Company issued to the note holders a total of
15,000 shares of its restricted common stock and three-year warrants to purchase
30,000 shares of its restricted common stock at an exercise price per share of
$1.25, exercisable upon the date of issuance. The allocated fair market value of
the shares and warrants will be charged to operations over the term of the note
as financing costs.


      In March 2002, the Company received proceeds in the amount of $75,000 from
a promissory note maturing in one-year bearing interest at a rate of 18% per
annum. Interest only is paid monthly. As consideration for the loan, the Company
issued to the note holder three-year warrants to purchase 25,000 shares of its
restricted common stock at an exercise price per share of $2.00, exercisable
upon the date issuance. The allocated fair market value of the shares and
warrants will be charged to operations over the term of the note as financing
costs.


NOTE 7 - CAPITAL STOCK.

(a)         Common Stock Issued for Consideration Other Than Cash:


      During January and March 2002, the Company issued 1,000 shares of its
restricted common stock to note holders as consideration for 10.5% CPNs totaling
$35,000. The allocated fair market value of the securities issued will be
amortized over the term of the notes.


      During January, February and March 2002, as consideration for a one-year
extension of the maturity dates of the notes, the Company issued to holders of
maturing convertible promissory notes an aggregate of 875 shares of its
restricted common stock. The allocated fair market value of the securities
issued will be amortized over the term of the extension.


                                       11
<PAGE>
NOTE 7 - CAPITAL STOCK (continued).

      In February 2002, the Company issued to the holders of Senior Convertible
Promissory notes a total of 2,211,500 shares of it restricted common stock
having an allocated fair market value of $2,764,375 on the date of issuance, as
consideration for a six-month extension of notes totaling $4,373,000. The
allocated fair market value of the securities issued will be allocated over the
term of the extension. Additionally, the Company issued to a financial
consultant 50,000 shares of its restricted common stock as consideration for
services rendered in connection with obtaining the extension. The allocated fair
market value of the securities issued will be amortized over the term of the
extension.

      In February 2002, the Board of Directors approved the issuance of 100,000
shares of restricted common stock to the Company's CEO/President to replace
stock that he had placed as collateral for a loan and subsequently surrendered
to a note holder as consideration for an extension of that loan and satisfaction
of interest owed, which permitted the Company to realize additional cash from
the December 2001 sale of its Shrewsbury Avenue property.

      In March 2002, as consideration for two 90-day notes totaling $50,000 and
bearing interest at the rate of 12% per annum, the Company issued to the two
note holders, an aggregate of 15,000 shares of its restricted common stock. The
allocated fair market value of the securities issued will be amortized over the
term of the note.

      In March 2002, the Company issued to two note holders 650,000 shares of
its restricted common stock as consideration for 10.0% senior CPNs aggregating
$650,000. The allocated fair market value of the securities issued will be
amortized over the term of the notes.

(b)         Common Stock Issued for Cash:

      During February 2002, the Company sold 5,000 shares of its restricted
common stock at a price of $1.00 per share to an accredited investor and current
stockholder.


NOTE 8 - STOCK OPTIONS AND WARRANTS.

(a)         Employee Stock Options:


      On March 10, 2000, the Board of Directors of the Company adopted the 2000
Employee Stock Option Plan (2000 Plan), reserving a maximum of 1,115,000 shares
of common stock to be issued as bonuses or upon the exercise of options. As of
March 31, 2002 the Company had not granted any stock options under the Employee
Stock Option Plan. On May 1, 2002, the Board of Directors approved the issuance
of options to purchase an aggregate 78,767 shares of the Company's stock at an
exercise price of $1.25 per share in accordance with the 2000 Plan. The options
were awarded to qualified employees based on time of service, compensation rate
and contribution to the Company.


                                       12
<PAGE>
NOTE 8 - STOCK OPTIONS AND WARRANTS (continued).

(b)         Options and Warrants Granted in 2002:


      In February 2002, under the terms of their employment agreement the Board
of Directors approved the issuance to both its CEO and Vice President-Secretary
warrants to purchase 100,000 shares of its common stock at an exercise price of
$1.00, which was the fair market value at the date of grant. The warrants are
exercisable for three years from date of grant. Also in February 2002, the Board
granted in recognition of services rendered in 2001 options to purchase shares
of its restricted common stock at an exercise price of $1.20 as follows: 200,000
shares to the CEO and Vice President-Secretary, 30,000 shares to the CFO and
125,000 shares to its President of its operating subsidiary. The options vest
immediately and are exercisable for a five-year period.

      In March 2002, the Company issued to a financial consultant warrants to
purchase 50,000 shares of the Company's common stock at $2.00 per share in
exchange for services rendered during the quarter ended March 31, 2002.

      In March 2002, as consideration for two 90-day notes totaling $50,000 and
bearing interest at the rate of 12% per annum, the Company issued to the two
note holders warrants to purchase 30,000 shares of its common stock at $1.25 per
share exercisable for a three-year period. The allocated fair market value of
the securities issued will be amortized over the term of the note.

      In March 2002, as consideration for a one-year promissory note in the
amount of $75,000 and bearing interest at the rate of 18% per annum, the Company
issued to the note holder warrants to purchase 25,000 shares of its common stock
at $2.00 per share exercisable for a three-year period. The allocated fair
market value of the securities issued will be amortized over the term of the
note.


NOTE 9 - COMMITMENTS AND CONTINGENCIES.

(a)   Leases:


      On February 28, 2002 the Company's lease for its corporate offices at 195
Fairfield Avenue, West Caldwell, New Jersey expired. The Company executed a new
lease with CEC Realty, LLC, an entity in which an officer and director of the
Company is a principal. The new lease is for a two-year term commencing March 1,
2002 and provides for the Company to occupy additional office space. The monthly
rental for the two-year period is $3,150.


(b)   Litigation:


      On June 30, 2000, D. Weckstein & Co., Inc. ("Weckstein") filed suit
against the Company in the Supreme Court of the State of New York. The Complaint
alleges that the Company owes Weckstein $360,000 for services rendered by
Weckstein in connection with the Company's purchase of The Cigar Box, pursuant
to a letter agreement between Weckstein and the Company. During 2001 the
discovery phase of the


                                       13
<PAGE>
NOTE 9 - COMMITMENTS AND CONTINGENCIES (continued).

litigation was completed. Upon completion of discovery, Weckstein filed a motion
for summary judgment, and affidavits and briefs were filed. In April 2002, the
Court denied Weckstein's motion for summary judgment. On May 10, 2002 the
parties received notice that a trial date has been set for July 29, 2002.

      On August 3, 2000, the Company received a notice from a subsidiary of The
Connecticut Light & Power Co. (the "Landlord"), terminating its lease for the
property that is the proposed site for the Company's Stamford, Connecticut ferry
terminal. The Landlord based the termination of the lease on the failure of the
Company to get certain necessary permits for its use of the site. The Company
disputes the Landlord's right to terminate the lease. As a result of the
inability to resolve material issues, the parties pursued legal remedies. Trial
of the issues commenced in August 2001 before the Connecticut Superior Court.
The trial was concluded in February 2002. Briefs were filed in April 2002 and
the Company is awaiting the court's decision, which is expected in late May
2002.


NOTE 10 - SUBSEQUENT EVENTS.

      In April 2002, the Company contracted to purchase for approximately $3.3
million a high-speed ferry vessel being constructed by Austal USA LLC ("Austal")
shipbuilders. As of May 10, 2002, the Company had paid Austal a total of
$425,000 in progress payments. The Company is in negotiations with a lender to
secure long-term financing for the vessel and is confident that it will be
successful in obtaining such financing on acceptable terms. Delivery is expected
in early July 2002. The vessel will be utilized in the Company's Keyport
service.

      In April 2002, the six-month Vessel Management Agreement with New England
Aquarium Corporation for the use of a fast ferry vessel for the Company's
Keyport, NJ operation expired and the vessel was returned to its owner. On a
short-term basis, the Company has entered into a weekly charter agreement with
Doris Mae IV Inc. at the rate of approximately $2,000 per day for a vessel to
provide limited ferry service at its Keyport location while it is waiting for
delivery of a new high-speed vessel being built by Austal.

      In early May 2002, the Charter Agreement with Bay State Cruise Company for
a seven-month term for the use of a fast ferry vessel to be used at the
Company's Keyport site expired and the vessel was returned to its owner. On a
short-term basis, the Company has entered into a weekly charter agreement with
Brooklyn Marlyn Boats at the rate of approximately $2,000 per day for a vessel
to provide limited ferry service at its Keyport location while it continues to
seek a suitable replacement charter.


                                       14
<PAGE>
      In April 2002, the Company received proceeds from a four-month senior
convertible promissory note in the amount of $350,000, bearing simple interest
at an annual rate of 10%. Principal and interest is payable at maturity. As
consideration for the note, the Company issued 350,000 shares of its restricted
common stock. Additionally, the Company issued to a financial consultant a
convertible promissory note in the amount of $35,000, as consideration for
services rendered

NOTE 10 - SUBSEQUENT EVENTS (continued).

in connection with obtaining the proceeds. The allocated fair market value of
the securities and debt issued will be amortized over the term of the note.

      In April 2002, the Company received cash proceeds of $160,000 from a
90-day promissory note in the amount $176,000, which includes a placement fee of
$16,000, bearing interest at the rate of 18% per annum. Interest is payable
monthly and principal is due at maturity. As consideration for the $176,000
loan, the Company issued the lender 60,000 shares of its restricted common
stock, the allocated fair market value of which will be amortized over the term
of the note. Interest only is payable monthly. Additionally, the Company issued
to the lender an assignment of the Austal contract for the purchase of the
vessel.

      On May 1, 2002, the Board of Directors issued to each of the CEO/President
and the Vice-President/Secretary five-year options to purchase 250,000 shares of
the Company's restricted common stock at an exercise price of $1.25 per share as
compensation for providing their personal guarantee on loans totaling $330,000.


                                       15
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

OVERVIEW

      Lighthouse Fast Ferry Inc. (the "Company") is a New Jersey corporation
formed on May 12, 1993 under the name Drydock Cafe, Inc. On September 21, 1994,
the Company changed its name to Lighthouse Landings, Inc. On September 19, 2000,
the Company changed its name to Lighthouse Fast Ferry, Inc. The Company, through
its subsidiary New York Fast Ferry Holding Corp. ("NYFF"), is an operator of
high speed, commuter passenger ferry service in the New York City metropolitan
region. The Company, through its subsidiary NY Fast Ferry, operates from two
separate leased facilities in Highlands, New Jersey.

      Effective October 15, 2001, the Company commenced high-speed ferry service
from Keyport, NJ, also in Monmouth County, to Manhattan. The Keyport ferry site
is operated under a joint venture agreement between NY Fast Ferry and Keyport
Fast Ferry, an unrelated entity. The Company serviced Keyport with two
high-speed ferry vessels, chartered under a short-term arrangement, until late
April and early May, respectively, when the charters terminated. In April 2002,
the Company contracted to purchase a high-speed ferry being built by Austal USA
LLC ("Austal") shipbuilders to be delivered in early July and utilized for the
Keyport service.

      Before September 11,2001, the number of US built, high-speed ferry vessels
available for charter in the US market was limited. Subsequent to the events of
September 11, 2001, ferry service in the New York harbor has been expanded as a
quick solution to the loss of Path train service to lower Manhattan.
Accordingly, availability of suitable high-speed vessels has contracted and the
cost of charters has increased. As a result, to date the Company has not been
successful in finding suitable high-speed ferry vessels to replace the charters
that terminated in April and May.

      In the interim the Company has chartered two sub-optimal vessels to
provide limited ferry service from the Keyport location until it can locate more
suitable vessels and/or the new vessel is delivered. This situation will
adversely impact the Company's revenues from its Keyport location, resulting in
a potential increase in operational losses until it is able to provide the
proper vessels for the service.

      The following discussion should be read in conjunction with the unaudited
Consolidated Financial Statements and the Notes to those statements, which are
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") for interim financial information, along with
other information included in this Form 10-QSB.


                                       16
<PAGE>
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2002 COMPARED WITH THREE MONTH
ENDED MARCH 31, 2001.


REVENUES - The Company's consolidated revenues are comprised primarily of
passenger ticket sales, galley sales, charter sales and miscellaneous sales.
Total revenues for the three months ended March 31, 2002 totaled $1,405,424 as
compared to $831,905 for the same period ended in 2001, a 68.94% increase. The
increase is primarily attributable to an increase in passenger ticket sales of
approximately $540,000 to $1,330,700 for the period ended March 31, 2002 from
$788,529 for the same period in 2001. Additionally, galley sales increased to
$67,668 for the three months ended March 31, 2002 as compared to $39,376 for the
same period in 2001, a 71.85% increase.

      Both passenger ticket and galley sales increases result from expanded
ridership at the Company's Highlands location in the three months ended March
31, 2002 and 2001, to 80,661 from 67,870, respectively, an 18.85% increase and
the addition of its Keyport operation, which commenced service on October 15,
2001.

COST OF SERVICES - NYFF's cost of services increased by 61.27% to $1,672,050 for
the three months ended March 31, 2002 compared to $1,036,812 for the three
months ended March 31, 2001. The overall changes are comprised of the following:

SALARY AND RELATED BENEFITS - Salary and related benefits increased by 53.09% to
$289,172 for the three months ended March 31, 2002 compared to $188,888 for the
three months ended March 31, 2001. The increase is attributable to additional
crew and maintenance personnel added for both the Highlands and Keyport
operations, nearly doubling year-on-year, increases in the hourly rates of union
personnel and overtime pay required by the renewed union contract and higher
health insurance premiums.

FUEL AND OIL RELATED COSTS - Fuel and oil related costs increased by 38.17% to
$232,497 for the three months ended March 31, 2002 compared to $168,270 for the
three months ended March 31, 2001. The increase is attributable to an increase
in fuel consumption as the Company operated a total of four vessels in 2002 as
compared to two in 2001, with the additional two vessels servicing the Keyport
location.

BOAT MAINTENANCE AND RELATED SUPPLIES - Boat maintenance and related supplies
decreased by 19.86% to $181,396 for the three months ended March 31, 2002
compared to $226,358 for the three months ended March 31, 2002. The decrease in
boat maintenance and related supplies was a result of unscheduled maintenance
and replacement of a steering control system in 2001 that did not recur in 2002.

DOCKING AND PARKING RELATED FEES - Docking and parking related fees increased by
37.51% to $144,278 for the three months ended March 31, 2002 as compared to
$104,921 for the three months ended March 31, 2001. The increase in docking and
parking related fees are the result of an increase in the ridership in Highlands
and the addition of the Keyport operation.

INSURANCE - Insurance costs increased by 34.10% to $40,423 for the three months
ended March 31, 2002 as compared to $30,145 for the


                                       17
<PAGE>
three months ended March 31, 2001. The overall increase in insurance costs is
primarily the result of an increase in insurance premiums.

GALLEY COST OF GOODS SOLD - The galley cost of goods sold increased by 60.15% to
$42,028 for the three months ended March 31, 2002 as compared to $26,242 for the
three months ended March 31, 2001. The increase is primarily attributable to an
increase in galley sales of 71.85%.

FERRY AND BARGE EQUIPMENT RENTAL - For the three months ended March 31, 2002,
ferry and barge equipment rental totaled $432,467 as compared to $27,885 for the
same period in 2001, an increase of $404,582. The increase in the expenditure is
directly attributable to the vessels chartered on short-term bases for the
Keyport service.

OTHER DIRECT OPERATING COSTS - Other direct operating costs for the three months
ended March 31, 2002 amounted to $79,040 as compared to $29,849 for the three
months ended March 31, 2001, a 164.80% increase. Other direct operating costs
include primarily merchant credit card fees, the costs of a third-party shuttle
bus service between its locations provided by the Company and the cost of
security at the dockside facilities and on the vessels required since September
11, 2001.

DEPRECIATION - Depreciation increased by 1.93% to $230,749 for the three months
ended March 31, 2002 compared to $226,388 for the three months ended March 31,
2001.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - The Company's consolidated
selling, general and administrative expenses increased over 16.91% to $489,315
for the three months ended March 31, 2002 compared to $418,532 for the three
months ended March 31, 2001. The increases are comprised of the following:

FERRY ADMINISTRATION, SALARY AND RELATED BENEFITS - Salary and related benefits
for Ferry Administration increased by 93.27% to $123,172 for the three months
ended March 31, 2002 compared to $63,732 for the three months ended March 31,
2001. The increase is attributable to salary increases, reassignment of a
management personnel from operations to administration and temporary help and
additional headcount added to support the Keyport service.

CORPORATE ADMINISTRATION, SALARY AND RELATED BENEFITS - Salary and related
benefits for the Corporate Administration was approximately $150,000 for both of
the three months ended March 31, 2002 and 2001.

PROFESSIONAL SERVICES - Professional services, which include legal, accounting
and consulting services, decreased by 28.19% to $74,164 for the three months
ended March 31, 2002 compared to $103,281 for the three months ended March 31,
2001. The decrease is primarily attributable to a reduction in legal expenses
and accounting fees.

TRAVEL AND RELATED AUTOMOBILE EXPENSES - Travel and related automobile expenses
for the three months ended March 31, 2002 amounted to $19,949 as compared to
$20,461 for the three months ended March 31, 2001, a decrease of approximately
$500.


                                       18
<PAGE>
OFFICE FACILITY RELATED EXPENSES - Office facility related expenses include
rent, utilities, maintenance and general office expenditures for the Company's
corporate office in West Caldwell, New Jersey and NYFF's operations office in
Highlands, New Jersey. Office facility related expenses increased by 65.77% to
$89,913 for the three months ended March 31, 2002 compared to $54,238 for the
three months ended March 31, 2001. The increase primarily relates to the rent
that NYFF has paid since January 2002 to the purchaser of the Company's
Shrewsbury Avenue property in Highlands pending the relocation of the office
facility.

DEPRECIATION EXPENSE - Depreciation expense increased over 3.37% to $4,114 for
the three months ended March 31, 2002 compared to $3,980 for the three months
ended March 31, 2001. The increase is related to new asset purchases

CORPORATE EXPENSE - OTHER - Other corporate related expenses increased by
136.75% to $32,487 for the three months ended March 31, 2002 compared to $13,722
for the three months ended March 31, 2001. The increase is related to the
expenses associated with filing the 10-KSB and 10-QSB with the company's
financials statements, as well as various other SEC filings.

MARKETING EXPENSES - Marketing expenses increased by 104.73% to $8,873 for the
three months ended March 31, 2002 compared to $4,334 for the three months ended
March 31, 2001. The increase is related to increased efforts to attract new
passengers to the Company's existing service in Highlands as well as to its new
location n Keyport.

NEW SITE DEVELOPMENT COSTS - For the three-month period ended March 31, 2002,
the Company incurred $98,663 in expenses related to its ongoing development
efforts in Perth Amboy, New Jersey and Stamford, Connecticut as compared to
$138,335 for the same period in 2001, a decrease of $39,672. The expenditures
are comprised primarily of legal, engineering and architectural expenses.

GOODWILL AMORTIZATION - In the three months ended March 31, 2002 in accordance
with a new accounting pronouncement, the Company did not record an expense
related to the amortization of its goodwill. The Company did record amortization
of goodwill expense of $20,236 for the three months ended March 31, 2001, which
was related to its acquisition of NYFF.

INTEREST EXPENSE - Interest expense primarily relates to the Company's
capital-raising activities necessary to meet its current obligations and those
of NYFF, including the mortgages on the vessels and providing for the Company's
working capital needs and business development. Interest expense increased by
25.14% to $1,781,534 for the three months ended March 31, 2002 as compared to
$1,423,530 for the three months ended March 31, 2001. In the current period
under review approximately $1,395,000 is a non-cash charge related to the
issuance of restricted common stock as additional consideration for debt and
related extensions of maturities.


                                       19
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

      Since inception, the Company has funded its operations primarily through
capital raised from private placements of equity securities and debt, including
convertible promissory notes, and institutional financing. In the three months
ended March 31, 2002, the Company raised proceeds in the amount of $685,000
through the issuance of convertible promissory notes to accredited investors and
$125,000 from the issuance of other short-term financing arrangements.

      While NY Fast Ferry operations generates sufficient net cash flow to cover
its direct operating and overhead costs, it does not consistently generate cash
flow sufficient to cover principal and interest payments for both vessel
mortgages or to repay its line of credit. In the three weeks immediately after
the events of September 11, 2001, the Company's revenues were adversely affected
by the closing of lower New York harbor for several days and intermittent
closings thereafter, as well as the time it took for businesses in lower
Manhattan to reopen or relocate. Consequently, the Company became delinquent in
making these payments. The ship mortgages, held by debis Financial Services,
Inc. ("Debis"), each require monthly payments of principal and interest in the
amount of $56,719. As of May 10, 2002, the Company remains delinquent in these
payments.

      Debis also holds a note payable that was NY Fast Ferry's line of credit
prior to its acquisition and was assumed by the Company in the acquisition of NY
Fast Ferry. The note's outstanding balance at December 31, 2001 was
approximately $919,000. The note, also secured by mortgages on the two vessels,
originally required a final payment of $934,000 on December 10, 2000, which the
company was unable to make. These two preferred ship mortgages and the note are
further secured by cross collateralization agreements, assignment of personal
property, a pledge of a potential receivable arising out of a lawsuit against
the City of New York, and a Company guarantee. The Company and Debis are
presently in negotiation to restructure the payment of the debts.

      The Company, as of March 31, 2002, had a working capital deficiency of
$8,111,587. The holders of senior convertible promissory notes totaling
$5,083,000 plus accrued interest of approximately $800,000 have indicated to the
Company their intention to convert their debt if the Company is able to obtain a
significant equity infusion. Additionally, the holder of a secondary mortgage on
the vessels with a balance of $290,000 at December 31, 2001 and a principal
payment of $200,000 due on April 1, 2002 agreed to modify the terms of the loan
and accept interest payments only during the second quarter of 2002 and payments
of principal and interest of approximately $20,000 a month for nine months
thereafter. To date upon request from the Company it has received extensions
from substantially all lenders and note holders.

      In consideration for the new debt and extensions on existing debt for the
three months ended March 31, 2002, the Company issued to such lenders and note
holders shares of its restricted common stock having a fair market value of
approximately $3,300,000 and charged the allocated fair market value of the
shares to operations as financing costs over the terms of the notes and
extensions, respectively.


                                       20
<PAGE>
      The Company is aggressively pursuing federal funding that is presently
available for ferry service operators in the metropolitan New York area. Federal
funds are also available through the Federal Emergency Management Agency
("FEMA") for any costs or expenses incurred in providing new or expanded ferry
service in the aftermath of the September 11th attacks. The Company has
submitted to FEMA an application for reimbursement of approximately $500,000 of
expenditures and costs related to the start-up and operation of the Keyport
ferry service. The Company has received acknowledgement that the service
qualifies and reimbursement is pending the agency's determination of approved
expenditures. A federally sponsored bill through an emergency appropriations
funding included in the Department of Defense Appropriations has allocated $100
million specifically to expand ferry service between New Jersey and New York.
While the Company does not expect to receive funds directly from this
appropriation, management believes that Perth Amboy Redevelopment Agency (PARA)
has been identified as one of the expansion projects. Any funds PARA receives
will reduce the amount of funds the Company will need to rehabilitate the
planned Perth Amboy ferry site and to develop landside ferry facilities. If PARA
is unsuccessful in obtaining federal funding, the Company will be required to
fund the improvement of landside ferry facilities.

      In addition, the Perth Amboy Redevelopment Agency has authorized the sale
of $14 million in tax-free municipal bonds to be used specifically for the
development of high-speed ferry service that will be provided exclusively by the
Company through its operating subsidiary. Although there can be no assurances
that the Company will be successful in obtaining funding from any of these
sources, management is confident that as a currently operating ferry service
with over three years of operational history, it is favorably positioned to
secure some funding from these sources.

      In the planned development of its commercial operations, the Company's
combined losses are expected to continue as the Company expands its ferry routes
and until each new site becomes fully operational. The Company's ability to meet
its obligations in the ordinary course of business is dependent upon it
achieving operational profitability and continuing to obtain adequate funding.
The Company's ability to fulfill its expansion objectives is also dependent upon
its ability to secure financing for the acquisition of additional vessels. The
Company is currently in discussions with several financial entities that provide
funding for such equipment and it believes that it will be able to secure such
financing on acceptable terms.

      Although the Company has been successful to date in its efforts to raise
funds and negotiate extensions, there can be no assurances that the Company will
continue to be successful in its efforts to obtain funds and extensions.
However, it is management's belief, that through the sales of its common stock
and other financing arrangements combined with cash flow from operations, the
Company will continue to be successful in raising sufficient funds to meet its
anticipated cash needs for working capital and capital expenditures for at least
the next twelve months.

      In the event the Company's plans change, its assumptions change or prove
to be inaccurate or the proceeds of the interim financing or


                                       21
<PAGE>
cash flows prove to be insufficient to fund operations, the Company may find it
necessary or desirable to reallocate funds within the above described business
strategies, seek additional financing or curtail its activities. There can be no
assurance that additional financing will be available on terms favorable to the
Company, or at all, or that the Company will be able to negotiate more favorable
payment terms with its existing creditors. If adequate funds are not available
or are not available on acceptable terms, the Company may not be able to meet
its current obligations, take advantage of unanticipated opportunities, develop
new services or otherwise respond to unanticipated competitive pressures. Such
inability could have a material adverse effect on the Company's business,
financial condition and results of operations.


SUBSEQUENT EVENTS

      In April 2002, the Company received proceeds from a four-month senior
convertible promissory note in the amount of $350,000, bearing simple interest
at an annual rate of 10%. Principal and interest is payable at maturity. As
consideration for the note, the Company issued 350,000 shares of its restricted
common stock. The allocated fair market value of the securities issued will be
amortized over the term of the note. Additionally, the Company issued to a
financial consultant a convertible promissory note in the amount of $35,000, as
consideration for services rendered in connection with obtaining the proceeds.
The allocated fair market value of the securities issued will be amortized over
the term of the extension.

      In April 2002, the Company contracted to purchase for approximately $3.3
million a high-speed ferry vessel being constructed by Austal USA LLC ("Austal")
shipbuilders. As of April 30, 2002 the Company had paid Austal a total of
$425,000 in progress payments. The Company is in negotiations with a lender to
secure long-term financing for the vessel and expects that it will be successful
in obtaining such financing on acceptable terms. Delivery is expected in early
July 2002. The vessel will be utilized in the Company's Keyport service.

      In April 2002, the Company received proceeds of $160,000 from a 90-day
promissory note bearing interest at a rate of 18% per annum plus a placement fee
of 10%, for a total indebtedness of $176,000. Interest is to be paid monthly. As
consideration for the loan, the Company issued 60,000 shares of its restricted
common stock. The allocated fair market value of the securities issued will be
amortized over the term of the note.


      In April 2002, the Company finalized negotiations of an extension and
modification of a short-term mortgage note having a $200,000 principal payment
due on April 1, 2002. The modified terms of the note permit interest only
payments in the second quarter of 2002 and principal and interest payments of
approximately $20,000 per month for the following nine months. In consideration
for the extension, the Company issued 100,000 shares of its restricted common
stock. The allocated fair market value of the shares will be charged to
operations over the term of the extension as financing costs.


                                       22
<PAGE>
      On May 1, 2002, the Board of Directors issued to each of the CEO/President
and the Vice-President/Secretary five-year options to purchase 250,000 shares of
the Company's restricted common stock at an exercise price of $1.25 per share as
compensation for providing their personal guarantee on loans totaling $330,000.




FORWARD-LOOKING STATEMENTS

Discussions and information in this document, which are not historical facts,
should be considered forward-looking statements. With regard to forward-looking
statements, including those regarding the potential revenues from the additional
ferry operations from the Stamford Property, and the business prospects or any
other aspect of the Company, actual results and business performance may differ
materially from that projected or estimated in such forward-looking statements.
The Company has attempted to identify in this document certain of the factors
that it currently believes may cause actual future experience and results to
differ from its current expectations. In addition to the risks cited above
specific to the ferry business, differences may be caused by a variety of
factors, including but not limited to, adverse economic conditions, entry of new
and stronger competitors in the ferry business, insufficient parking space for
potential ferry customers, inadequate capital and the inability to obtain
funding from third parties, unexpected costs and the inability to obtain or keep
qualified personnel.


                                       23
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


On June 30, 2000, D. Weckstein & Co., Inc. ("Weckstein") filed suit against the
Company in the Supreme Court of the State of New York. The Complaint alleges
that the Company owes Weckstein $360,000 for services rendered by Weckstein in
connection with the Company's purchase of The Cigar Box, pursuant to a letter
agreement between Weckstein and the Company. During 2001 the discovery phase of
the litigation was completed. Upon completion of discovery, Weckstein filed a
motion for summary judgment, and affidavits and briefs were filed. In April
2002, the Court denied Weckstein's motion for summary judgment. On May 10, 2002
the parties received notice that a trial date has been set for July 29, 2002.

On August 3, 2000, the Company received a notice from a subsidiary of The
Connecticut Light & Power Co. (the "Landlord"), terminating its lease for the
property that is the proposed site for the Company's Stamford, Connecticut ferry
terminal. The Landlord based the termination of the lease on the failure of the
Company to get certain necessary permits for its use of the site. The Company
disputes the Landlord's right to terminate the lease. Te parties were unable to
resolve the material issues. As a result the legal remedies sought by both the
Landlord and the Company were pursued. Trial of the issues commenced in August
2001 before the Connecticut Superior Court. The trial was concluded in February
2002. Briefs were filed in April 2002 and the Company is awaiting the court's
decision, which is expected in late May 2002.


ITEM 2.  CHANGES IN SECURITIES


(a)  Not Applicable
(b)   Not Applicable.

(c)   Unregistered Equity Securities of the Companies Sold During the Quarter

      During January and March 2002, the Company issued 1,000 shares of its
restricted common stock to five purchasers of an aggregate principal amount of
$35,000 of the Company's convertible promissory notes. The sales were
conducted in reliance on Section 4(2) of the Act and Rule 506 and were made
only to accredited investors. The allocated fair market value of the securities
issued will be amortized over the term of the notes.



                                       24
<PAGE>
      During February 2002, the Company sold 5,000 shares of its restricted
common stock at a price of $1.00 per share to an accredited investor and current
stockholder. The sale was conducted in reliance on Section 4(2) of the Act and
Rule 506.

      In February 2002, the Board of Directors approved the issuance of 100,000
shares of restricted common stock to the Company's CEO/President to replace
stock that he had placed as collateral for a loan and subsequently surrendered
to a note holder as consideration for an extension of that loan and satisfaction
of interest owed, which permitted the Company to realize additional cash from
the December 2001 sale of its Shrewsbury Avenue property. The allocated fair
market value of the shares was charged to operations.

      In March 2002, as consideration for two 90-day notes totaling $50,000 and
bearing interest at the rate of 12% per annum, the Company issued to two note
holders an aggregate of 15,000 shares of its restricted common stock and
warrants to purchase 30,000 shares of its common stock at $1.25 per share
exercisable for a three-year period. The allocated fair market value of the
securities issued will be amortized over the term of the note. Each
security holder is an accredited investor and the transaction was conducted in
reliance on Section 4(2) of the Act and Rule 506, promulgated thereunder.

      During January, February and March 2002, as consideration for a one-year
extension of the maturity dates of $35,000 aggregate principal amount of
promissory notes, the Company issued to the four holders of maturing convertible
promissory notes an aggregate of 875 shares of its restricted common stock. The
allocated fair market value of the securities issued will be amortized over
the term of the extension. Each securityholder is an accredited investor and
the transaction was conducted in reliance on Section 4(2) of the Act and Rule
506, promulgated thereunder.

      In February 2002, the Company issued to the holders of Senior Convertible
Promissory notes a total of 2,211,500 shares of its restricted common stock
having an allocated fair market value of $2,764,375 on the date of issuance, as
consideration for a six-month extension of notes totaling $4,373,000. The
allocated fair market value of the securities issued will be allocated over the
term of the extension. Additionally, the Company issued to a financial
consultant a senior convertible promissory note in the amount of $100,000 and
50,000 shares of its restricted common stock as consideration for services
rendered in connection with obtaining the extension. The allocated fair market
value of the securities issued will be amortized over the term of the extension.
Each securityholder is an accredited investor and the transaction was conducted
in reliance on Section 4(2) of the Act and Rule 506, promulgated thereunder.

                                       25
<PAGE>
      In March 2002, the Company issued to a financial consultant, Capital
Research, Ltd., warrants to purchase 50,000 shares of the Company's common stock
at $2.00 per share in exchange for services rendered during the quarter ended
March 31, 2002. These securities were issued in reliance on Section 4(2) of the
Act.

      In March 2002, the Company issued to certain note holders 650,000 shares
of its restricted common stock as consideration for 10.0% senior CPNs
aggregating $650,000. The allocated fair market value of the securities issued
will be amortized over the term of the notes. In connection with this
transaction, the Company issued a promissory note in the principal amount of
$50,000 to a financial consultant in consideration for services rendered in
connection with this transaction. Each securityholder is an accredited investor
and the transaction was conducted in reliance on Section 4(2) of the Act and
Rule 506, promulgated thereunder.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K


(a)   Exhibits.

      10-17       Austal USA LLC Shipbuilding Contract dated March 28, 2002.
                  Filed herewith.


(b)   Reports on Form 8-K: None.


                                       26
<PAGE>
                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-QSB to be signed on its behalf by the
undersigned thereunto duly authorized.




                                     LIGHTHOUSE FAST FERRY, INC.



Date: May 15, 2002            By:    /s/ Anthony Cappaze
                                  ----------------------------------
                                         Anthony Cappaze, President
                                         Chief Executive Officer and
                                         Director


Date: May 15, 2002            By:    /s/ Anthony Colasanti
                                  ----------------------------------
                                         Anthony Colasanti, Vice
                                         President, Secretary and
                                         Director



Date: May 15, 2002            By:    /s/ Patricia Beene
                                  ----------------------------------
                                         Patricia Beene,
                                         Chief Financial Officer


                                       27