<PAGE>

                       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 0-14039

                                 eNUCLEUS, INC.

                 (Name of Small Business Issuer in its charter)



                 DELAWARE                             11-2714721
       (State or other jurisdiction      (I.R.S. Employer Identification No.)
      of corporation or organization)

                             15545 South 71st Court
                              Orland Park, IL 60462
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (708)444-7300

     Check whether the Registrant (l) filed all reports required to be filed by
Section 13 or 15(d) of the Securities and Exchange Act during the past 12 months
(or for such shorter periods 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
         -----    -----

     As of April 19, 2002 the number of shares that are estimated to be
outstanding under the issuance of new common stock is approximately 20,000,000
shares.

     Transitional Small Business Disclosure Format (check one) Yes      No  X
                                                                  -----   -----


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                                                                         Page 1


<PAGE>


PART I
                              FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS

          Condensed Consolidated (Unaudited) Balance Sheets as of March 31,
               2002 and December 31, 2001.
          Condensed Consolidated (Unaudited) Statements of Operations for the
               three months ended March 31, 2002 and 2001 (Predecessor Company).
          Condensed Consolidated (Unaudited) Statements of Cash Flows for the
               three months ended March 31, 2002 and 2001 (Predecessor Company).
          Notes to Condensed Consolidated (Unaudited) Financial Statements.


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS


                                     PART II
                                OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

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

ITEM 5.   OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

FORM 10-QSB SIGNATURE PAGE



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                                                                         Page 2


<PAGE>


PART I
                              FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS
                                 eNUCLEUS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


                                                    MARCH 31,        DEC. 31,
                                                      2002             2001
                                                   -----------     -----------
ASSETS
Current assets:
  Cash..........................................   $       791     $       808
  Accounts receivable, net......................        15,079          13,339
  Other current assets..........................        38,815          51,348
                                                   -----------     -----------
    Total current assets........................        54,685          65,495
                                                   -----------     -----------

  Property and equipment, net...................     1,756,751       1,850,597
  Goodwill  ....................................    15,202,356      15,202,356
  Other assets........................ .........       100,000         100,000
                                                   -----------     -----------
    Total assets................................   $17,113,792     $17,218,448
                                                   ===========     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Notes payable.................................   $   568,018     $   633,431
  Accounts payable..............................       300,594         188,405
  Accrued expenses..............................       624,879         639,201
                                                   -----------     -----------
    Total current liabilities...................     1,493,491       1,461,037
                                                   -----------     -----------

  Long-term liabilities.........................     1,433,928       1,272,069
                                                   -----------     -----------
    Total liabilities...........................     2,927,419       2,733,106
                                                   -----------     -----------

Stockholders' equity:

  New common equity - issuable..................    14,687,736      14,687,736
  Accumulated deficit...........................      (501,363)       (202,394)
                                                   -----------     -----------
    Total stockholders' equity..................    14,186,373      14,485,342
                                                   -----------     -----------

  Total liabilities and stockholders' equity       $17,113,792     $17,218,448
                                                   ===========     ===========



       See accompanying notes to condensed unaudited financial statements.


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                                                                         Page 3

<PAGE>



                                 eNUCLEUS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                   REORGANIZED     PREDECESSOR
                                                     COMPANY         COMPANY
                                                  THREE MONTHS    THREE MONTHS
                                                     ENDED           ENDED
                                                 March 31, 2002  March 31, 2001
                                                 --------------  --------------

Revenue  .......................................   $    33,318     $   178,936
Cost of revenue.................................        18,325         105,931
                                                   -----------     -----------
  Gross profit..................................        14,993          73,005

Operating expenses..............................       167,594         532,095
Bankruptcy related expenses. ...................        38,376              --
Depreciation and amortization expense...........        93,846         147,368
                                                   -----------     -----------
  Operating loss................................      (284,823)       (606,458)

Interest and other income (expenses), net.......       (14,146)       (371,690)
Income tax expense..............................            --              --
                                                   -----------     -----------
Net income (loss)...............................   $  (298,969)    $  (978,148)
                                                   ===========     ===========



Basic and diluted net loss per common
  share.........................................   $     (0.01)    $     (0.07)
                                                   ===========     ===========
Weighted average shares outstanding -
  basic and diluted.............................    20,009,898      13,238,321
                                                   ===========     ===========



       See accompanying notes to condensed unaudited financial statements.



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                                                                         Page 4



<PAGE>



                                 eNUCLEUS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                     REORGANIZED COMPANY    PREDECESSOR COMPANY
                                      THREE MONTHS ENDED     THREE MONTHS ENDED
                                        MARCH 31, 2002          MARCH 31, 2001
                                      ------------------     ------------------

Cash Flows from operating activities:
  Net loss...........................    $  (298,969)            $  (978,148)
Adjustments to reconcile net loss
  to net cash provided by (used in)
  operating activities:
  Depreciation and amortization......         93,846                 147,368
  Compensation expense related to
    issuance of equity security......             --                 107,450
  Changes in operating assets
    and liabilities..................        108,660                 189,473
                                         -----------             -----------
  Net cash used in continuing
    operations.......................        (96,463)               (533,857)
  Net cash used in discontinued
    operations.......................             --                  36,306
  Net cash used in operating
    activities.......................       ( 96,463)               (497,551)
                                         -----------             -----------
Cash flows from investing activities:
  Capital expenditures...............             --                 (47,081)
                                         -----------             -----------
    Net cash used for investing
      activities..................                --                 (47,081)
                                         -----------             -----------

Cash flows from financing activities:
  Proceeds from notes payable........         96,446                 455,110
  Proceeds from issuance of related
    party payables...................             --                  88,593
                                         -----------             -----------
    Net cash provided by financing
      activities.....................         96,446                 543,703
                                         -----------             -----------

  Increase (decrease) in cash........            (17)                   (929)
  Cash, beginning of period..........            808                   1,452
                                         -----------             -----------
  Cash, end of period................    $       791             $       523
                                         ===========             ===========




       See accompanying notes to condensed unaudited financial statements.


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                                                                         Page 5


<PAGE>


                                 eNUCLEUS, INC.
        NOTES TO CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS
                                 March 31, 2002

INTRODUCTION: SIGNIFICANT EVENTS

         On November 6, 2001, the Company's Plan of Reorganization was confirmed
thereby enabling the Company to successfully emerge from its restructuring under
Chapter 11 of the U.S. Bankruptcy Code. The Company's operations immediately
following confirmation and throughout the date of this filing, have been
substantially limited to securing the financing needed to enable the Company to
complete its restructuring, completing its required filings with the Securities
and Exchange Commission and fulfilling its obligations pursuant to the Plan of
Reorganization.

NOTE 1.   GENERAL

         eNucleus is a wholesaler of Internet infrastructure. Our target market
is comprised of system integrators, web developers, software providers and
telecom resellers. Our core product offerings include co-location, high-speed
Internet access, data storage, and application delivery. Together, this offering
provides our clients with a scaleable and brandable platform for the development
of their ebusiness initiatives.


NOTE 2.  BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information, the instructions to Form 10-QSB and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. Certain amounts have been reclassified from the previously
reported financial statements in order to conform to the financial statement
presentation of the current period. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation have been included.

         As a result of the confirmation of the Company's Plan of Reorganization
on November 6, 2001, we adopted fresh-start reporting as required by Statement
of Position 90-7 "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code" ("SOP 90-7"). Under fresh-start reporting, the Company's assets
and liabilities were adjusted to fair values and a reorganization value for the
entity was determined by the Company based upon the estimated fair value of the
enterprise before considering values allocated to debt to be settled in the
reorganization. The portion of the reorganization value which could not be
attributed to specific tangible or identified intangible assets for the
Reorganized Company is referred to as reorganization value in excess of amounts
allocable to identifiable assets and is reported as "Goodwill" in the financial
statements. Fresh-start reporting resulted in the creation of a new reporting
entity for accounting purposes (the "Company" or the "Reorganized Company") with
no accumulated deficit as of November 1, 2001. As a result of adopting SFAS No.
142, the goodwill recognized in fresh-start reporting will not be amortized, but
will be reviewed annually for impairment. We have determined that the goodwill
is not impaired as of March 31, 2002, however future impairment of the recorded
goodwill may result if actual results of operations or changes in economic or
industry conditions differ significantly from assumptions used to derive the
reorganization value.

     Operating results for the three months ended March 31, 2002 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2002. These financial statements should be read in
conjunction with our audited consolidated financial statements and footnotes for
the year ended December 31, 2001 that are included in our annual report on Form
10-KSB.



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                                                                         Page 6

<PAGE>


NOTE 3.  FINANCIAL RESULTS AND LIQUIDITY

         On November 6, 2001, the Company's Plan of Reorganization was confirmed
thereby enabling the Company to successfully emerge from its Chapter 11
reorganization. Although the Plan resulted in a substantial reduction in debt
through conversion to equity, further improvements in our liquidity position
will be subject to the success of initiatives we are undertaking to increase
sales, reduce operating expenses and the effects on our liquidity of market
conditions in the industry. Our uses of capital are expected to include working
capital for operating expenses and satisfaction of current liabilities, capital
expenditures and payments on outstanding debt facilities.

         As shown in our results of operations, we incurred a net loss of
$300,000 during the three month period ending March 31, 2002. During such period
in 2002, net cash used in operating activities totaled $96,000 and was funded
from financing activities under the post petition financing arrangements.

         As part of our Plan of Reorganization, we entered into a borrowing
facility with Sunami Ventures, LLC ("Sunami") (a related party) for $1.5
million, of which $1.0 million of this facility is designated for the purpose of
financing equipment on behalf of customers. Sunami shall receive on account of
the borrowings, five shares of New Common Stock for every dollar loaned and a
Senior Secured Note for the amount of the borrowings. As of March 31, 2002,
eNucleus has received approximately $309,000 under this facility, the proceeds
of which have been used to satisfy certain petitions resulting from the
bankruptcy and post-petition operating requirements. Pursuant to the Sunami
financing agreement, in December, 2001, we entered into a three-year $545,000
secured demand loan agreement with Capital Equity Group. The note agreement is
secured by certain of our assets, guaranteed by John Paulsen, our CEO and bears
interest at the rate of 16%. As of March 31, 2002, eNucleus has received
approximately $224,000 under this facility.

         The Company's continued existence is dependent on its ability to
achieve future profitable operations and its ability to obtain financial
support. The satisfaction of the Company's cash requirements hereafter will
depend in large part on its ability to successfully generate revenues from
operations and raise capital to fund operations. There can, however, be no
assurance that sufficient cash will be generated from operations or that
unanticipated events requiring the expenditure of funds within its existing
operations will not occur. Management is aggressively pursuing additional
sources of funds, the form of which will vary depending upon prevailing market
and other conditions and may include high-yield financing vehicles, short or
long-term borrowings or the issuance of equity securities. There can be no
assurances that management's efforts in these regards will be successful. Under
any of these scenarios, management believes that the Company's common stock
would likely be subject to substantial dilution to existing shareholders. The
uncertainty related to these matters and the Company's bankruptcy status raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include adjustments that might result from the
outcome of this uncertainty.

         Management believes that, despite the financial hurdles and funding
uncertainties going forward, it has under development a business plan that, if
successfully funded and executed, can significantly improve operating results.
The support of the Company's vendors, customers, lenders, stockholders and
employees will continue to be key to the Company's future success.


NOTE 4.  FRESH-START REPORTING

         In accordance with the provisions of Statement of Position 90-7
"Financial Reporting by Entities in Reorganization under the Bankruptcy Code"
("SOP 90-7"), the Company adopted fresh-start reporting upon confirmation of the
Company's Plan of Reorganization. The Company adopted fresh-start reporting
because, as a result of implementation of the Plan, holders of the Company's
existing common stock immediately before filing and confirmation of the Plan
retained less than 50% of the common stock of the emerging entity and the
Company's reorganization value at emergence was less than its post-petition
liabilities and allowed claims. Under


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                                                                         Page 7


<PAGE>



fresh-start reporting, the Company's assets and liabilities were adjusted to
fair values and a reorganization value for the entity was determined by the
Company based upon the estimated fair value of the enterprise before considering
values allocated to debt to be settled in the reorganization. The portion of the
reorganization value which could not be attributed to specific tangible or
identified intangible assets for the Reorganized Company is referred to as
reorganization value in excess of amounts allocable to identifiable assets and
is reported as "Goodwill" in the financial statements. The adjustment of assets
and liabilities to fair values is included in net reorganization expense in the
financial statements.

         Fresh-start reporting resulted in the creation of a new reporting
entity (the "Company" or the "Reorganized Company") with no accumulated deficit
as of November 1, 2001. The goodwill recognized in fresh-start reporting will
not be amortized, but will be reviewed annually for impairment in accordance
with Statement of Financial Accounting Standards ("SFAS") No.142, "Goodwill and
Other Intangible Assets." The Company determined that the goodwill is not
impaired as of March 31, 2002, however future impairment of the recorded
goodwill may result if actual results of operations or changes in economic or
industry conditions differ significantly from assumptions used to derive the
reorganization value.

         For financial reporting purposes, the effective date of the adoption of
fresh-start reporting is considered to be October 31, 2001, although the
Company's confirmation date was November 6, 2001. The results of operations from
November 1 to November 6, 2001 were not significant. The financial statements
for the Company for the periods subsequent to October 31, 2001 are referred to
the "Reorganized Company" and are not comparable to those for the periods prior
to October 31, 2001 which are referred to as the "Predecessor Company."

         The reorganization value of the Company was based upon the
consideration of many factors and various valuation methods, including
discounted cash flow analysis using projected financial information, selected
publicly traded company market multiples and other applicable ratios and
valuation techniques that management believes to be representative of the
business and industry. Specifically, the Company considered the conversion price
of $16.6 million of creditor debt at $3.00 per share and utilized a net present
value cash flow analysis of the Company's three year financial projections using
a discount rate of 16%. Based upon their assumptions and other analysis
performed, the Company concluded that a Reorganization Value as determined was
an appropriate value. The valuation was based upon a number of estimates and
assumptions, which are inherently subject to significant uncertainties and
contingencies beyond the Company's control. Accordingly, there can be no
assurance that the values reflected in the valuation will be realized, and
actual results could vary materially. Moreover, the value of our New Common
Stock, as traded on the national exchange, may differ materially from the
reorganization valuation.



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                                                                         Page 8

<PAGE>


         The effect of the Plan and the implementation of Fresh-Start Reporting
on the Company's balance sheet as of October 31, 2001 was as follows:

<TABLE>
<CAPTION>

                                        PREDECESSOR    REORGANIZATION   FRESH-START        REORGANIZED
                                          COMPANY          PLAN         ADJUSTMENTS          COMPANY
                                         OCT. 31,       ADJUSTMENTS                       OCT. 31, 2001
                                            2001
<S>                                 <C>                <C>              <C>                <C>
ASSETS:

Cash                                          2,437                -               -              2,437
Accounts receivable                          32,715                -               -             32,715
Other current assets                         42,063                -               -             42,063
                                    -------------------------------------------------------------------
  Total current assets                       77,215                -               -             77,215
                                    -------------------------------------------------------------------

Property and equipment, net               1,169,308                -         743,853  (a)     1,913,161
Other Assets                                100,000                -               -            100,000
Goodwill                                          -                -      15,202,356  (b)    15,202,356
                                    -------------------------------------------------------------------
  Total assets                            1,346,523                       15,946,209         17,292,732
                                    ===================================================================

LIABILITIES & STOCKHOLDERS' EQUITY:

Notes payable                               608,630                -               -            608,630
Accounts payable                             95,842           82,773               -  (c)       178,615
Accrued expenses                            606,306                -               -            606,306
                                    -------------------------------------------------------------------
  Total current liabilities               1,310,778           82,773               -          1,393,551
                                    -------------------------------------------------------------------

Long term liabilities                             -        1,211,445               -  (d)     1,211,445
                                    -------------------------------------------------------------------
  Total liabilities                       1,310,778        1,294,218               -          2,604,996
                                    -------------------------------------------------------------------

                                    -------------------------------------------------------------------
Liabilities subject to compromise
                                         16,440,605      (16,440,605)              -  (e)             -
                                    -------------------------------------------------------------------

STOCKHOLDERS' EQUITY:
Common stock                                 13,620         (13,620)               -  (f)             -
Additional paid-in capital               22,586,950     (22,586,950)               -  (f)             -
Stock warrants                              727,349                -        (727,349) (f)             -
Treasury stock                             (651,838)               -         651,838  (f)             -
New common equity - issuable                      -       37,746,957     (23,059,221) (f)    14,687,736
Accumulated deficit                     (39,080,941)               -      39,080,941  (f)             -

                                    -------------------------------------------------------------------
Total stockholders' equity
(deficit)                               (16,404,860)      15,146,387      15,946,209         14,687,736
                                    -------------------------------------------------------------------
Total liabilities and
stockholders' equity                    $ 1,346,523    $           -    $ 15,946,209       $ 17,292,732
                                    ===================================================================
</TABLE>

     (a)  Reflects the adjustment of property and equipment to fair value
     (b)  Reflects the establishment of Goodwill representing the excess of the
          reorganization value over the aggregate fair value of the Company's
          tangible and identifiable assets
     (c)  Reflects the reclassification of convenience class and employee class
          payments to be paid under the Plan
     (d)  Reflects the reclassification of secured creditor debt, administrative
          and tax claims which have been converted into long term notes payable.
     (e)  Reflects the conversion of the Company's prepetition unsecured
          creditors into common stock, less those claims under the convenience
          class or employee class which are included in payables and secured
          claims, administrative and tax claims which have been converted into
          long term notes.
     (f)  Reflects the cancellation of the Predecessor Company's common stock,
          warrants to purchase common stock, treasury stock, and the accumulated
          deficit as of October 31, 2001 and the issuance of approximately 7.4
          million shares to the shareholders and claimants of the Predecessor
          Company.

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                                                                         Page 9


<PAGE>


NOTE 5.  FINANCING ARRANGEMENTS

As of March 31, 2002 the Company's debt outstanding included the following:

               Reorganized Company--
                   Senior Secured Notes Payable                        533,222
                   Bank Note Payable                                   496,698
                   Junior Secured Note Payable                         500,000
                   Tax Claim Notes Payable                             330,075
                   Duke-Weeks Note Payable                             141,951
                                                                    ----------
                                                                     2,001,946
               Less current maturities                                (568,018)
                                                                    ----------
                                                                     1,433,928
                                                                    ==========



         As part of our Plan of Reorganization, we entered into a borrowing
facility with Sunami Ventures, LLC ("Sunami") (a related party) for $1.5
million, of which $1.0 million of this facility is designated for the purpose of
financing equipment on behalf of customers. Sunami shall receive on account of
the borrowings, five shares of New Common Stock for every dollar loaned and a
Senior Secured Note for the amount of the borrowings. As of March 31, 2002,
eNucleus has received approximately $309,000 under this facility the proceeds of
which have been used to satisfy certain petitions resulting from the bankruptcy
and post-petition operating requirements. Pursuant to the Sunami financing
agreement, in December, 2001, we entered into a three-year $545,000 secured
demand loan agreement with Capital Equity Group. The note agreement is secured
by certain our assets, guaranteed by John Paulsen and bears interest at the rate
of 16%. As of March 31, 2002, eNucleus has received approximately $224,000 under
this facility.

         The Bank Note Payable of $500,000 plus accrued interest and attorney's
fees shall be restructured into a three year secured note in the amount of the
total allowed claim less $225,000 which is payable by the Company as soon as
reasonably practicable. To date, the Company has paid $50,000 toward the
$225,000 payment due and is in discussions with the bank on restructuring such
remaining amounts due. The note is secured by a first priority lien on all of
the Company's Litigation Claims and a second priority lien on all other assets
of the Company.

         Holders of allowed tax claims, including the Internal Revenue Service
and certain state revenue agencies, received in full satisfaction, settlement of
and in exchange for its tax claim, a six year 6.5% promissory note in an amount
equal to the principal amount of its tax claims, payments of principal and
interest due monthly. We issued notes totaling approximately $330,000 for
allowed tax claims.

         Duke Weeks, the Company's previous landlord for its Atlanta operations,
received a 3 year note payable in the amount of its total allowed claim. Monthly
payments of $1,000 are due with the first payment in each year due of $10,000.
The final payment will include the remaining outstanding principal plus accrued
interest.

         In accordance with the Plan of Reorganization, certain unsecured
claimants elected to invest an additional 10% on a portion of the unsecured
claim and received a Junior Secured Note on the portion of the unsecured claim.
Such note accrues interest at 12% per annum with principal and interest due in
twenty-four months from the date of issuance.

NOTE 6.  STOCKHOLDERS' EQUITY

         In accordance with the Plan, all outstanding shares of old common stock
and warrants/options to purchase old common stock were cancelled. As of March
31, 2002, the Company has not yet distributed shares of New Common Stock and
therefore have reported the entire value of common stock as "New Common
Equity-Issuable". The Company's common stock will now be traded under the symbol
ENCU. Under the



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                                                                        Page 10



<PAGE>


Plan, approximately 7.4 million shares of common stock will be issued in
exchange for unsecured creditor debt and existing common stock outstanding.
Additionally, there are approximately 14 million shares issuable pursuant to the
Plan of Reorganization.


NOTE 7.  RELATED-PARTY TRANSACTIONS

         At May 10, 2001, the date of the Company's bankruptcy filing, eNucleus
recorded amounts due to John C. Paulsen, the President and CEO, of $772,000,
including $502,000 for cash loans made to eNucleus and $270,000 for deferred
compensation and unreimbursed expenses. Pursuant to the Plan of Reorganization,
these amounts owed have been converted to equity.

         In August, 2000, eNucleus entered into a demand loan facility with
Sunami Ventures, LLC ("Sunami") (a Corporation managed and controlled by Mr.
Henry Paulsen). The facility provides for borrowings of up to $750,000, bears
interest at the rate of twelve percent and was payable no later than August,
2001. As of May 10, 2001, eNucleus had borrowed $731,000 from Sunami under this
facility. Pursuant to the Plan of Reorganization, these amounts owed have been
converted to equity.

         As part of our Plan of Reorganization, we entered into a borrowing
facility with Sunami Ventures, LLC ("Sunami") (a related party) for $1.5
million, of which $1.0 million of this facility is designated for the purpose of
financing equipment on behalf of customers. Sunami shall receive on account of
the borrowings, five shares of New Common Stock for every dollar loaned and a
Senior Secured Note for the amount of the borrowings. As of March 31, 2002,
eNucleus has received approximately $309,000 under this facility the proceeds of
which have been used to satisfy certain petitions resulting from the bankruptcy
and post-petition operating requirements. Pursuant to the Sunami financing
agreement, in December, 2001, we entered into a three-year $545,000 secured
demand loan agreement with Capital Equity Group. The note agreement is secured
by certain our assets, guaranteed by John Paulsen and bears interest at the rate
of 16%. As of March 31, 2002, eNucleus has received approximately $224,000 under
this facility.

         In October, 2001, eNucleus entered into a lease agreement with Sunami
  for approximately 5,000 sq ft. in Roswell, Georgia serving as our branch
  office and data center/operating facility in Atlanta, Georgia. The lease
  provides for monthly payments of approximately $20,000 and expires in 2008.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The following discussion should be read in conjunction with the
financial statements and related notes which are included under Item 1 and with
the Management's Discussion and Analysis Of Financial Condition and Results Of
Operations and the audited financial statements and related notes included in
eNucleus' Form 10-KSB, as filed with the Securities and Exchange Commission on
March 21, 2002.

         This Form 10-QSB contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of
the Securities Act of 1933 that involve numerous risks and uncertainties.
Forward-looking statements can be identified by the use of forward-looking
terminology such as "estimates," "projects," "anticipates," "expects,"
"intends," "believes," or comparable terminology or by discussions of strategy
that involve risks and uncertainties. In addition, any statements which refer to
expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. Actual results could differ from
such forward-looking statements. We undertake no obligation to revise
forward-looking statements. Readers are encouraged to review and consider
carefully the various disclosures made by us in this report and our other
reports filed with the Securities and Exchange Commission, including our Form
10-KSB for the year ended December 31, 2001. Such risks and uncertainties


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                                                                        Page 11




<PAGE>






include our ability to raise the funds necessary to finance our operations,
general effects of our restructuring and emergence from Chapter 11
reorganization, our ability to successfully execute on our business plan,
competitive factors and attracting new customers.

INTRODUCTION

         eNucleus is a wholesaler of Internet infrastructure. Our target market
is comprised of system integrators, web developers and software providers. Our
core product offerings include co-location - secured data center space,
high-speed Internet access, data storage, and email and virus scanning services.
Together, this offering provides our clients with a scaleable, brand able and
cost effective platform for the development of their ebusiness initiatives.

         We presently earn revenues from the following product and service
offerings: set up fees, leasing of data center space, Internet transport, data
storage, monitoring and email services. We recognize revenue for set up fees
over the contract terms. Clients are billed for the services over the course of
an engagement at a measured rate or on a recurring fixed-price basis. Fees
typically range from $250 to $20,000 for set-up and installation and recurring
revenue of $250 to $50,000 per month. Cost of revenues includes the costs of
services and material directly related to the revenues, including direct labor
and benefits, subcontracted labor or other outside services, and other direct
costs associated with revenues, as well as an allocation of certain indirect
costs. Operating expenses consist primarily of salaries, commissions, and
benefits for our marketing, sales and support personnel, advertising costs,
consultants' fees, provision for doubtful accounts and other miscellaneous
expenses. Depreciation and amortization expense consists primarily of the
amortization of intangible assets recorded in connection with our acquisition
and depreciation of our fixed assets. We expect these expenses to increase in
the future due to the growth of the company.


         On May 10, 2001, as a result of dramatic changes in the Internet
industry and financing markets, delays in reaching accord with our short term
note holders and other creditors in restructuring our debts and our inability to
cure defaults under our data center lease and the landlord's attempts to seize
Company assets, we filed a voluntary petition for reorganization under Chapter
11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division. We continued to operate as a
debtor-in-possession under the supervision of the Bankruptcy Court. On November
6, 2002, the Company's Plan of Reorganization was confirmed thereby enabling the
Company to successfully emerge from its Chapter 11 reorganization. Pursuant to
the confirmed Plan of Reorganization, among other things, holders of certain
allowed claims will receive 1 share of common stock for every $3.00 of debt.
Also pursuant to the Plan, the Company's common stock has undergone a 1 for 6
reverse stock split resulting in current stockholders receiving 1 share of new
common stock for every 6 shares of old common stock currently owned.

GROWTH STRATEGY

         We are pursuing a strategy to deliver our products and services on
a national scale. We expect to complement our internal growth by continuing to
evaluate acquisition opportunities whose services can complement our existing
services and enable us to offer a more comprehensive range of Internet-based
technology solutions to our clients.


RESULTS OF OPERATIONS

         Revenue. For the first quarter 2002, revenues were $33,000 compared to
$179,000 in the first quarter 2001. The decrease in revenue was a result of
customers electing to cancel out of contracts due to our bankruptcy filing. Our
operations immediately following our bankruptcy petition and throughout the date
of this filing, have been substantially limited to securing the financing needed
to enable the Company to complete its restructuring, completing its required
filings with the Securities and Exchange Commission and fulfilling its
obligations pursuant to the



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Plan of Reorganization. We have begun an aggressive strategy to increase our
revenues and operations.

         Cost of revenue. For the first quarter 2002, cost of revenue was
$18,000 in 2002 and $106,000 in 2001 or 55% compared to 59% of revenue. Cost of
revenues includes the costs associated with providing such services including
data center colocation space rental, communication charges, engineering salaries
and other related expenses.

         Operating expenses. For the first quarter 2002, operating expenses
decreased approximately $326,000 to $206,000 from $532,000 in the first
quarter 2001. Included in operating expenses for 2002 is approximately $38,000
related to professional fees and courts costs associated with the bankruptcy. As
part of our business restructuring late 2001 and early 2002, the Company has
substantially downsized and reduced personnel, salaries and other operating
expenses. During the first quarter 2001, the company had undertaken a
significant growth stage incurring substantial expenses to build our
infrastructure and administrative, including sales and marketing, back office
support and the cost of key executive management to support the development and
growth of the business.

         Depreciation and amortization expense. Depreciation and amortization
expense decrease $53,000 to $94,000 in the first quarter 2002 as compared to
$147,000 in the first quarter 2001. The decrease was primarily a result of the
reduction of amortization expense from goodwill resulting from our previous
acquisitions, which was written off as a result of our bankruptcy. The goodwill
as of March 31, 2002 was created as a result of our reorganization and under the
new accounting principals is not amortized, but rather evaluated periodically
for impairment.

         Interest and other expenses. Interest and other expenses decreased
$358,000 to $14,000 in the first quarter 2002. Interest and other expense in
2001 was primarily related to fees incurred resulting from prepetition financing
agreements that were stayed as a result of our bankruptcy filing.

         Net loss. Our net loss decreased $679,000 to $299,000 in the first
quarter 2002 compared to a loss of $978,000 in the first quarter 2001. As
discussed above, this decrease in loss is attributable to the Company's efforts
in downsizing and cost-containment as part of our restructuring late 2001 and
early 2002.

LIQUIDITY AND CAPITAL RESOURCES

         On November 6, 2001, the Company's Plan of Reorganization was confirmed
thereby enabling the Company to successfully emerge from its Chapter 11
reorganization. Although the Plan resulted in a substantial reduction in debt
through conversion to equity, further improvements in our liquidity position
will be subject to the success of initiatives we are undertaking to increase
sales, reduce operating expenses and the effects on our liquidity of market
conditions in the industry. Our uses of capital are expected to include working
capital for operating expenses and satisfaction of current liabilities, capital
expenditures and payments on outstanding debt facilities.

         As shown in our results of operations, we incurred a net loss of
$300,000 during the three month period ending March 31, 2002. During such period
in 2002, net cash used in operating activities totaled $96,000 and was funded
from financing activities under the post petition financing arrangements.

         As part of our Plan of Reorganization, we entered into a borrowing
facility with Sunami Ventures, LLC ("Sunami") (a related party) for $1.5
million, of which $1.0 million of this facility is designated for the purpose of
financing equipment on behalf of customers. Sunami shall receive on account of
the borrowings, five shares of New Common Stock for every dollar loaned and a
Senior Secured Note for the amount of the borrowings. As of March 31, 2002,
eNucleus has received approximately


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$309,000 under this facility the proceeds of which have been used to satisfy
certain petitions resulting from the bankruptcy and post-petition operating
requirements. Pursuant to the Sunami financing agreement, in December, 2001, we
entered into a three-year $545,000 secured demand loan agreement with Capital
Equity Group. The note agreement is secured by certain our assets, guaranteed by
John Paulsen and bears interest at the rate of 16%. As of March 31, 2002,
eNucleus has received approximately $224,000 under this facility.

         The Company's continued existence is dependent on its ability to
achieve future profitable operations and its ability to obtain financial
support. The satisfaction of the Company's cash requirements hereafter will
depend in large part on its ability to successfully generate revenues from
operations and raise capital to fund operations. There can, however, be no
assurance that sufficient cash will be generated from operations or that
unanticipated events requiring the expenditure of funds within its existing
operations will not occur. Management is aggressively pursuing additional
sources of funds, the form of which will vary depending upon prevailing market
and other conditions and may include high-yield financing vehicles, short or
long-term borrowings or the issuance of equity securities. There can be no
assurances that management's efforts in these regards will be successful. Under
any of these scenarios, management believes that the Company's common stock
would likely be subject to substantial dilution to existing shareholders. The
uncertainty related to these matters and the Company's bankruptcy status raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include adjustments that might result from the
outcome of this uncertainty.

         Management believes that, despite the financial hurdles and funding
uncertainties going forward, it has under development a business plan that, if
successfully funded and executed, can significantly improve operating results.
The support of the Company's vendors, customers, lenders, stockholders and
employees will continue to be key to the Company's future success.



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company is exposed to changes in interest rates as a result of
significant financing through its issuance of variable-rate and fixed-rate debt.
Reference is made to the quantitative disclosures about market risk as of
December 31, 2001 included under Item 7 of our most recent Annual Report on Form
10-KSB.

PART II

ITEM 1.  LEGAL PROCEEDINGS

         Prior to our filing for protection under bankruptcy, we were a party
to several creditor collection actions. However, as a result of our bankruptcy
filing, these matters and many other threatening proceedings have been resolved
and terminated. We believe that there is no proceeding threatened or pending
against us which, if determined adversely, would have a material adverse effect
on the financial condition or results of operations of eNucleus.

         As part of the bankruptcy filing, all executory contracts and unexpired
leases, which were not previously assumed or rejected by the Company or
otherwise not specifically assumed as part of the Plan of Reorganization, were
deemed rejected. Certain contract providers continued to provide services to the
Company, even though such contract was deemed terminated, and have requested
payments due for services rendered to the Company of approximately $250,000. The
Company has not recorded such liabilities in its financial statements and
expects to aggressively defend itself against such payments requested.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         On November 6, 2001 (the "Confirmation Date") the Company's Plan of
Reorganization was confirmed by the Bankruptcy Court. As part of the
distribution


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of the New Common Stock under the Plan of Reorganization, shareholders shall
tender their Old Common Stock to the Reorganized Company designated Stock
Transfer Agent no later than October 15, 2002, in accordance with written
instructions to be provided to such holders. Those shareholders who do not
submit their certificates for exchange prior to October 15, 2002 shall have its
claim or interest and its distribution pursuant to the Plan of Reorganization on
account of such Old Common Stock discharged and shall be forever barred from
asserting any such claim or interest against the Reorganized Company or their
respective property.

         As of March 31, 2002, the Company has not yet distributed shares of New
Common Stock and therefore have reported the entire value of common stock as
"New Common Equity-Issuable". The Company's common stock will now be traded
under the symbol ENCU. Under the Plan, approximately 7.4 million shares of
common stock will be issued in exchange for unsecured creditor debt and existing
common stock outstanding. Additionally, there are approximately 14 million
shares issuable pursuant to the Plan of Reorganization.






ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

       NONE

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

       NONE

ITEM 5.  OTHER INFORMATION

       NONE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       (A) Exhibits.

           NONE


       (B) Reports on Form 8-K.

           NONE







                                    SIGNATURE

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


                                                  eNUCLEUS, INC.

Date:    April 22, 2002                       /s/ JOHN C. PAULSEN
                                              --------------------------------
                                                  John C. Paulsen,
                                                  Chief Executive Officer
                                                  (principal executive
                                                  and financial officer)




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