SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

(Mark One)


[X]  Annual report  pursuant to 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 for the transition period from ------------ to --------------

                        Commission file number: 000-28457

                                F-R-M CORPORATION
                     --------------------------------------
        (Exact name of small business issuer as specified in its charter)

                                Nevada 86-0996897
      (State or other jurisdiction of (I.R.S. Employer Identification No.)
                         incorporation or organization)


                               18036 N 15th Street
                                Phoenix, AZ 85022
                   ------------------------------------------
               (Address of principal executive office) (Zip Code)

                                 (602) 485-1346
                             ----------------------
                           (Issuer's telephone number)



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

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

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K.

                                     Yes  No _X__.

At December 31, 2000,  the aggregate  market value of all shares of voting stock
held by non-affiliates was $0.00. In determining this figure, the Registrant has
assumed  that  all  directors  and  executive  officers  are  affiliates.   Such
assumption shall not be deemed  conclusive for any other purpose.  The number of
shares  outstanding  of each  class  of the  Registrant's  common  stock,  as of
December  31,  2000,  was as follows:  Common  Stock $.001 par value,  1,000,000
shares.

Total revenues for fiscal year ended December 31, 2000: $0

At December  31,  2000,  the number of shares of common  stock  outstanding  was
1,000,000.

Transitional Small Business Disclosure Format (check one): Yes   ; No X
                                                              ---    --
PART I

ITEM 1.  DESCRIPTION OF BUSINESS

The Company has not engaged in any operations other than organizational matters.
F-R-M  Corporation,  a Nevada  corporation  (the "Company") was  incorporated on
April 29, 1996, and was formed specifically to be a "clean public shell" and for
the purpose of either  merging  with or  acquiring  an  operating  company  with
operating history and assets.

     The primary  activity of the Company has involved and will involve  seeking
merger or acquisition  candidates with whom it can either merge or acquire.  The
Company has not  selected  any company  for  acquisition  or merger and does not
intend to limit  potential  acquisitions  candidates to any particular  field or
industry,  but does retain the right to limit acquisition or merger  candidates,
if it so chooses, to a particular field or industry.  The Company's plans are in
the conceptual stage only.

     The proposed business activities described herein classify the Company as a
"blank  check" or "shell  company"  whose sole purpose at this time is to locate
and consummate a merger or acquisition. Many states have enacted statutes, rules
and  regulations  limiting the sale of securities of "blank check"  companies in
their  respective  jurisdictions.  Management does not believe it will undertake
any  efforts to cause a trading  market to develop in the  Company's  securities
until such time as the Company has  successfully  implemented  its business plan
described  herein.  However,  if the Company  intends to facilitate the eventual
creation  of a public  trading  market in its  outstanding  securities,  it must
consider  that the Company's  securities,  when  available for trading,  will be
subject to a Securities and Exchange  Commission rule that imposes special sales
practice  requirements upon  broker-dealers  who sell such securities to persons
other than established  customers or accredited  investors.  For purposes of the
rule, the phrase  "accredited  investors" means, in general terms,  institutions
with assets in excess of $5,000,000, or individuals having a net worth in excess
of $1,000,000 or having an annual  income that exceeds  $200,000 (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker-dealer  must make a special  suitability  determination for
the purchaser and receive the purchaser's  written  agreement to the transaction
prior  to  the  sale.   Consequently,   the  rule  may  affect  the  ability  of
broker-dealers to sell the Company's  securities and also may affect the ability
of purchasers in this offering to sell their securities in any market that might
develop therefor.

Competition

     The Company expects to encounter substantial  competition in its efforts to
locate attractive opportunities,  primarily from business development companies,
venture capital  partnerships and  corporations,  venture capital  affiliates of
large  industrial  and financial  companies,  small  investment  companies,  and
wealthy  individuals.  Many of these  entities will have  significantly  greater
experience,  resources  and  managerial  capabilities  than the Company and will
therefore  be in a  better  position  than  the  Company  to  obtain  access  to
attractive business opportunities.

Employees

     As of the date hereof,  the Company does not have any  employees and has no
plans for retaining employees until such time as the Company's business warrants
the  expense,  or until the  Company  successfully  acquires  or merges  with an
operating  business.  The Company may find it  necessary  to  periodically  hire
part-time clerical help on an as-needed basis.

ITEM 2.  DESCRIPTION OF PROPERTY

The Company's  executive office is located at 18036 North 15th Street,  Phoenix,
AZ 85022. The Company shares office space with another company controlled by the
president  and pays a nominal  amount for the use of the office,  the  telephone
system,  the copying equipment and the computers.  The Company owns no equipment
and does not plan to purchase anything more than daily activities would require.

The  company  has  no   outstanding   obligations   other  than  equity  to  its
shareholders.


ITEM 3.  LEGAL PROCEEDINGS

     No material  legal  proceedings  to which the Company (or its  director and
officer in his capacity as such) is party or to which property of the Company is
subject is pending and no such material proceeding is known by management of the
Company to be contemplated.

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

     None.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no  established  public  trading  market for the  Units,  and it is not
anticipated that such a market will develop.


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

     The following  discussion  should be read in conjunction with the Financial
Statements and notes thereto.

OPERATIONS

     The  Company  intends  to  seek,  investigate  and,  if such  investigation
warrants, acquire an interest in one or more business opportunities presented to
it by persons or firms who or which  desire to seek  perceived  advantages  of a
publicly held corporation.

     The Company will not restrict its search to any specific business, industry
or geographical  location, and the Company may participate in a business venture
of virtually any kind or nature.  The discussion of the proposed  business under
this  caption  and  throughout  is  purposefully  general and is not meant to be
restrictive of the Company's  virtually  unlimited  discretion to search for and
enter into potential business opportunities.

     The Company may obtain funds in one or more private  placements  to finance
the  operation  of any  acquired  business,  if  necessary.  Persons  purchasing
securities in these placements and other  shareholders  will likely not have the
opportunity  to  participate in the decision  relating to any  acquisition.  The
Company's  proposed business is sometimes  referred to as a "blind pool" because
any investors will entrust their investment  monies to the Company's  management
before they have a chance to analyze any  ultimate  use to which their money may
be put.  Consequently,  the Company's  potential success is heavily dependent on
the Company's management,  which will have unlimited discretion in searching for
and entering into a business  opportunity.  The sole officer and director of the
Company  likely has had no experience  in any proposed  business of the Company.
There can be no  assurance  that the Company  will be able to raise any funds in
private placement.

LIQUIDITY AND CAPITAL RESOURCES

     The Company  remains in the  development  stage and, since  inception,  has
experienced  no  significant   change  in  liquidity  or  capital  resources  or
stockholder's  equity.  The  Company's  balance  sheet as of December 31, 2000,
reflects a current asset value of $0.00, and a total asset value of $0.00.

     The Company  will carry out its plan of business as  discussed  above.  The
Company cannot  predict to what extent its liquidity and capital  resources will
be diminished prior to the consummation of a business combination or whether its
capital  will be  further  depleted  by the  operating  losses  (if  any) of the
business entity which the Company may eventually acquire.

RESULTS OF OPERATIONS

     During the period  from April 29,  1996  through  December  31,  2000,  the
Company  has  engaged in no  significant  operations  other than  organizational
activities  and  preparation  for  registration  of  its  securities  under  the
Securities Exchange Act of 1934. No revenues were received by the Company during
this period.

     For the current fiscal year, the Company anticipates  incurring a loss as a
result of organizational  expenses,  expenses associated with registration under
the Securities  Exchange Act of 1934, and expenses  associated with locating and
evaluating acquisition candidates. The Company anticipates that until a business
combination  is completed with an  acquisition  candidate,  it will not generate
revenues other than interest income, and may continue to operate at a loss after
completing  a  business  combination,  depending  upon  the  performance  of the
acquired business.

Need for Additional Financing

     The Company  believes that its existing  capital will be sufficient to meet
the Company's cash needs,  including the costs of compliance with the continuing
reporting requirements of the Securities Exchange Act of 1934, as amended, for a
period of approximately two years. Accordingly, in the event the Company is able
to complete a business  combination  during this period, it anticipates that its
existing  capital  will be  sufficient  to  allow it to  accomplish  the goal of
completing a business  combination.  There is no  assurance,  however,  that the
available funds will  ultimately  prove to be adequate to allow it to complete a
business  combination,  and  once  a  business  combination  is  completed,  the
Company's needs for additional financing are likely to increase substantially.


FEDERAL INCOME TAX ASPECTS OF INVESTMENT IN THE COMPANY

     The  discussion  contained  herein has been  prepared by the Company and is
based on existing law as contained in the Code,  amended United States  Treasury
Regulations ("Treasury Regulations"), administrative rulings and court decisions
as of the date of this  Annual  Report.  No  assurance  can be given that future
legislative  enactments,  administrative  rulings  or court  decisions  will not
modify the legal basis for  statements  contained in this  discussion.  Any such
development may be applied retroactively to transactions  completed prior to the
date thereof,  and could contain  provisions  having an adverse  affect upon the
Company and the holders of the Common Stock. In addition,  several of the issues
dealt with in this summary are the subjects of proposed and  temporary  Treasury
Regulations.  No assurance can be given that these  regulations  will be finally
adopted in their present form.

FORWARD LOOKING STATEMENT

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of  Operations  includes  a number of  forward-looking  statements  that
reflect  Management's  current views with respect to future events and financial
performance. Those statements include statements regarding the intent, belief or
current  expectations  of the Company and members of its management team as well
as the assumptions on which such statements are based. Prospective investors are
cautioned that any such forward-looking  statements are not guarantees of future
performance  and involve  risk and  uncertainties,  and that actual  results may
differ materially from those  contemplated by such  forward-looking  statements.
Readers are urged to carefully review and consider the various  disclosures made
by the Company in this report and in the Company's  other reports filed with the
Securities  and  Exchange  Commission.  Important  factors  currently  known  to
Management  could  cause  actual  results  to differ  materially  from  those in
forward-looking  statements.  The Company  undertakes no obligation to update or
revise forward-looking statements to reflect changed assumptions, the occurrence
of unanticipated  events or changes in the future  operating  results over time.
The Company believes that its assumptions are based upon reasonable data derived
from and known about its business and operations and the business and operations
of the Company.  No assurances are made that actual results of operations or the
results of the Company's future  activities will not differ  materially from its
assumptions.

ITEM 7.  FINANCIAL STATEMENTS

     The financial  statements  are included  beginning at F-1. See Index to the
Financial Statements.

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

     None.

                                    PART III

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

Directors and Executive Officers.

     The members of the Board of Directors  of the Company  serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors.  Information as to the
director and executive officer of the Company is as follows.

Name

          Philip M. Young                  President, Chairman of the Board
                                           of Directors
          David M. Young                   Vice President
                                           & Secretary, Director

Conflicts of Interest

     The Company has no  arrangement,  understanding  or intention to enter into
any transaction for participating in any business  opportunity with any officer,
director,  or principal  shareholder  or with any firm or business  organization
with which such persons are  affiliated,  whether by reason of stock  ownership,
position as an officer or director, or otherwise.

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

     Section  16(a)  of the  Exchange  Act,  requires  the  Company's  officers,
directors and persons who  beneficially  own more than ten percent of the Common
Stock to file reports of securities ownership and changes in such ownership with
the Securities and Exchange Commission. Officers, directors and greater than ten
percent  beneficial  owners  also  are  required  by  rules  promulgated  by the
Securities  and  Exchange  Commission  to furnish the Company with copies of all
Section 16(a) forms they file.

ITEM 10.  EXECUTIVE COMPENSATION

     No  compensation  is paid or anticipated  to be paid by the Company.  It is
possible that upon an acquisition  some  compensation may be paid to management.
On acquisition of a business  opportunity,  current management may resign and be
replaced  by  persons  associated  with  the  business   opportunity   acquired,
particularly if the Company  participates in a business opportunity by effecting
a reorganization,  merger or consolidation.  If any member of current management
remains after effecting a business opportunity  acquisition,  that member's time
commitment  will  likely  be  adjusted  based on the  nature  and  method of the
acquisition and location of the business which cannot be predicted. Compensation
of management will be determined by the new board of directors, and shareholders
of the  Company  will  not  have  the  opportunity  to vote on or  approve  such
compensation.

ITEM 11.  SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT


The  following  table sets  forth,  as of  December  31,  2000,  the  beneficial
ownership of the  Company's  Common Stock by each person known by the Company to
beneficially own more than five percent of the Company's Common Stock, including
options,  outstanding  as of such date and by the officers and  directors of the
Company as a group. All shares are owned directly.

Title of Name and address of Amount and Nature Percent Class Beneficial Owner of
beneficial owner

Common          Philip M. Young         446,500 44.65%    Stock Restricted
Common          David M. Young          446,500 44.65%    Stock Restricted

The company has no authorized or outstanding options, warrants,  preferred stock
or convertible debt.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   During the past two fiscal years,  there have been no transactions  between
the Company and any officer,  director, nominee for election as director, or any
shareholder  owning greater than five percent (5%) of the Company's  outstanding
shares, nor any member of the above referenced individuals' immediate family.

     The  Company's  officers  and  directors  are  subject to the  doctrine  of
corporate  opportunities only insofar as it applies to business opportunities in
which the  Company has  indicated  an  interest,  either  through  its  proposed
business  plan or by way of an express  statement  of interest  contained in the
Company's minutes.  If directors are presented with business  opportunities that
may  conflict  with  business   interests   identified  by  the  Company,   such
opportunities  must be promptly  disclosed  to the Board of  Directors  and made
available to the Company.  In the event the Board shall reject an opportunity so
presented and only in that event,  any of the  Company's  officers and directors
may  avail  themselves  of such an  opportunity.  Every  effort  will be made to
resolve any  conflicts  that may arise in favor of the Company.  There can be no
assurance, however, that these efforts will be successful.

     In the event of a successful  acquisition or merger, a finder's fee, in the
form of cash or securities,  may be paid to persons instrumental in facilitating
the transaction.  The Company has not established any criteria or limits for the
determination  of a finder's fee,  although it is likely that an appropriate fee
will be based upon  negotiations  by the  Company and the  appropriate  business
opportunity and the finder. Such fees are estimated to be customarily between 1%
and 5% of the size of the transaction,  based upon a sliding scale of the amount
involved.  Management  cannot at this time  make an  estimate  as to the type or
amount of a  potential  finder's  fee that might be paid,  but is expected to be
comparable to consideration  normally paid in like transactions.  It is unlikely
that a finder's fee will be paid to an  affiliate of the Company  because of the
potential  conflict of interest that might result. Any such fee would have to be
approved by the shareholders or a disinterested  Board of Directors.  See Item 1
"Description of Business - Form of Potential Acquisition or Merger" above.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K


           (a)       EXHIBITS


The following  documents are filed herewith or have been included as exhibits to
previous  filings  with  the  Commission  and are  incorporated  herein  by this
reference:


           Exhibit No.         Exhibit


           *3                  Articles of Incorporation

           *3.2                Bylaws

           *3.1                Amended Articles of Incorporation

        *       Except as indicated otherwise, all exhibits are incorporated by
reference to Registrant's Registration Statement on Form 10-SB.

           (b) Report on Form 8-K:

Registrant  has not filed any Form 8-K  during  the last  quarter  of the fiscal
year:


SIGNATURES

In accordance  with the  requirements  of the  Securities  Exchange Act of 1934,
theRegistrant  caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



03/27/2001                                              /s/ Philip M. Young
                                                        ---------------------
                                                        Philip M. Young
                                                        President
                                                        F-R-M Corporation



C O N T E N T S


Independent Auditors' Report                           F-1

Balance Sheet                                          F-2

Statements of Operations                               F-3

Statements of Stockholders' Equity (Deficit)           F-4

Statements of Cash Flows                               F-5

Notes to the Financial Statements                      F-6


INDEPENDENT AUDITORS' REPORT

To the Board  of Directors and Stockholders
F-R-M Corporation
Phoenix, Arizona

We have  audited  the  accompanying  balance  sheet of F-R-M  Corporation  as of
December  31,  2000,  and the  related  statements  of  operations,  changes  in
stockholders'  equity  (deficit),  and cash  flows  for each of the years in the
two-year  period ended December 31, 2000, and for the period from April 29, 1996
(inception)  to  December  31,  2000.   These   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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


In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of F-R-M  Corporation.  as of
December 31, 2000, and the results of its operations and its cash flows for each
of the years in the two-year  period ended December 31, 2000, and for the period
from April 29, 1996  (inception)  to  December  31,  2000,  in  conformity  with
generally accepted accounting principles.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements,  the  Company  is in the  development  stage  and has not  commenced
operations.  Its ability to continue as a going  concern is  dependent  upon its
ability to develop  additional  sources of capital,  and/or  achieve  profitable
operations.  These  conditions  raise  substantial  doubt  about its  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of these uncertainties.

Braverman & Company, P.C.
Phoenix, Arizona
January 15, 2001


                                       F-1




                                F-R-M CORPORATION
                         ( a Development Stage Company)
                                  BALANCE SHEET
                                December 31, 2000

                                     ASSETS
<TABLE>
<CAPTION>

<S>                                                                   <C>
        TOTAL ASSETS                                                  $            -
                                                                      ==============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

        TOTAL LIABILITIES                                             $            -
                                                                      --------------

        COMMITMENTS AND CONTINGENCIES

        STOCKHOLDERS' EQUITY (DEFICIT)

             Common stock, par value $.001, 25,000,000 shares
                  authorized, 1,000,000 issued and outstanding                 1,000
             Paid-in capital                                                   1,000
             Contributed capital                                              16,142
            (Deficit) accumulated during the development stage               (18,142)
                                                                      --------------
                Total Stockholders' Equity (Deficit)                               -

                                                                      $            -
                                                                      ==============
</TABLE>

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                       F-2

                                F-R-M CORPORATION
                         ( a Development Stage Company)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                           Cummulative
                                                                              from
                                                                             April 29,
                                                                               1996
                                                                            (Inception)
                                                  For the Years Ended          to
                                                      December 31,         December 31,
                                                   2000         1999          2000
                                              -----------  -----------  ------------
<S>                                                  <C>          <C>           <C>
REVENUE                                       $         -  $         -  $          -
                                              -----------  -----------  ------------
EXPENSES:
      General and administrative                     7100        2,278        18,142
                                              -----------  -----------  ------------
        Total Expenses                               7100        2,278        18,142
                                              -----------  -----------  ------------
NET (LOSS)                                    $    (7,100) $    (2,278) $    (18,142)
                                              ===========  ===========  ============
NET (LOSS) PER COMMON SHARE-Basic             $     (0.01)        *
                                              -----------  -----------
WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                    1,000,000    1,000,000
                                              ===========  ===========
* Less than $(.01)
</TABLE>

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                        F-3

                                F-R-M CORPORATION
                         ( a Development Stage Company)
             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE PERIOD FROM APRIL 29, 1996 (INCEPTION)
                               TO DECEMBER 31,2000
<TABLE>
<CAPTION>
                                                                                                     (Deficit)
                                                                                                    Accumulated
                                                                                                     During the
                                                   Common Stock              Paid-in    Contributed  Development
                                               Shares         Amount         Capital     Capital        Stage        Total
                                             -------------------------  ------------  -----------  ------------  ---------
<S>                                                 <C>          <C>            <C>          <C>           <C>        <C>
Balances, April 29, 1996                                -  $         -  $          -  $         -   $         - $        -
   Issuance of stock to insiders
     for services on June 1, 1996
     at $1 per share                                2,000        2,000                                               2,000
  Contributed capital                                                                       1,759                    1,759
  Net (loss)                                                                                             (3,759)    (3,759)
                                             ------------  -----------  ------------  -----------  ------------  ---------
Balances, December 31, 1996                         2,000        2,000             -        1,759        (3,759)         -
  Contributed capital                                                                       2,613                    2,613
  Net (loss)                                                                                             (2,729)    (2,729)
                                             ------------ ------------  ------------  -----------  ------------  ---------
Balances, December 31, 1997                         2,000        2,000             -        4,372        (6,488)      (116)
  Contributed capital                                                                       2,160                    2,160
  Net (loss)                                                                                             (2,276)    (2,276)
                                             ------------  -----------  ------------  -----------  ------------  ---------
Balances, December 31, 1998                         2,000        2,000             -        6,532        (8,764)      (232)
  Stock split, 500:1 May 5, 1999                  998,000       (1,000)        1,000                                     -
  Contributed capital                                                                       2,160                    2,160
  Net (loss)                                                                                             (2,278)    (2,278)
                                             ------------  -----------  ------------  -----------  ------------  ---------
Balances, December 31, 1999                     1,000,000        1,000         1,000        8,692       (11,042)      (350)
  Contributed capital                                                                       7,450                    7,450
  Net (loss)                                                                                             (7,100)    (7,100)
                                             ------------  -----------  ------------  -----------  ------------  ---------
Balances, December 31, 2000                     1,000,000  $     1,000  $      1,000  $    16,142  $    (18,142) $       -
                                             ============ ============  ============  ===========  ============  =========
</TABLE>

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                                       F-4


                                F-R-M CORPORATION
                         ( a Development Stage Company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                            Cummulative
                                                                              from
                                                                             April 29,
                                                                               1996
                                                                            (Inception)
                                                    For the Years Ended        to
                                                        December 31,        December 31,
                                                     2000         1999          2000
CASH FLOWS FROM OPERATING ACTIVITIES:           ---------    ---------    ----------
<S>                                                   <C>        <C>         <C>
      Net (loss) from operations                 $ (7,100)  $   (2,278) $    (18,142)
      Adjustments to reconcile net (loss) to net
         cash used by operating activities:
        Common stock issued for services                                       2,000
        Capital contributed for services            7,450        2,160        16,142
        Changes in:
              Accounts payable                       (350)         118             -
                                                ---------    ---------   -----------
        Net Cash From Operating Activities     $        -   $        -  $          -
                                                ---------    ---------   -----------

NET INCREASE IN CASH                                    -            -             -

CASH, beginning of period                               -            -             -
                                                ---------    ---------   -----------
CASH, end of period                            $        -   $        -  $          -
                                                =========    =========   ===========
</TABLE>


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                       F-5

                                F-R-M CORPORATION
                         (A Development Stage Company)
                         NOTES TO FINANCIAL STATEMENTS



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

History

F-R-M  Corporation  (the  Company),  is in the  development  stage as defined in
Financial   Accounting   Standards  Board  Statement  No.  7.  It  is  a  Nevada
corporation, formed April 29, 1996. Since inception it has had no operations and
is in the process of seeking a merger  candidate.  Its year end is December  31.
Pursuant  to the  filing  of a Form  10-SB  with  the  Securities  and  Exchange
Commission, it became a reporting company in January, 2001.

Going Concern

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of  liabilities  in the normal  course of  business.  The  Company's  ability to
continue in existence is dependent on its ability to develop  additional sources
of capital,  locate and merge with a  profitable  merger  candidate,  or achieve
profitable  operations  as a result  of a  merger.  The  accompanying  financial
statements do not include any adjustments  that might result from the outcome of
these uncertainties.

Income Taxes

The Company uses the liability method of accounting for income taxes pursuant to
Statement of Financial Accounting Standards No. 109. Under this method, deferred
income taxes are recorded to reflect the tax  consequences  in future periods of
temporary  differences between the tax basis of assets and liabilities and their
financial amounts at year end.


For income tax purposes,  substantially all deductible expenses incurred to date
must be  deferred  until the  Company  commences  business  and then they may be
charged against  operations  over a 60-month period or permanently  capitalized.
Since the  Company is not in  business  as of  December  31,  2000,  accumulated
deductible  expenses  incurred since  inception of $5,275 , resulted in a $1,055
deferred  tax asset.  A valuation  allowance of $1,055 has been  provided  since
there is no assurance of future  taxable  income.  Tax deductible  losses,  when
provided, can be carried forward for 20 years until utilized.

Earnings (loss) Per Common Share

Loss per common share has been calculated based upon the weighted average number
of common shares  outstanding during the period in accordance with the Statement
of Financial Accounting Standards Statement No. 128, "Earnings per Share".

Use of Estimates in the Preparation of Financial Statements

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

NOTE 2 - RELATED PARTY TRANSACTIONS

Contributed Captial

Capital contributed by officers and shareholders from inception through December
31, 1999,  have been  expensed in the  accompanying  statements  of  operations.
Capital contributions consist of the following:

                                        2000         1999     From Inception
Costs paid:
  Corporate fees                  $      100    $     118    $        550
  Accounting  and audit fees           4,725            0           4,725
                                     -------      -------       ---------
Total costs paid                       4,825          118           5,275
                                     -------      -------       ---------
Value of services:
 Annual transfer fees                    115            0             607
  Office, rent and utilities           1,200        1,200           5,700
  Management                             960          960           4,560
                                     -------      -------       ---------
Total value of services                2,302        2,160          10,894
                                     -------      -------       ---------
Total Contributed Capital          $   7,100    $   2,278     $    16,142
                                     -------      -------       ---------

The annual transfer fees and office, rent and utilities above were provided by a
stock transfer company controlled by two of the Company's officers/shareholders.

Common Stock

In May, 1999 the Company  increased its  authorized  shares of common stock from
25,000 to 25,000,000  at a par value of $.001 per share.  It also approved a 500
for 1 forward stock split.  The  accompanying  financial  statements  have given
effect to these changes.



                                      F-6