`U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 FORM 10-KSB/A3

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                         Commission File Number 0-29329

                          BIFS TECHNOLOGIES CORPORATION

   FLORIDA                                                 65-0382549
------------------------------                        ----------------------
 (State or other jurisdiction of                           (IRS Employer
   incorporation or organization)                      Identification Number)

  2075 Fruitville Road, Suite 200, Sarasota, Florida                  34237
-----------------------------------------                          -----------
  (Address of principal executive offices)                          (Zip Code)

  Company's telephone number, including area code:              (941) 343-9300

Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock,
$.00001 Par Value

Check whether the Company (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 Company was required to file such
reports), and (2) has been subject to filing requirements for the past 90 days.
Yes [X] No [ ]

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained herein, and will not be contained, to the best of the Company's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
[ ]

The Company's revenues for fiscal year 2000 were $427,780.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the Company is $31,358,830 based on the closing price of $0.13
as of March 29, 2001.*

As of March 29, 2001, the Company had a total of 513,221,716 shares of common
stock outstanding.
--------------------

*Affiliates for the purpose of this item refer to the officers, directors,
and/or persons or firms owning 5% or more of the Company's common stock, both of
record and beneficially.

DOCUMENTS INCORPORATED BY REFERENCE

No documents have been incorporated by reference.

                                      -1-
                                                                            Page
                                                                          ------

PART I.........................................................................4

         ITEM 1.  DESCRIPTION OF BUSINESS......................................4

         ITEM 2.  DESCRIPTION OF PROPERTY.....................................15

         ITEM 3.  LEGAL PROCEEDINGS...........................................15

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                         HOLDERS..............................................15

PART II.......................................................................16

         ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED
                         SHAREHOLDER MATTERS..................................16

         ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
                         OF OPERATION  PLAN OF OPERATION......................17

         ITEM 7.   FINANCIAL STATEMENTS.......................................28

         ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                        ACCOUNTING AND FINANCIAL DISCLOSURE...................28

PART III......................................................................29

         ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                         CONTROL PERSONS:  COMPLIANCE WITH SECTION
                         16(a) OF THE EXCHANGE ACT............................29

         ITEM 10.  EXECUTIVE COMPENSATION.....................................31

         ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                          OWNERS AND MANAGEMENT...............................31

         ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
                          TRANSACTIONS........................................32

         ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K............................32


                                       -2-

                                  SPECIAL NOTE
                           FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS CONTAINED IN THIS REPORT, INCLUDING, WITHOUT LIMITATION,
STATEMENTS CONTAINING THE WORDS "BELIEVES," "ANTICIPATES," "EXPECTS" AND WORDS
OF SIMILAR IMPORT CONSTITUTE "FORWARD-LOOKING STATEMENTS." SUCH FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES.

THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED IN
THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THE
SUCCESS AND SUBSEQUENT ACCEPTANCE OF NEW TECHNOLOGIES; THE COMPANY'S ABILITY TO
CREATE, SUSTAIN, MANAGE OR FORECAST ITS GROWTH; ITS ABILITY TO ATTRACT AND
RETAIN KEY PERSONNEL; ITS ABILITY TO PROTECT TECHNOLOGY; CHANGES IN ITS BUSINESS
STRATEGY OR DEVELOPMENT PLANS; COMPETITION; DEMOGRAPHIC CHANGES; BUSINESS
DISRUPTIONS; ADVERSE PUBLICITY; AND INTERNATIONAL, NATIONAL AND LOCAL GENERAL
ECONOMIC AND MARKET CONDITIONS.

                                       -3-

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

THE COMPANY

BIFS Technologies Corporation (f/k/a BioFiltration Systems, Inc.), hereinafter
referred to as the "Company", was incorporated on December 17, 1992, as a "C"
corporation under the laws of the state of Florida. The Company is authorized to
issue 800,000,000 shares of its common stock, $.00001 par value per share. As of
March 16, 2001, the Company has 519,320,716 shares issued and 505,820,716
outstanding. The Company is currently traded on the National Daily Quotation
Bureau Pink Sheets and intends to become listed on the OTC Bulletin Board as
soon as all listing requirements are met.

For the period from inception (December 17, 1992) to March 2000, the Company has
been in a development stage. During this time, management has been engaged in
business planning activities and obtaining capital.

The Company currently operates two reporting segments. The first is the
Pollution Control Systems Group and the second is the Internet Technology Group.
The Company began with only the Pollution Control Systems Group in 1992.

The Company has recognized the need to expand its management capabilities. In an
effort to consolidate the executive level management functions and to establish
an organizational platform that provides for the achievement of its existing and
planned business objectives, the Company reorganized its Biofiltration and Beach
Access.Net subdivisions into a functional reporting structure. The new corporate
structure contains an Administrative Services Division, an Environmental Systems
Division, an Information Systems Division, and a Technology Development Division
and centralizes these functions under the corporate headquarters in Sarasota,
Florida.

As of December 31, 2000, the Company had an aggregate of 25 full time employees
in all divisions set forth herein.

The Company's Environmental products will be distributed through the Environment
Systems Division, while the SWOMI products will be distributed through the
Information Systems Division. The Technology Division will be responsible for
Research and Development and the Administrative Services Division will be
responsible for accounting, finance, etc.

Mr. Jim Feiler, Director, has been appointed as Managing Director of the
Environment Systems Division. The Company is focusing on filling the Managing
Director of Information Systems position next, with the other two key positions
to follow. In the interim, the Myrtle Beach operation reports to the CEO, Mr.
Keyser. Additionally, Dr. Campbell is acting as the Director of Technology
Division and Senior Systems Consultant.

                         Pollution Control Systems Group
                         -------------------------------

A.(i) The Company has acquired and marketed a patented pollution control
technology under Patent number 5,205,935. The patent was acquired from AAA
Environmental Services Corporation ("AAA") on May 15, 1995 for the sum of
$61,073. AAA is 100% owned by the majority shareholders of the Company. AAA had
an agency agreement with the Company dated December 20, 1992 to provide services
as national sales agent. The agreement was mutually terminated on December 20,
2000. A new national sales agreement was executed on January 2, 2001 with BSA
Enterprises, Inc. ("BSA") with the same terms and conditions as the AAA
agreement. BSA is wholly owned by family members of Mr. Keyser. The technology
provides a method and apparatus for the continuous degradation of hazardous and
organic wastes. The apparatus includes a high performance fixed film bioreactor
system which remediates and purifies contaminated waters.

The bio-remediation technology allowed the Company to enter into the business of
marketing modular biofiltration systems for the treatment of a variety of waste
waters, including aircraft deicing and anti-icing fluids, landfill leachates,
contaminated groundwater, industrial effluents, aluminum can plant solvent
wastes, food processing wastewater and other organic wastes. The biofilter or
biofiltration process provides a means of filtering and simultaneously
destroying waste components in a liquid or air stream by entrapped micro
organisms on the filter media. The micro organisms are responsible for the
destruction of waste chemicals and cleaning of the fluid.

                                      -4-

The Company intends to market its bioremediation products through BSA to
customers initially in the U.S. and Canada. It intends to contract with
specialized fiberglass and steel fabrication shops in the areas it makes sales
to manufacture bioreactor vessels to its strict specifications. This eliminates
the need for the Company to carry large amounts of inventory and it keeps the
shipping costs to a minimum. The electrical control panels are purchased locally
and installed by Company personnel. By utilizing the fabrication shops in the
area of the sale, the talents of the most experienced professional technical
consultants and commission compensated sales representatives, the Company keeps
its fixed costs to a minimum thereby allowing it the flexibility to tackle
projects it determines feasible.

The  Patent and Its Advantage
-----------------------------

Fixed Film Bioreactor

A method and apparatus for the continuous degradation of hazardous and organic
waste products. The apparatus includes a fixed film bioreactor system into which
is fed contaminated waters from industrial operations and which utilizes the
characteristic of either anaerobic or aerobic microorganisms growing on a fixed
film for the degradation of these solvents and purification of contaminated
waters. The bioreactor incorporates internal flow features, which result in
highly effective destruction of organic wastes in aqueous streams.

Background of the Patent

The patent covers the actual bioremediation of the organic compounds of the
product being processed. The parts of the process not patented are commonly used
and non-proprietary. More particularly, the Patent relates to an apparatus for
microbiological destruction of hazardous waste in contaminated waters.

Disposal of wastewaters contaminated with hazardous waste presents a costly
problem to many industrial facilities. On site disposal of hazardous compounds
is often desirable, however, presently accepted means of destruction are often
cost prohibitive for the generator. Biological degradation of these hazardous
substances presents a cost-effective alternative to incineration of
chemical/physical oxidation techniques.

The Patent is an apparatus capable of:

     o   Biological destruction of the hazardous substances.
     o   Simple, low cost operation for application on site for the
         biodegradation of these substances.
     o   High rates of destruction of the substance.
     o   Being modular and portable so that it may be simply relocated from
         site to site
     o   Utilizing either anaerobic or aerobic microorganism cultures for the
         rapid destruction of these substances.

Summary of Operations
---------------------

The bioreactor utilizes fixed film technology wherein naturally occurring
bacteria are grown on a plastic packing material in a large metal above ground
tank. The bacteria feed on organic material in the wastewater pumped into the
tank. The bacteria grow on the packing material and form a layer of bacteria
called a film. The BIFS' biofiltration system uses anaerobic and aerobic
bacteria to destroy organic material in wastewater.

Anaerobic bacteria are bacteria that do not use oxygen to grow. These types of
bacteria feed on organic material and digest the material into carbon dioxide
and methane gases. These gases are frequently referred to as "biogases". The
biogas is recycled to a boiler/heat exchanger used to heat the wastewater.
Warming the wastewater promotes the growth of bacteria making the biofilter more
efficient. Excess biogas can be recycled to a heating unit used to heat the
treatment building or to a generator to create electricity for use in the
treatment system. Anaerobic bacteria are very efficient at feeding on
wastewaters containing high concentrations of organic material and create very
little solid waste or sludge.

                                      -5-

Aerobic bacteria use oxygen to grow. This type of bacteria is efficient at
removing lower concentrations of organic material from wastewater but create a
lot of sludge.

The Company's biofiltration system pumps wastewater into a tank designed to grow
anaerobic bacteria. The bacteria in this tank feed on the high concentration of
organic material in the wastewater, significantly lowering the concentration of
organic material in the wastewater. The treated wastewater is then pumped to a
second tank designed to grow aerobic bacteria. The aerobic bacteria feed on the
lower concentration organic material in the wastewater, further lowering the
concentration of organic material in the wastewater. The wastewater is pumped
from this tank into the sewer system or a surface water body.

The combination anaerobic / aerobic treatment system is designed to treat
wastewater containing organic materials that are food for anaerobic or aerobic
bacteria.

Airport Deicing
---------------

Adherence to the Code of Federal Regulations (CFR) Title 14, Part 121 has
increased the quantities of deicing fluids used by U.S. airlines and airports.
U.S. glycol usage in 1990 was estimated at 11,500,000 gallons. Airport operators
have reported that the volume of aircraft deicing fluid has increased threefold
since 1992.

Before a commercial airliner starts the take-off roll in winter weather, deicing
solutions (glycols) are sprayed over the plane to prevent ice from forming and
destroying the plane's ability to fly. The amount of glycol used per mid-sized
plane requires as much treatment plant capacity as required to treat normal
sewage from a city of approximately 5,000 people. Deicing operations are active
every day, somewhere in the world. The environmental problem with glycols is
that they grab any available oxygen molecules in water, resulting in death for
plants and animals that depend on water for survival. Grasses, fish, shellfish,
and just about all other life forms are effected. Year after year, thousands of
tons of glycols soak into the ground and aquifers untreated due to airport
deicing operations. Glycol runoff could contain as much as 300,000 mg/I COD
(Chemical Oxygen Demand). Residential sewage only contains 250 mg/I COD. These
heavy COD loads can completely shut down a municipal owned treatment plant
without pre-treatment to a level of 250 mg/COD, or less. Many municipal plants
are refusing to accept glycols. Most do not have the capacity to handle it.

To address this problem, the Company has further developed and demonstrated the
ability to convert these glycol wastewater streams into liquid that can be
discharged without further treatment. Many airports are seriously considering
this optional solution, allowing them to bypass the municipal treatment plants
entirely. Because the Environmental Protection Agency has recently informed all
national airports that they cannot deice aircraft without collecting and
treating deicing fluids, these airports are faced with the near term
construction of systems to collect and treat deicing fluids. Because of this
regulatory driver, and the fact that management has built operating systems to
treat other glycols, this is the first market sector that the Company has
focused upon.

The acclaimed NASA/AMES Research Laboratories declared at a recent meeting of
the American Association of Airport Executives, anaerobic bio-remediation is the
most cost effective method of treating spent deicing fluids. Another study done
by ARCO Chemical Company also concluded the most cost-effective method of
deicing fluid disposal was anaerobic bio-remediation. The Company has been
awarded one contract to treat aircraft deicing and anti-icing fluids for
MidAmerica Airport, St. Louis. As of December 31, 2000, no sales or revenues
have been realized by the Company from this agreement.

Uncertainties
-------------

While the trend toward stricter enforcement of the Clean Water Act and other
environmental and governmental regulations appears to be firmly in place, a
change in policy or commitment could happen at any time. This change may occur
because of an election, changing administrations, change in agency directors or
a court ruling.

                                      -6-

Since inception, the Company has financed its operations primarily through cash
provided through various short- and long-term credit facilities and through the
sale of its common stock. The Company's management believes the need for
additional capital going forward will be met from revenues and earnings
generated from the sale of its products and services. If the Company is unable
to generate sufficient revenues from its products and services, management
believes the Company will need to raise additional funds to meet its cash
requirements.

B.(i) Principal Products
------------------

The Company offers its biofiltration system under its Patent number 5,205,935,
which was issued on April 27, 1993. The Patent covers part of the bioremediation
technology the Company intends to utilize in its operations. The Company
proposes to have modular biofiltration systems manufactured by outside sources
and to market these systems to various industries.

Patent Acquisition Details
--------------------------

The Patent was acquired from AAA Environmental, Inc. on May 15, 1995 for the sum
of $470,000. The Patent has a useful life of seventeen years from the April 27,
1993 Date of Patent. Payment was in the form of a Note Payable to AAA
Environmental for $470,000. AAA Environmental stock is 100% owned by the
majority shareholders of the Company.

The Company had previously recorded the cost of the Patent at $470,000. This
cost was reduced to $61,073, which reflects the related company's amortized
cost, and is being amortized over its useful life. The difference in recorded
value and its cost has been charged to additional paid-in capital. The Patent
value adjustment was made to comply with regulatory requirements.

The $470,000 note payable associated with the purchase of the Patent has been
reduced to the Patent's amortized cost. The difference between the original
recorded value and revised value has been credited to paid-in capital. Interest
expense previously recorded has been adjusted.

Background of the Biofiltration System
--------------------------------------

Biological degradation of hazardous substances presents a cost-effective
alternative to the landfill, incineration or chemical/physical oxidation
techniques.

The objective of the biofiltration system is to present an apparatus capable of
biological destruction of the hazardous substances.

Other objectives of the biofiltration system is to provide a simple
biofiltration system which has a low operational cost, to present a system
capable of high rates of destruction of the hazardous substances, which is
mechanically modular and portable so that it may be simply relocated from site
to site, and to present a system capable of utilizing either anaerobic or
aerobic microorganism cultures for the rapid destruction of hazardous
substances.

Bioremediation has been available for several years.

The biofiltration systems, which will be specifically tailored to each
customer's needs, may be utilized for treatment of a variety of waste waters
including, but not limited to:

     o    Aircraft deicing fluids
     o    Landfill leachates
     o    Contaminated groundwater
     o    Industrial effluents
     o    Aluminum can plant solvent wastes
     o    Food processing wastewater and other organic wastes.

                                      -7-

C.(i) Manufacturing
-------------

The Company does not intend to manufacture any of the products it sells.
However, the Company will recommend the best configuration of its products for
its customers. All manufacturing is subcontracted, but to the Company's rigid
specifications. This gives the Company the flexibility to keep manufacturing
costs under control.

Under the direct supervision of the Company's Pollution Control Systems Group
Technical Director, specialized erection companies will assemble the larger
bioreactors on-site. These erection companies are familiar with the installation
of above-ground storage tanks and will be contracted at the locale where the
biofiltration system is being installed. The Company currently has no contracts
with erection companies at this time. The Company's control panels will be
purchased from original equipment manufacturers and will be installed by Company
personnel. Packing media will be shipped directly to the site and installed
on-site.

Although the Company will not manufacture its own products, it will perform
supervision of assembly, redesigning, testing and servicing. Some of the
benefits of this strategy are:

     o   Decrease in working capital required to conduct business
     o   Ability to increase capacity quickly with reduced capital costs
     o   Increased overall flexibility

D.(i) The Market and Product Distribution
-----------------------------------

BSA is responsible to market all biofilters on behalf of the Company. It may
choose to employ additional agents, as necessary to explore and take advantage
of all market opportunities. These additional agents will be under their
control. BSA will operate on a set fee commission basis, which will allow the
Company to maintain a projected profit margin on each sale. BSA has been and is
representing the Company's products to the nation's airports. Other potential
markets include landfill operations, food processing facilities, commercial
laundries, and chicken, cattle and swine farms.

E.(i) Sales and Marketing Strategy
----------------------------

The Company's anaerobic biofiltration system will be marketed through BSA. The
term of the agreement is for a one-year period, automatically renewable for an
additional one-year period. Either party can terminate this agreement with a
one-year notice.

In accordance with the agreement and at its option, the Company may advance
funds against future commissions to BSA. The Company pays a flat commission rate
of 30% for sales and marketing of the biofiltration system product. As of the
date hereof, all prepaid sales commissions except for $18,000 have been repaid
and the financial statements now reflect no prepaid commissions.

The Company's sales and technical representatives will attend trade shows held
by environmental and agricultural associations to increase the overall awareness
of the product. The marketing department of BSA will follow up requests with
contacts made and developed through these sources.

Promotional materials such as brochures, CD-ROM, documentation videos and an
Internet web page are currently being designed and prepared and will be
available for distribution by all sales staff. As well, there is a telephone
marketing program being contemplated that will generate leads for the sales
staff. Although none of the Company's employees work for BSA, Tom Cannon, a
Director of the Company, provides marketing consultation to BSA. Victoria
Keyser, the wife of the Company's president, Alpha Keyser, is not a shareholder,
officer, employee or in any other way affiliated with BSA.

A professional exhibit will be designed and built for use at various conferences
and trade shows. This information exhibit will focus on the mechanics of the
biofiltration system, the problems the system resolves, and the benefits and
savings that result from the use of the system. Current industry articles,
published research papers and other information discussing the industry,
bioremediation solutions and the Company will be made available.

                                      -8-

                                Technology Group
                                ----------------

A.(ii) Business Development and Summary
--------------------------------

For many years, the Company had been searching for the best method of monitoring
remote production facilities. The Company was looking for a method that would
utilize current communications technology, would be scalable and would be
inexpensive. On April 1, 2000, the Company completed a major goal of expanding
its technology capability through the acquisition of Beach Access.Net, Inc.
("Beach Access"), an Internet Service Provider (ISP) and developer of a new
wireless Internet access capability. SWOMI is a wireless system which, when
connected to the biofiltration system control/monitoring equipment and the
Internet, can be used to remotely control and monitor the operation of the
biofiltration system. Beach Access subsequently acquired additional companies
and assets, expanding its ISP capacity, wireless systems technology, network and
computer installation and repair and software and database development
capability.

Beach Access is marketing this technology under the trade name of "SWOMI",
Seamless Wireless Omni-directional Mobile Internet. - - - - - SWOMI offers the
user true roaming capability within the SWOMI system with access speeds of
2Mbps, the same as a direct connection to a T-1. The SWOMI system incorporates
Beach Access ISP assets and allows customers to link their computers, at T-1
access speeds, for video, audio or data transmission on the Internet using a
patented roaming technology.

Beach Access installed a prototype system covering over six contiguous miles of
the Myrtle Beach, South Carolina area. Using the SWOMI equipment, a user will
be able to move within the SWOMI network area with no loss of service or
degradation of speed.

On December 1, 2000, the SWOMI high-speed wireless network went online and
operational in Myrtle Beach, South Carolina. The system became available to
customers at the Caravelle Hotel, the Caravelle Towers, the St. Johns Hotel, the
St. Clements Hotel, the Sea Island Resort and the Tropical Shores.

Alliance Computer Systems and Revcon Technologies Corp. Acquisitions
--------------------------------------------------------------------

On June 14, 2000, the Company announced that its wholly owned subsidiary, Beach
Access.Net, acquired all of the shares of Revcon Technologies Corp. The Revcon
acquisition brought Mr. Ken Bourg as a valuable addition to the Company's
technology group in light of his experience in wireless.

On July 19, the Company announced that its wholly owned subsidiary, Beach
Access.Net, acquired Alliance Computer Systems, a business to business network
provider. The Company believed that the acquisition was significant in that it
assisted the Company in attaining its strategic objectives for developing a test
market for business to business applications such as voice over IP, video over
IP, and point to multi-point business applications. The Alliance acquisition
created a test market because of the existence of its current customer base
located in Myrtle Beach for over 12 years and the Alliance technical staff. For
purposes of clarity and understanding, the following terms relative to the
Alliance acquisition have been defined:

- Voice over IP (Internet Protocol) means that simultaneously voice and data
have the availability to share a data circuit

- Video over IP (Internet Protocol) is a method or practice of compressing and
transmitting video information across either a public or private Internet
protocol network

- Point to Multi Point business application is the transmitting of data from a
single point to multiple point receiving locations.

                                      -9-

Both of the above acquisitions provide the Company with networking, programming
and wireless connectivity services and a team of technical staff to assist the
Company in meeting its stated business objectives which are as follows:

o continued market research
o completion and buildout of the infrastructure in the Myrtle Beach area
o product improvement in the areas of antennae, higher throughput, frequency and
 costing analysis
o expansion into new markets such as business parks
o improved management reporting systems
o staff training.

Uncertainties
-------------

In the rapidly changing environment of the high-tech sector, a new invention or
application may be developed which could make the Company's SWOMI technology
obsolete. In addition, the Company has no patent protection for the SWOMI
technology. Accordingly, the Company cannot guarantee that forecast revenues
will occur or that competition or factors outside its control will not create
adverse operating conditions for the Company.

B.(ii) Principal Products
------------------

The primary product offered by this group is Internet access. Beach Access is an
Internet Service Provider (ISP) and has acquired additional ISP assets in the
Myrtle Beach area. The group has developed an innovative and unique method of
Internet access called "SWOMI", Seamless Wireless Omni-directional Mobile
Internet. SWOMI offers the user true roaming capability within the
SWOMI system with access speeds of 2Mbps. The system incorporates Beach Access
ISP assets and allows customers to link their computers, for video, audio or
data transmission on the Internet using a patented roaming technology. The
primary differentiating factors between SWOMI and other wireless products is its
"Seek and Switch" capability. This proprietary seek and switch feature
facilitates a seamless roaming capability as customers move about the service
area. The system was designed to provide built-in signal management and
automatically switches from one cell to another as the system detects variances
in the signal strength or as the user moves in and out of coverage zones. This
unique feature allows customers to remain connected to the Internet or to leave
the network and automatically reconnect upon their return. The high-speed
throughput of SWOMI makes it possible for users to not only browse the Web, but
to execute more advanced applications including rapid file transfers and
Internet telephony. The engineering scheme of the SWOMI network makes it
possible for users on the system to achieve throughput levels at T1 speeds, as
the system balances the demands for multiple user connectivity and simultaneous
access. For purposes of clarity, the following terms have been defined:

o CONNECTIVITY is a provision for a signal to propagate from one point to
another, such as from one circuit, line, subassembly, or component to another

o THROUGHPUT is the number of bits, characters, or blocks passing through a data
communication system, or portion of that system. Throughput is expressed in data
units per period of time.

o T1 SPEEDS is the generic designator for any of several digitally multiplexed
telecommunications carrier systems. The designators for T-carrier in the North
American digital hierarchy correspond to the designators from the digital signal
(DS) level hierarchy. T-carrier systems were originally designed to transmit
digitized voice signals. Currently applications also include digital data
transmission. The North American hierarchy is based on multiplexing 24
voice-frequency channels and multiples thereof.

o INTERNET TELEPHONY is the use of the Internet to carry voice content.

                                      -10-

More simply stated, the SWOMI technology:

     o   Uses patented firmware to provide 2Mbps Internet access speeds.
     o   Uses hardware, which costs less than $250 per unit.
     o   Uses towers, which cost less than $30,000 to erect.
     o   Allows total user mobility within the network using laptop PC's or
         other portable devices.
     o   Has an automatic seek and switch feature (similar to cell phone
         technology) that maintains the connection while users
         move from one cell to another.
     o   Has automatic switching - does not require any user resetting of the
         equipment.

The provider of the patented firmware is OTC Telecom, a California based
company. The Company's relationship with OTC Telecom is one of a purchaser (the
Company) and supplier (OTC). As stated above, the Company has a "proprietary
right" because of its SWOMI system being trademarked utilizing the patented
firmware supplied by OTC.

Applications for the product are numerous, but a few are listed here: Hotels and
motels, convention centers, RV parks, housing developments, business districts,
high-rise office buildings, etc. Within the Myrtle Beach market area, the
Chamber of Commerce estimates that there are over 13 million visitors per year.
Generally, visits are for a one-week period, which would be 250,000 visitors per
week.

C.(ii) Manufacturing
-------------

The Technology Group likewise will use contracted services for the manufacture
of the SWOMI hardware and for construction of towers. A Director of R & D will
monitor product quality, working closely with the manufacturer. The Director of
Operations will manage and monitor system implementation and on-going
operations.

D.(ii) The Market and Product Distribution
-----------------------------------

For the Technology Group, the distribution is two fold. The first is to develop
markets within its own geographic area which refers to the area known as Horry
County, Myrtle Beach, South Carolina. These sites will be used to continue
product improvement and testing while offering SWOMI benefits to customers in
the local area. The second approach is to develop strategic alliances with
national companies that have the capability to distribute the product
nationally. As of the date hereof, there are currently no ongoing negotiations
to develop strategic alliances with national companies.

E.(ii) Sales and Marketing Strategy
----------------------------

The Company intends to expand its technology group into selected markets using
the prototype developed in Myrtle Beach. The Company intends to maintain
ownership of the infrastructure while marketing through sales agents in
strategic marketing locations which the Company believes have the greatest
potential to achieve its revenue objectives. The infrastructure is comprised of
equipment including towers, antennas, wireless units for the computers, and
cabling which will be owned by the Company and not sold to the hotel, motel or
apartment building.

F. Government Regulation
---------------------

In addition to the Resource Conservation and Recovery Act, the Clean Water Act
and The Environmental Protection Agency regulations, the Company now also comes
under the jurisdiction of the Federal Communications Commission (FCC). Since the
Technology Group uses radio frequencies to carry information among the users,
towers and the ISP, the Group must comply with FCC rules and regulations. A
major factor is that the FCC regulates which frequencies may be used and the
power transmitted on each frequency.

                                      -11-

ITEM 2. DESCRIPTION OF PROPERTY

The Company maintains its principal business operations at 2075 Fruitville Road,
Suite 200, Sarasota, Florida 34237. The Company's telephone number is (941)
343-9300. The Company does not own any property. The Company maintains three
offices, one is the corporate address listed above, and the other two are in
South Carolina for the Technology Group. The primary address for the Technology
Group (Beach Access.Net) is 9618 North Kings Highway, Myrtle Beach, South
Carolina 29572. The phone number is (843) 692-7434. All facilities are leased.

ITEM 3. LEGAL PROCEEDINGS

In December 2000, the former owner of the Myrtle Beach operation was terminated
by the Company. Subsequently, the former owner notified the Company in writing
of his intention to exercise the options on the remaining 12,000,000 shares of
restricted stock. If exercised on the termination date, the stock options would
be valued at $2,952,000. This amount is based on valuing the stock on the
termination date using its averaged simple traded value over a defined period,
less a 15% discount because of its restricted nature.

On December 20, 2000, the Company instituted legal action to void the employment
contract and issuance of the 12,000,000 option shares. This case was filed in
South Carolina State Court, the Court of Common Pleas, Fifteenth Judicial
Circuit. The proceeding began on December 20, 2000. The principal parties are
BIFS Technologies Corporation (BIFS) and Jasper Knabb (Knabb). BIFS alleged that
Knabb had misrepresented his ownership of BeachAccess thus causing BIFS to
attempt to purchase BeachAccess from Knabb and to enter into an employment
agreement with him. Knabb did not own BeachAccess nor did he have rights during
the sale of BeachAccess to the ownership rights. BIFS sought to rescind the
employment contract and recover the salary and stock options paid to Knabb. The
Lower Court found that BIFS was not required to continue Knabb's employment or
pay for future payments under the employment contract, however, the Court
refused to rescind the agreement as requested and allowed Knabb to keep the
stock options paid and those contemplated under the employment contract and
those negotiated in the sale of BeachAccess. This ruling was appealed to the
South Carolina Court of Appeals in Columbia, South Carolina. The appeal, filed
August 21, 2001, argues that since the Court found that Knabb's behavior was
excessive enough to warrant the forfeiture of his employment, it was excess
enough to warrant the loss of any stock or stock options paid and the agreement
should have been rescinded. The relief sought is to have the stock certificates
returned that were paid to Knabb.

The Company is involved in certain claims and other legal actions arising in the
ordinary course of business. There can be no assurances that these matters will
be resolved on terms acceptable to the Company. In opinion of management, based
upon the advice of counsel and consideration of all facts available at this
time, the ultimate disposition of these matters will not have a material adverse
effect on the financial position, results of operations or liquidity of the
Company.

                                      -12-

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

During the fourth quarter of the fiscal year covered by this report, no matters
were submitted to a vote of security holders through the solicitation of proxies
or otherwise.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The common stock is currently quoted on the National Daily Quotation Bureau Pink
Sheets operated by The NASDAQ Stock Market, Inc. under the symbol "BIFT." The
following table sets forth the high and low last sale prices for the common
stock for each fiscal quarter, or interim period, in which the common stock has
been publicly traded. These prices do not reflect retail mark-ups, markdowns or
commissions and may not represent actual transactions.

     Quarter Ended                        Low               High
     September 30, 1998                   $0.050            $0.050
     December 31, 1998                    $0.015            $0.050
     March 31, 1999                       $0.007            $0.040
     June 30, 1999                        $0.005            $0.025
     September 30, 1999                   $0.001            $0.006

     December 31, 1999                    $0.001            $0.005
     March 31, 2000                       $0.007            $0.200
     June 30, 2000                        $0.047            $0.469
     September 30, 2000                   $0.205            $2.000
     December 31, 2000                    $0.048            $0.070

The quarterly prices have been adjusted to reflect a split of the Company's
stock. In March 2000, effective April 15, 2000, the Company's Board of Directors
approved a 100:1 forward stock split. In conjunction with this stock split, the
par value of the Company's stock was changed from $0.001 to $0.00001. The effect
and timing of the split had no effect on the Special Services Agreement other
than to make the appropriate adjustment in the number of shares issued and the
price per share.

The Company's shares of common stock are not registered with the U.S. Securities
and Exchange Commission under the Securities Act of 1933, as amended
(hereinafter referred to as the "Act") and are restricted securities with the
exception of 87,500,000 shares issued pursuant to Rule 504, Regulation D.

Since its inception, the Company has not paid cash dividends on its common
stock. It is the present policy of the Company not to pay cash dividends and to
retain future earnings to support the Company's growth. Any payments of cash
dividends in the future will be dependent upon, among other things, the amount
of funds available therefor, the Company's earnings, financial condition,
capital requirements, and other factors which the Board of Directors deems
relevant.

As of December 31, 2000, there were approximately 232 shareholders of common
stock of record.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION PLAN OF
OPERATION The following discussion and analysis of the Company's financial
condition and results of its operations for the years ended December 31, 2000
and 1999 should be read in conjunction with the Company's financial statements
included elsewhere herein. When used in the following discussions, the words
"believes", "anticipates", "intends", "expects", and similar expressions are
intended to identify forward-looking statements. Such statements are subject to
certain risks and uncertainties, which could cause results to differ materially
from those projected. All projections in this section were based upon Beach
Access management's assumptions during the last quarter of 2000. The market
research for these assumptions was based on the internal research in the area
that has no prior history.

                                      -13-

Company Activities
------------------

BIFS Technologies Corporation (formerly known as Biofiltration Systems, Inc.)
(the Company) was incorporated in the state of Florida in December 1992. On
April 1, 2000, the Company acquired all of the outstanding stock of Beach
Access.Net, Inc.

The Company was originally formed as a manufacturer of modular biofiltration
systems for the treatment of polluted water. These patented systems will be sold
or leased to customers. Commencing in April 2000, in addition to the wastewater
treatment, the Company has acquired an Internet service provider. In addition to
providing dial-up Internet services, the Company is developing a high-speed
wireless Internet access system. Further, the Company intends to acquire and
develop unique companies that complement its core business activities.

The Company's main office is located in Sarasota, Florida. Internet service
activities are presently located in Myrtle Beach, South Carolina.

Liquidity and Capital Resources
--------------------------------

Cash
----

The year 2000 has been a year of expansion, R & D, and extensive
marketing for the Company. These operations have required significant sums
of cash as can be seen in the Statement of Cash Flows. However, the Company
has, through sales of stock and shareholder loans, been able to generate
the cash required to fund Company operations.

The current cash balance is $682,803. During the year, the Company received
$1,100,000 from sale of stock and $950,000 in loans from the majority
shareholder, Alpha Keyser. Terms of the shareholder note agreement call for
interest at 11%, payable monthly, with the principal balance to be repaid in
December 2002. Net cash used by operations was approximately $832,000.
Approximately $958,000 of cash was used for purchase of equipment and fixtures.

The Company, at December 31, 2000, had $2,861,604 in assets of which Internet
systems and equipment account for almost one-half. Liabilities consist of
certain accounts payable, accrued expenses and the current portion of related
party and shareholder notes payable and total $610,086. The Company continues to
maintain a current asset to current liability ratio of 1.64 to1.

As noted in Note I of the footnotes to the Company's Financial Statements, the
Internet technology segment has sustained substantial net operating losses.
Company management has planned operational and capital needs through December
31, 2001, and evaluated funding sources. Based on this plan, sufficient funding
is available to fund the Internet technology segment's operations and capital
needs through December 31, 2001. The Company believes that cash sources will be
adequate to fund operations and capital programs for the remainder of the year.

Since inception, the Company has financed its operations primarily through cash
provided through various short- and long-term credit facilities and through the
private sale of its common stock. The Company's management believes the need for
additional capital going forward will be derived from internal revenues and
earnings generated from the sale of its products and services. If the Company is
unable to generate sufficient revenues from its products and services,
management believes the Company will need to raise additional funds to meet its
cash requirements.

As of December 31, 2000, the Company's material commitments for capital
expenditures was related to the Beach Access infrastructure build-out in Myrtle
Beach, South Carolina. These expenditures were for the various hotels contracted
to provide high speed wireless Internet services to its guests. There was
sufficient capital at this time for these costs.

                                      -14-

Stock
-----

Stock Split - In March 2000, effective April 15, 2000, the Company's Board of
Directors approved a 100:1 stock split. In conjunction with this stock split,
the par value of the Company's stock was changed to $.00001. All shares
disclosed in the accompanying financial statements reflect the effect of the
100:1 stock split.

As of December 31, 2000, the Company had 800,000,000 shares authorized,
519,320,716 shares issued and 518,820,716 shares outstanding.

In December 1998, the Company canceled a stock purchase agreement with a
purchaser (see Note E in the footnotes to the Company's Financial Statements).
As a result, 9,250,000 shares of common stock were returned to the Company. The
treasury stock is recorded at the original cost per share of the stock
transaction.

During the year ended December 31, 1999, 2,500,000 shares of Treasury Stock were
issued for services. In 2000, treasury stock amounting to 6,250,000 shares, were
issued for asset purchase, employee and consultant compensation and professional
fees. The balance of Treasury Stock at December 31, 2000 is 500,000 shares.

During 2000, the Company entered into various compensatory stock option
agreements with certain employees and consultants.

The Company has adopted Statement of Financial Accounting Standard No. 123,
Accounting for Stock Based Compensation, to value the stock options granted to
employees and consultants. The value of each option granted has been determined
using the Black-Scholes stock option pricing model. The following assumptions
were made in estimating the fair value of the options: risk-free interest rate
of 5.33%; no dividend yield; expected lives from zero to five years; no expected
volatility. Costs charged to operations during 2000 were $625,553.

Additionally, the Company has granted an option to Hospitalitylinx, Inc. to
purchase an additional 4,850,000 shares at an exercise price of $.60 per share.
Management has determined the per share exercise price equals or exceeds fair
market value. These options expire in August 2002.

As described in Note F in the footnotes to the Company's Financial Statements,
the Company has granted a 12,000,000-share stock option to a former employee.
The exercise price of these options is $.001. Based on the Black-Scholes stock
option pricing model described above, the value of this option at the grant
date, if recorded, would be $876,000. Based on an employment, agreement these
shares are exercisable if the employee is terminated. In December 2000, the
employee was terminated. At December 31, 2000, the Company has instituted legal
action to void the employment agreement and issuance of the above option shares.
In connection with the trial in this case, the trial Judge ruled that the
employment contract language takes precedent over the law of the state of South
Carolina which requires a disloyal servant to forfeit benefits under an
employment contract. An appeal to the Courts ruling has been filed as of the
date of this filing. .

Inflation
---------

Inflation has not been a major factor in the Company's business since inception.
There can be no assurances that this will continue if or when the Company
completes an acquisition or merger.

The Pollution Control Systems Division
--------------------------------------

The Company has a biofiltration patent which it has purchased from AAA (see Note
D in the footnotes to the Company's Financial Statements) that originally
developed and recorded the patent. The patent is recorded at its purchase cost,
which represents the predecessor related company's development cost less
predecessor amortization. The patent is being amortized over its useful life,
currently estimated at 14 years.

For each of the years ended December 31, 2000 and 1999, patent amortization
amounted to $4,084.

For marketing its biofiltration products, the Company has a relationship with
BSA. Pursuant to a national sales agreement, the Company will pay sales
commissions to BSA. As sales and lease revenues are generated, commission
expense will be recognized at a rate of 30% in accordance with the terms of the
agreement on the accrual basis of accounting.

For the years ended December 31, 2000 and 1999, no commissions have been
incurred or paid under this agreement.

                                      -15-

In September 2000, the Division received a contract award for installation of
"Aircraft Deicer Fluid Disposal Services" at MidAmerica St. Louis Airport. This
contract is the first award for the Division and is a direct result of its
long-term marketing program.

In November 2000, the Company signed the contract for deicer disposal services
at Mid-America St. Louis Airport. Based on Company estimates, approximately
$87,000 will be required to acquire and install the necessary equipment. The
contract is for a five-year term with two five-year extensions at the Airport's
option. The Company has been and remains subject to the regulations imposed by
the Environmental Protection Agency.

The Division has received renewed interest in its deicing solution because of
this award. The Division continues to aggressively market its deicing and
pollution treatment technology to the airports. The budgetary and approval
process of municipal airports continues to be a significant factor affecting the
length of the sales cycle.

The cost of treatment is competitive with the Publicly Owned Treatment Works
(POTW), making the Division's solution viable for the user. The size of system
depends on the amount of wastewater volume and the COD/BOD concentrations to be
treated. The Division's system would be located on the airport grounds and would
involve pre-treatment of wastewater before discharge.

Recent Developments
-------------------

On January 26, 2001, the Company acquired 55% of the common stock of GPS
Integrators, Inc. (GPS), a Texas corporation. GPS provides the equipment and
software associated with a proprietary ice monitoring system used on airport
runways. GPS is an example of a synergistic acquisition to augment the contacts
and services offered by the Company. This is based upon the fact that the GPS
marketing plan for dealing with airports is complimentary to marketing the
biofiltration systems to the same target audience. Subsequent to the
acquisition, GPS was awarded a service contract at Scott AFB, which is
co-located with Mid America Airport. In addition to the ice monitoring product
line, GPS is developing a state-of-the-art airport information system. This
system expands on the technology developed for the existing product line by
incorporating facilities management, GPS tracking of aircraft, vehicles and
personnel on airport property, high-speed Internet connectivity among airport
operations stakeholders and high-speed Internet access for airport passengers.

Several key components of this system have been developed and are in testing at
this time. Presentations to various focus groups have been encouraging and
helpful in finalizing product features and benefits.

The Company believes that acquisitions such as GPS add not only expanded product
offerings, but also augment the Company's management capability. The Company
will continue to evaluate acquisition candidates for similar opportunities.

Terms of the purchase agreement between the Company and GPS provide for the
following:

   o  2,000,000 shares of the Company's restricted stock for purchase of 55% of
      GPS;

   o  Various performance stock options, up to a maximum of 8,000,000 shares,
      exercisable at $.001 per share, over varying periods through 2003.

   o  GPS commenced operations in early 2000.  In 2000, GPS was awarded a
      $2,872,047 sole source contract by the U.S. Air Force. Through December
      31, 2000, all revenues were from this contract.  At December 31, 2000, GPS
      is owed $458,273 by the U.S. Air Force.

                                      -16-

The Technology Group - Recent Developments
------------------------------------------

On January 1, 2001, the Company entered into a five-year executive employment
agreement with Mr. Frank Bridges. Mr. Bridges will oversee all technology issues
as the Chief Operating Officer of Emerging Technology. Mr. Bridges joined the
Company from Lucent Technologies, where he had extensive career in their
broadband and related technology areas.

Terms of the agreement provide for a base salary and annual stock options for up
to 1,000,000 shares of restricted common stock at 50% of the shares' fair market
value on January 1, 2001. The exercise of stock options is contingent upon
certain performance criteria being met. Under certain circumstances, if the
Company terminates the contract before its expiration date, the employee is
entitled to a maximum of 18 months of salary and stock options earned.

                                      -17-

SWOMI
-----

The Myrtle Beach operation is continuing the development of "SWOMI", Seamless
Wireless Omni-directional Mobile Internet - - - - - infrastructure in the Myrtle
Beach area. SWOMI offers the user true roaming capability within the SWOMI
system with access speeds of 2Mbps. Using the SWOMI equipment, a user will be
able to move within the SWOMI network area with no loss of service or
degradation of speed.

During the year, Beach Access installed over fourteen miles of backbone and had
service to over 1,000 rooms in seven hotels in the Myrtle Beach area. The
Internet Service Provider ("ISP") had approximately 1,100 customers. As part of
the capital committed to the operation, a DS-3 high-capacity Internet connection
was installed. A DS-3 high-capacity Internet connection allows digital voice and
data transmission and equates to 44.736 megabytes per second using 672 channels.
Beach Access also offers Web design and hosting as part of its product mix.

In connection with development and construction of the wireless Internet access
system, the Company has committed to purchase $1,182,375 in component parts used
in the system. Through December 31, 2000, the Company has received and recorded
$793,905 toward this purchase. As of this date, the Company will not expend any
additional capital for the build-out of the wireless system due to the fact that
the component parts for the wireless system have failed to meet specifications
and, accordingly, the purchase order has been cancelled.

Through February 2001, the Company has signed contracts to provide wireless
Internet access services to approximately 2,400 hospitality and condominium
units. Terms of these contracts require the Company provide the following:

   o     High-speed wireless internet access at the facility;
   o     Marketing materials;
   o     24-hour emergency response.

These contracts range from three to five years in length. Revenues are based on
daily user fees. Through December 31, 2000, costs incurred on installing
wireless Internet services at these facilities and acquiring equipment required
in this operation was approximately $1,066,135. For the twelve months ended
December 31, 2000, there have been no significant revenues earned by the Company
from wireless Internet activities.

RESULTS OF OPERATIONS

General
-------

The Company generated revenue of $427,780 during the year, which was primarily
from Myrtle Beach ISP operations. The Company has shown a current year loss of
($3,025,145), of which $1,407,338 resulted from compensation expense related to
exercise of options granted as part of employment and consulting agreements.

Segment Data
------------

The Company operates in two business segments, pollution treatment systems and
Internet technology. Currently, the only operating segment is the Internet
technology group. Separate management of each segment is required because each
business unit is subject to different marketing, delivery and technology
strategies.

At December 31, 2000, and for the year then ended, information on reportable
segments is as follows:

                                      -18-

                                    Pollution               Internet             Eliminating        Consolidated
                                    Treatment              Technology              Adjustments           Total

  External revenue                 $     -                 $    427,780          $     -             $    427,780
                                   =============           ============          ==============      ============
  Intersegment revenue             $     -                 $       -             $     -             $       -
                                   =============           ============          ==============      ============
  Interest expense, net            $      26,138           $     24,227          $     -             $     50,365
                                   =============           ============          ==============      ============
  Depreciation and
      amortization                 $      38,641           $     57,672          $     -             $     96,313
                                   =============           ============          ==============      ============
  Loss from continuing
      operations                   $  (  775,876)          $ (1,870,990)         $     -             $ (2,646,866)
  Loss from discontinued
      operations                         -                   (  378,279)               -               (  378,279)
                                   -------------           ------------          --------------      ------------
  Net loss                         $  (  775,876)           $(2,249,269)         $     -             $ (3,025,145)
                                   =============           ============          ==============      ============

  Significant non-cash items
    Employee and consultant
      compensation                 $     307,400            $ 1,099,938          $     -             $  1,407,338
    Loss on market
      investments                        -                      229,816                -                  229,816
    Loss on disposal of
      business segment                   -                      312,687                -                  312,687
                                   -------------           ------------          --------------      ------------

                                   $     307,400            $ 1,642,441          $     -             $  1,949,841
                                   =============           ============          ==============      ============
    Acquisition of long-
      lived assets                 $     236,250            $   393,635          $   (  236,250)     $    393,635
                                   =============           ============          ==============      ============

    Total assets                   $   3,844,277            $ 1,894,559          $   (2,877,232)     $  2,861,604
                                   =============           ============          ==============      ============

    Expenditures for long-
      lived assets                 $     260,027            $ 1,576,317          $   (  236,250)     $  1,600,094
                                   =============           ============          ==============      ============

For the year ended December 31, 1999, the Company was in development stage and
had not commenced operations.

The Chief Executive Officer does not use cash loaned or invested in the Internet
technology segment to evaluate its performance. However, such information is
furnished to the Chief Executive Officer. For the year ended December 31, 2000,
cash loaned or invested in the Internet technology segment amounted to
$1,542,595.

The pollution treatment segment will derive its revenues from sale or lease of a
proprietary biofiltration system used to treat polluted water. The Internet
technology segment derives its revenues principally from dial-up and wireless
Internet access services to residential and commercial customers.

Eliminating adjustments noted above consist of consolidating adjustments to
eliminate the parent company's (BIFS) investment in the wholly owned subsidiary.

Discontinued Operations
-----------------------

In August 2000, Company management discontinued and disposed of previously
acquired subsidiaries on the basis of not meeting the Company's requirements in
the Internet technology segment. The results of operations for the period
presented is reported as a component of discontinued operations in the
statements of operations.

Summarized results of the disposed segment for the year ended December 31, 2000
is as follows:

                  Net sales                                           $     ==
                                                                        338,712
                                                                        =======

                  Operating loss                                      $(230,217)
                                                                      =========

                  Net Loss from discontinued operations               $(378,279)
                                                                     ==========

For the period  December  31,  1999,  the  Company  did not operate in the above
segment.

-19

Professional Fees
-----------------

In March 2000, the Company issued 2,000,000 shares of restricted stock for
professional legal services to be rendered during the year ended December 31,
2000. The cost of these services was recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. For the year ended December 31, 2000, professional fees amounting to
$130,000 were recorded under this arrangement.

In July 2000, the company has retained Dr. Campbell as a Senior Consultant with
specific assignments in the areas of new product development, public relations
and technology assessment. Dr. Campbell has extensive experience in public and
investor relations strategies, general business strategy formulation and other
forms of executive consulting including computing science and
telecommunications.

Terms of the agreement provided for the following:

     o   Five year term through December 31, 2004;
     o   Stock option at $.001 per share on 3,000,000 shares of restricted stock
         upon signing of the agreement;
     o   Stock option at $.001 per share on an additional 1,000,000 shares of
         restricted stock effective January 1, 2001;
     o   Stock option at $.001 per share on an additional 1,000,000 shares of
         restricted stock effective January 1, 2002.

During the year ended December 31, 2000, Dr. Campbell exercised the option to
acquire 3,500,000 shares of restricted common stock. The stock issued under this
option, which was valued at $316,200, was recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. The exercise of this option has been recorded as prepaid professional
services and will be amortized over the life of the consulting agreement. For
the year ended December 31, 2000, amortization of prepaid professional fees
amounted to $105,400.

In November 2000, the Company entered into an agreement with Hospitalitylinx,
Inc., a South Carolina corporation for sales and telecommunication consulting.
The agreement is for a two- year term, extendable for additional one-year terms.
Among other things, the agreement provides for the following:

     o   At signing, 150,000 shares of unrestricted stock as a signing bonus;
     o   Stock options on 4,850,000 shares of the Company's restricted common
         stock at an exercise price of $.60 per share.  These options have
         vested at December 31, 2000, but must be exercised within two years.
         By August 2001, these shares must become free trading, which will
         require the Company to file a Registration Statement to register the
         shares.
     o   A cash payment based on a set fee per room or square footage for
         services sold on behalf of the Company.

For the year ended December 31, 2000, a signing bonus of $40,500, which
represents the stock's fair market value, was recorded in accordance with the
above agreement.

Business Acquisitions
---------------------

Effective April 1, 2000, the Company purchased all of the outstanding stock of
Beach Access.Net, Inc., an internet service provider located in South Carolina.
The purchase price was 1,750,000 unrestricted shares of the Company's common
stock. The cost of this acquisition, which amounted to $236,250, was recorded at
the stock's fair market value as of April 1, 2000. This business combination was
accounted for as a purchase.

In connection with this purchase, the Company recorded $224,820 of goodwill,
which is being amortized over five years. For the year ended December 31, 2000,
goodwill amortization of $33,723 was recorded.

In connection with the initial acquisition of Beach Access, the Company invested
8,600,000 shares of restricted common stock in Beach Access to acquire other
related business assets and operations. The cost of these investments amounted
to $607,040, which represents the stock's average simple traded value over a
defined period, less a 15% discount because of its restricted nature. One of
these acquisitions was never consummated and a portion of the invested shares
was recovered. A loss on market investments of $59,160 was recorded for the
unrecovered shares. In connection with these acquisitions, Beach Access recorded
goodwill of $323,756. As discussed in Note J, one of these operations was
subsequently discontinued. Goodwill associated with this acquisition, amounting
to $132,087, was written off to loss on discontinued operations during the year
ended December 31, 2000. For the year ended December 31, 2000, goodwill
amortization of $28,746 was recorded on the remaining business assets.

In connection with the Beach Access acquisition, the Company issued to the
former owner and certain employees of Beach Access, 8,000,000 shares of
unrestricted and restricted common stock as a signing bonus and additional
compensation.

Further, a five year employment agreement was signed with the former owner
providing for a base annual salary and options on 15,250,000 shares of
restricted common stock exercisable beginning immediately through January 1,
2003 at $.001 per share (contingent upon certain performance criteria being
met).

The stock issued as a signing bonus and additional employee compensation have
been recorded at the stock's fair market value as of April 1, 2000, for
unrestricted shares and at an average simple traded value over a defined period
for restricted shares less a 15% discount because of its restricted nature. In
the accompanying statement of operations for the year ended December 31, 2000,
employee compensation of $713,700 has been recorded to reflect the issuance of
these shares.

In April 2000, the former owner exercised the option under the above employment
agreement to purchase 3,250,000 shares of the Company's restricted common stock.
The stock issued under this option was recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. For the year ended December 31, 2000, employee compensation of $240,338
was recorded upon exercise of this option. The employment agreement with the
former owner provides that should the former owner be terminated by the Company
for any reason, any unexercised stock options can be exercised at any time
within one year.

In December 2000, the Company terminated the former employee. Subsequently, the
former owner notified the Company in writing of his intention to exercise the
options on the remaining 12,000,000 shares of restricted stock. If exercised on
the termination date, the stock options would be valued at $2,952,000. This
amount is based on valuing the stock on the termination date using its average
simple traded value over a defined period, less a 15% discount because of its
restricted nature.

At December 31, 2000, the Company has instituted legal action and is currently
under appeal to void the employment contract and issuance of the 12,000,000
option shares.

In May 2000, Beach Access acquired all of the common stock of Revcon
Technologies, Inc. and Alliance Computer Systems, LLC. These business
combinations were accounted for as a purchase. Both of these companies provide
networking, programming and wireless connectivity services. The purchase price
for both was 1,000,000 shares of restricted common stock, plus a $22,000 cash
payment. The cost of these acquisitions, which amounted to $97,650, included
stock recorded at an average simple traded value over a defined period less a
15% discount because of its restricted nature. In connection with these
purchases, Beach Access.Net, Inc. recorded assets in excess of the purchase
price of $33,892, which is being amortized over five years. For the year ended
December 31, 2000, goodwill amortization of $3,948 was recorded. Neither of
these operations had significant activity during the year ended December 31,
2000.

In connection with the Revcon Technologies, Inc. and Alliance Computer Systems,
LLC, acquisitions, the former owners signed five-year employment agreements with
Beach Access. These agreements provide for, among other things, a base annual
salary and options on 2,000,000 shares of restricted common stock exercisable at
$.001 depending on certain performance criteria being met.

In July 2000, the former owners exercised an option under the above employment
agreements to purchase 1,000,000 shares of the Company's restricted common
stock. Employee compensation was recorded at the stock's average simple traded
value over a defined period less a 15% discount because of its restricted
nature. For the year ended December 31, 2000, employee compensation of $105,400
was recorded upon exercise of this option.

In April 2000, Beach Access acquired the rights to provide Internet access
through May 2001 to approximately 1,300 customers. The cost for these rights was
3,200,000 shares of restricted common stock. Terms of the agreements provide for
monthly service revenues of $20,000.

On August 1, 2000, certain of the above agreements were modified whereby an
additional 180,000 shares of the Company's restricted common stock was issued
for the above customer rights.

In the accompanying financial statements, the purchase cost of these customers,
which amounted to $271,814, has been recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. The cost of the purchase, less the excess of the value of the restricted
stock over the services fee income arising from this transaction, which was
changed to expense, is being amortized on a straight-line basis over twelve
months through May 2001. For the year ended December 31, 2000, amortization of
the purchase price amounted to $146,669.

In late 2000, payment of the above monthly service fees was terminated. Through
February 28, 2001, management has attempted unsuccessfully to collect current
and past due amounts. Because of the unlikely possibility that past due amounts
will be collected and future benefits from this arrangement are uncertain,
management has made the following adjustments:

     Write-off of service fee accounts
        receivable at December 31, 2000             $  30,880
    Write-off of unamortized customer
        rights at December 31, 2000                 93,331
                                                    ---------
                                                    $ 124,211
                                                    =========

ITEM 7. FINANCIAL STATEMENTS

Financial Statements contained in this report reflect no change from the
preceding year in any accounting principles or practices or in the method of
application of those principles or practices.


                          BIFS TECHNOLOGIES CORPORATION
                      ------------------------------------
                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001




                          BIFS TECHNOLOGIES CORPORATION


                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001



                                    CONTENTS

                                                                           Page

INDEPENDENT AUDITORS' REPORT                                                   1

CONSOLIDATED FINANCIAL STATEMENTS

    CONSOLIDATED BALANCE SHEET                                             2 - 3

    CONSOLIDATED STATEMENTS OF OPERATIONS                                      4

    CONSOLIDATED STATEMENTS OF CHANGES
        IN STOCKHOLDERS' EQUITY (DEFICIT)                                  5 - 6

    CONSOLIDATED STATEMENTS OF CASH FLOWS                                  7 - 8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                9 - 32


To the Board of Directors
BIFS Technologies Corporation
Sarasota, Florida

                         Independent Auditors' Report

We have audited the accompanying consolidated balance sheet of BIFS Technologies
Corporation as of December 31, 2001, and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for the years ended
December 31, 2001 and 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 audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of BIFS Technologies
Corporation as of December 31, 2001, and the results of its operations, changes
in stockholders' equity (deficit) and cash flows for the years ended December
31, 2001 and 2000, in conformity with accounting principles generally accepted
in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going concern.

As shown in the accompanying financial statements, the Company incurred net
losses of $4,625,351 and $3,025,145 for 2001 and 2000. At December 31, 2001,
current liabilities exceed current assets by $656,951 and total liabilities
exceed total assets by $1,248,940. These factors and others discussed in Note I
raise doubt about the Company's ability to continue as a going concern. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.


CERTIFIED PUBLIC ACCOUNTANTS
Tampa, Florida
April 11, 2002

                          BIFS TECHNOLOGIES CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2001


                                     ASSETS



CURRENT ASSETS

    Cash and cash equivalents                                          $  63,558
    Accounts receivable                                                   11,130
    Other current assets                                                   4,868

                                                                          79,556

EQUIPMENT AND FIXTURES

    Wireless internet access equipment                                   339,359
    Furniture and fixtures                                               106,483

                                                                         445,842
    Less accumulated depreciation                                       (102,339)

                                                                         343,503

OTHER ASSETS

    Patent, net of accumulated
        amortization of $27,038                                           34,035
    Goodwill, net of accumulated
        amortization of $66,514                                          102,655
    Prepaid sales commissions
        to related company                                                18,000
    Advance to pre-acquisition company                                    52,000
    Other                                                                 24,791

                                                                         231,481

                                                                       $ 654,540


           The accompanying notes to consolidated financial statements
                     are an integral part of this statement.

                                       -2-


                          BIFS TECHNOLOGIES CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2001


                     LIABILITIES AND STOCKHOLDERS' (DEFICIT)


CURRENT LIABILITIES

    Accounts payable and accrued expenses                            $   672,832
    Due to related party                                                  29,000
    Current portion of related
        party notes payable                                               34,675

        TOTAL CURRENT LIABILITIES                                        736,507

LONG-TERM LIABILITIES

    Stockholder notes payable                                          1,106,900
    Related party notes payable,
        less current portion                                              61,073

                                                                       1,167,973

COMMITMENTS AND CONTINGENCIES                                                -

STOCKHOLDERS' (DEFICIT)

    Common stock, $.00001 par value,
        800,000,000 shares authorized,
        537,966,852 issued and 537,466,852
        shares outstanding                                                 5,380
    Additional paid-in capital                                         8,588,862
    Deferred stock options                                            (  283,669)
    Stock subscription receivable                                     (  274,216)
    Accumulated deficit                                               (9,276,297)

                                                                      (1,239,940)
    Less treasury stock, at cost                                      (   10,000)

                                                                      (1,249,940)

                                                                     $   654,540


           The accompanying notes to consolidated financial statements
                     are an integral part of this statement.

                                       -3-

                          BIFS TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                          2001                     2000

REVENUES                                                             $   510,769             $   427,780

COST OF REVENUES                                                         806,736                 349,887

                                                                      (  295,967)                 77,893

OPERATING EXPENSES

    Salaries and benefits                                                541,941               1,264,866
    Professional fees                                                    601,999                 292,223
    General and administrative                                           624,315                 627,359
    Research and development                                             150,000                  17,775
    Depreciation and amortization                                        316,879                  96,313
    Marketing expenses                                                   197,337                 145,944
    Loss on impairment of long-lived assets                            1,698,469                    -

                                                                       4,130,940               2,444,480

NET OPERATING LOSS                                                    (4,426,907)             (2,366,587)

OTHER INCOME (EXPENSE)

    Interest income                                                        3,618                   7,724
    Interest expense                                                  (  192,421)             (   58,089)
    Loss on disposal of assets                                        (    9,641)                   -
    Loss on investments                                                     -                 (  229,914)

                                                                      (  198,444)             (  280,279)

NET LOSS FROM CONTINUING OPERATIONS                                   (4,625,351)             (2,646,866)

DISCONTINUED OPERATIONS

    Loss from discontinued operations                                       -                 (  230,217)
    Loss on disposal of discontinued
        operations                                                          -                 (  148,062)

                                                                            -                 (  378,279)

NET LOSS                                                             $(4,625,351)            $(3,025,145)

NET LOSS PER COMMON
    SHARE                                                            $(    .0088)            $(    .0061)

WEIGHTED AVERAGE COMMON
    SHARES OUTSTANDING (shares
    in 100's)                                                          5,269,872               4,938,179

LOSS FROM CONTINUING OPERATIONS                                      $(    .0088)            $(    .0053)

LOSS FROM DISCONTINUED OPERATIONS                                    $      -                $(    .0005)

LOSS FROM DISPOSAL OF DISCONTINUED
    OPERATIONS                                                       $      -                $(    .0003)




           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.

                                       -4-


                          BIFS TECHNOLOGIES CORPORATION
                     (Formerly Biofiltration Systems, Inc.)
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                              (shares in hundreds)



                                                                                   Additional      Stock       Deferred
                            Common stock      Common stock      Treasury stock     paid-in     subscription    stock      Accumulated
                               Shares    Par value subscribed  Shares     Cost     capital      receivable     options      deficit

BALANCE, DECEMBER 31, 1998    3,959,100  $3,959    $  -    $ 92,500   $(185,000)  $ 812,091      $ -         $ -      $ (576,839)

  Stock subscription for
    875,000 shares (varying
    price per share)               -        -    1,000,000     -          -            -       (1,000,000)     -         -

  Stock issued for services

    ($.035 per share)              -        -         -     (25,000)     50,000      37,500         -          -         -


  Contribution of interest
    to additional paid-in
    capital                        -        -         -         -          -         44,777         -          -         -

  Collection of stock
    subscription receivable
    and issue of stock
    for services                250,000     250   ( 62,500)     -          -        874,750        62,500      -         -


   Adjustment to stock
     subscription price
     per share                     -        -     (625,000)     -          -           -          625,000      -         -

   Net loss                        -        -         -         -          -           -            -          -      (1,048,962)


 BALANCE, DECEMBER 31, 1999   4,209,100   4,209    312,500   67,500     (135,000) 1,769,118    (  312,500)     -      (1,625,801)


                                       -5-

                          BIFS TECHNOLOGIES CORPORATION
                     (Formerly Biofiltration Systems, Inc.)
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                              (shares in hundreds)

                                                                                    Additional    Stock        Deferred
                                Common stock       Common stock    Treasury stock    paid-in    subscription   stock     Accumulated
                             Shares   Par value   subscribed     Shares     Cost     capital     receivable    options      deficit

  Stock used to acquire
    subsidiary                   17,500  $   17    $ -           -     $ -         $236,233        $ -    $     -       $    -

  Stock used to acquire
    business assets              86,000      86      -           -           -      615,104          -          -            -

  Stock used to acquire
    customer rights              33,800      34      -           -           -      271,780          -          -            -

   Stock issued for
    compensation                 80,000      80      -           -           -      713,620          -          -            -

  Stock issued for services      20,000      20      -           -           -      129,980          -          -            -

  Stock issued for cash         674,307     674   (312,500)      -           -    1,099,326       312,500       -            -

  Cash contributed                 -         -      -            -           -       22,500          -          -            -

  Contribution of interest
    to additional paid-in
    capital                        -         -      -            -           -       40,272          -          -            -

  Stock options granted for
    services and
    compensation                   -         -      -            -           -      909,220          -      (909,220)         -

  Stock options exercised
    for services                 30,000      30     -            -           -        2,269          -       313,901           -

  Stock options exercised
    as compensation              42,500      43     -            -           -       34,045          -       311,650           -

  Treasury stock issued for
    services                       -         -      -        62,500      125,000    (12,500)         -          -              -

   Net loss                        -         -      -            -           -          -            -          -        (3,025,145)

 BALANCE, DECEMBER 31, 2000   5,193,207  $5,193     -         5,000    $ (10,000)$5,830,967        $ -    $ (283,669)   $(4,650,946)


                                      -6-

                          BIFS TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                          2001                  2000

CASH FLOWS FROM OPERATING ACTIVITIES

   Cash received from customers                                      $   531,808             $   467,577
   Cash paid for continuing operating
      expenses                                                        (2,626,076)             (1,222,181)
   Cash paid for discontinued operations                                -                     (   65,592)
   Cash received for interest                                              3,618                   6,909
   Cash paid for interest                                             (    2,948)             (   18,548)

      Net cash used by operating
         activities                                                   (2,093,598)             (  831,835)

CASH FLOWS FROM INVESTING ACTIVITIES

   Advances to related company                                             -                  (  128,000)
   Repayment of advances to related
      company                                                              -                     575,910
   Advance to pre-acquisition company                                 (   52,000)                   -
   Purchase of business and other assets                                     -                (    8,354)
   Purchase of equipment and fixtures                                 (  288,563)             (  958,385)
   Other                                                                 120,757                    -

      Net cash used by investing
         activities                                                   (  219,806)             (  518,829)

CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from sale of common
      stock                                                              868,159               1,100,000
   Proceeds from stockholder
      notes payable                                                      797,000                 950,000
   Proceeds from related party
      advances                                                            35,000                    -
   Repayment of related party advances                                (    6,000)             (   16,539)

      Net cash provided by
         financing activities                                          1,694,159               2,033,461

NET (DECREASE) INCREASE IN CASH                                       (  619,245)                682,797

CASH AND CASH EQUIVALENTS,
   BEGINNING OF YEAR                                                     682,803                       6

CASH AND CASH EQUIVALENTS,
   END OF YEAR                                                       $    63,558             $   682,803




           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.

                                       -7-

                          BIFS TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                         2001                    2000

                          RECONCILIATION OF NET LOSS TO
                      CASH FLOWS FROM OPERATING ACTIVITIES

NET LOSS                                                             $(4,625,351)            $(3,025,145)

RECONCILING ADJUSTMENTS

   Impairment loss on long-lived and
      and intangible assets                                            1,698,469                  -
   Loss on disposal of fixed assets                                        9,641                  -
   Loss on investments                                                      -                    229,914
   Loss from discontinued operations                                        -                    164,625
   Loss on disposal of discontinued operations                              -                    148,062
   Decrease in accounts receivable                                        21,039                  39,797
   Increase in prepaid professional fees                              (   63,416)             (  210,800)
   Decrease in other assets                                               28,497              (   21,764)
   Depreciation and amortization                                         316,879                  96,313
   Increase in accounts payable
      and accrued expenses                                                97,421                 136,294
   Stock issued for services                                             233,750               1,618,300
   Contribution of accrued interest
      to paid-in capital                                                 189,473                  40,272
   Other                                                                    -                 (   47,703)

CASH FLOWS FROM OPERATING
   ACTIVITIES                                                        $(2,093,598)            $(  831,835)


                   NONCASH INVESTING AND FINANCING ACTIVITIES

DECREASE IN ACCRUED INTEREST
   PAYABLE THROUGH CONTRIBUTION
   TO PAID-IN CAPITAL                                                $   189,473             $    40,272

ACQUISITION OF BUSINESS ASSETS WITH
   COMMON STOCK AND ADDITIONAL PAID
   IN CAPITAL                                                        $   477,700             $ 1,144,042

STOCK ISSUED FOR SERVICES                                            $   233,750             $ 1,407,338

DECREASE IN STOCKHOLDER AND OTHER
   RELATED PARTY NOTES PAYABLE THROUGH
   CONTRIBUTION TO PAID-IN CAPITAL                                   $   989,000             $      -


          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.

                                      -8-

                         BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company activities

BIFS Technologies Corporation (formerly known as Biofiltration Systems, Inc.)
(the Company) was incorporated in the state of Florida in December 1992.

The Company was originally formed as a manufacturer of modular biofiltration
systems for the treatment of polluted water. These patented systems will be sold
or leased to customers. Commencing in April 2000, in addition to the wastewater
treatment, the Company has acquired an internet service provider and in January
2001, a controlling interest in a company that sells airport ice monitoring
systems and equipment. Further the Company intends to acquire and develop unique
companies that complement its core business activities.

The Company's main office is located in Sarasota, Florida. Internet service
activities are located in Myrtle Beach, South Carolina.

Basis of presentation

The accompanying financial statements include the Company and its wholly owned
subsidiary Beach Access.Net, Inc. and majority owned GPS Integrators, Inc. All
intercompany accounts and transactions have been eliminated in consolidation.

Revenue recognition

The Company's revenues are derived from the following sources:

-  access charges to the internet, using various payment plans, through either
   dial-up or wireless means;

-  sale or lease of pollution treatment equipment;

-  sale of ice monitoring software and equipment.

Internet customers are charged a daily or monthly fixed fee for access to the
internet. Revenues are recognized at standardized rates over the period the
service is provided.

                                       -9-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenues from sale of pollution treatment equipment is recognized in accordance
with contract or purchase order terms at the time the equipment is either
shipped or shipped and installed and accepted by the customer.

Revenues from lease of pollution treatment equipment will be based on contract
terms - typically as equipment is installed and treatment services commence.
Revenues are also recognized on either a flat monthly rate or at a measured
price per gallon basis, as services are provided.

Revenues from the sale of ice monitoring software and hardware are recognized at
the time the products are shipped and accepted by the customer.

Equipment and fixtures

Equipment and fixtures are recorded at cost. Maintenance, repairs and minor
renewals are expensed as incurred. When equipment and fixtures are retired or
otherwise disposed of, the related cost and accumulated depreciation are removed
from the respective accounts and any profit or loss on disposal is credited or
charged to earnings.

Equipment and fixtures are depreciated over their estimated useful lives using
the straight-line method. For income tax purposes, accelerated depreciation
methods are used.

For the years ended December 31, 2001 and 2000, depreciation expense amounted to
$141,974 and $33,708, respectively.

Patent

The patent was purchased from a related company (see Note D) that originally
developed and recorded the patent. The patent is recorded at its purchase cost
which represents the predecessor related company's development cost less
predecessor amortization. The patent is being amortized over its useful life,
currently estimated at 14 years.

For each of the years ended December 31, 2001 and 2000, patent amortization
amounted to $4,084.

                                      -10-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Goodwill

Goodwill represents the excess of the cost of business assets acquired over the
fair value of the net assets at dates of acquisition. Amortization is being
recorded on a straight-line basis over five years.

Commencing in 2002, in accordance with Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, the Company will no
longer amortize goodwill. Rather, goodwill will be tested for impairment. An
impairment loss will be recognized if the carrying value of goodwill exceeds its
fair value.

Impairment of long-lived assets

Long-lived assets, including goodwill and other intangibles, are periodically
reviewed for impairment when events or changes in circumstances indicate the
carrying amount of an asset may not be recoverable.

The amount of an impairment loss is measured as the excess of the carrying
amount of the asset over the fair value of the asset.

See Note H for impairment adjustments related to long-lived assets.

Use of estimates

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

Advertising costs

Advertising  costs are  expensed as incurred.  For the years ended  December 31,
2001 and 2000, advertising costs amounted to $64,759 and $43,855, respectively.

                                     -11-


                          BIFS TECHNOLOGIES CORPORATION
                     (Formerly BIOFILTRATION SYSTEMS, INC.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Deferred income taxes

Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the period the
change is enacted.

Loss per common share

Loss per common share is computed using the weighted average of shares
outstanding during the periods presented in accordance with Statement of
Financial Accounting Standards No. 128 Earnings Per Share.

Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents
includes time deposits with original maturities of three months or less.

NOTE B - NATIONAL SALES AGREEMENT

The Company's majority stockholders own another company that provides services
as a national sales agent.

                                      -12-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE B - NATIONAL SALES AGREEMENT (continued)

In 1992, the Company entered into an agreement whereby the related company
provides exclusive national sales services. The term of the agreement is for a
one year period, automatically renewable for an additional one year period. This
agreement can be terminated with a one year notice by either party.

In January 2001, a replacement national sales agreement was entered into with
another related company owned and controlled by family members of the Company's
majority stockholders. Terms of the new agreement are substantially the same as
the 1992 agreement.

Terms of the national sales agreement provide for the related company to be paid
30% of the Company's retail sales and/or collected lease revenue, as defined.
Further, in accordance with the agreement and at its option, the Company may
advance funds against future commissions to the related company. In September
2000, sales commission advances amounting to $575,910 were repaid by the related
party.

For the year ended December 31, 2001, a $18,029 commission was incurred under
this agreement. Based on written representation, the owner of the related
company has agreed to waive any amounts due at December 31, 2001. For the year
ended December 31, 2000, no commissions were incurred under this agreement.

NOTE C - STOCKHOLDER NOTES PAYABLE

At December 31, 2001, stockholder notes payable consist of the following:

        Stockholder notes payable,
           non-interest bearing, no
           specified repayment terms
          (see below)
                                             $   348,900

        Unsecured notes payable to
           majority stockholder,
           interest at 11.0%, payable
           monthly, principal due
           December 2003
                                                 758,000

                                             $ 1,106,900

                                      -13-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE C - STOCKHOLDER NOTES PAYABLE (continued)

Interest on the above non-interest bearing stockholder notes payable has been
imputed at an amount equal to the average annual prime rate plus 1.0%. For the
years ended December 31, 2001 and 2000, interest expense on these notes amounted
to $28,312 and $35,692, respectively. In the accompanying financial statements,
an amount equal to this interest has been recorded as additional paid-in
capital.

The stockholder notes payable have no specified repayment terms. However, based
on written representation of the Company's Chief Executive Officer and majority
stockholder, these notes payable will be repaid prior to payment of sales
commissions due sales agent (see Note B). Repayments will be limited to no more
than 50% of all earned sales commissions due sales agent.

In additional to the unsecured notes payable noted above the majority
stockholder loaned the Company an additional $989,000 during 2001 and 2000. At
December 31, 2001, the majority stockholder agreed to contribute these notes and
associated accrued interest to additional paid-in capital. For the years ended
December 31, 2001 and 2000, interest expense on these notes amounted to $87,591
and $18,999, respectively.

NOTE D - RELATED PARTY NOTES PAYABLE

The Company's majority stockholders own another company that developed and sold
a patent to the Company for $61,073 (see Note A). The Company issued a $61,073
note payable to this related company in conjunction with the purchase. Terms of
the note provide for interest at 7.5% per annum. Principal and unpaid interest
payments on this note shall be paid from no more than 50% of any Company net
profits, as defined.

At December 31, 2001, the Company's majority stockholder has agreed to assume
the liability for the interest accrued on the above note through December 31,
2001. This assumption of the liability has been recorded as a contribution to
additional paid-in capital in the accompanying financial statements.

Additionally, the related corporation described above has advanced funds to the
Company under an unsecured, revolving promissory note. Terms of this note
provide for interest at 8.5%, payable quarterly, with principal due on December
31, 2002. At December 31, 2001, the amount outstanding on this note payable is
$34,675.

                                      -14-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE E - BUSINESS ACQUISITIONS

Effective April 1, 2000, the Company purchased all of the outstanding stock of
Beach Access.Net, Inc., (Beach) an internet service provider located in South
Carolina. The purchase price was 1,750,000 unrestricted shares of the Company's
common stock. The cost of this acquisition, which amounted to $236,250, was
recorded at the stock's fair market value as of April 1, 2000. This business
combination was accounted for as a purchase.

In connection with this purchase, the Company recorded $224,820 of goodwill
which is being amortized over five years. For the year ended December 31, 2001
and 2000, goodwill amortization of $44,964 and $33,723, respectively, was
recorded.

The accompanying financial statements reflect operating activities of Beach from
date of acquisition, April 1, 2000, to December 31, 2001.

In connection with the initial acquisition of Beach, the Company invested
8,600,000 shares of restricted common stock in Beach to acquire other related
business assets and operations. The cost of these investments amounted to
$607,040, which represents the stock's average simple traded value over a
defined period, less a 15% discount because of its restricted nature. One of
these acquisitions was never consummated and a portion of the invested shares
was recovered. A loss on investments of $59,160 was recorded for the unrecovered
shares. In connection with these acquisitions, goodwill of $323,756 was recorded
by Beach. As discussed in Note J, one of these operations was subsequently
discontinued. Goodwill associated with this acquisition, amounting to $132,087,
was written off to loss on discontinued operations during the year ended
December 31, 2000. For the years ended December 31, 2001 and 2000, goodwill
amortization of $38,334 and $28,746, respectively, was recorded on the remaining
business assets.

See Note H for impairment adjustments related to Beach.

In connection with the Beach acquisition, the Company issued to the former owner
and certain employees of Beach, 8,000,000 shares of unrestricted and restricted
common stock as a signing bonus and additional compensation.

Further, a five year employment agreement was signed with the former owner
providing for a base annual salary and options on 15,250,000 shares of
restricted common stock exercisable beginning immediately through January 1,
2003 at $.001 per share (contingent upon certain performance criteria being
met).

                                      -15-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE E - BUSINESS ACQUISITIONS (continued)

The stock issued as a signing bonus and additional employee compensation has
been recorded at the stock's fair market value as of April 1, 2000, for
unrestricted shares and at an average simple traded value over a defined period
for restricted shares less a 15% discount because of its restricted nature. In
the accompanying statement of operations for the year ended December 31, 2000,
employee compensation of $713,700 has been recorded to reflect the issuance of
these shares.

In April 2000, the former owner exercised the option under the above employment
agreement to purchase 3,250,000 shares of the Company's restricted common stock.
The stock issued under this option was recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. For the year ended December 31, 2000, employee compensation of $240,338
was recorded upon exercise of this option.

The employment agreement with the former owner provides that should the former
owner be terminated by the Company for any reason, any unexercised stock options
can be exercised at any time within one year.

In December 2000, the former owner was terminated by the Company. Subsequently,
the former owner notified the Company in writing of his intention to exercise
the options on the remaining 12,000,000 shares of restricted stock. If exercised
on the termination date, the stock options would be valued at $2,952,000. This
amount is based on valuing the stock on the termination date using its average
simple traded value over a defined period, less a 15% discount because of its
restricted nature.

At December 31, 2000, the Company instituted legal action to void the employment
contract and issuance of the 12,000,000 option shares. During 2001, the Court
ruled against the Company. Management and legal counsel disagree with the ruling
of the Court and have appealed its decision. In the opinion of legal counsel the
Company will prevail in its efforts to void this employment contract.

In May 2000, Beach acquired all of the common stock of Revcon Technologies, Inc.
and Alliance Computer Systems, LLC. These business combinations were accounted
for as a purchase. Both of these companies provide networking, programming and
wireless connectivity services. The purchase price for both was 1,000,000 shares
of restricted common stock, plus a $22,000 cash payment. The cost of these
acquisitions, which amounted to $97,650, included stock recorded at an average
simple traded value over a defined period less a 15% discount because of its
restricted nature. In connection with these purchases, Beach Access.Net, Inc.
recorded
                                      -16-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE E - BUSINESS ACQUISITIONS (continued)

assets in excess of the purchase price of $33,892 which is being amortized over
five years. For the years ended December 31, 2001 and 2000, goodwill
amortization amounted to $6,766 and $3,948, respectively.

During the year ended December 31, 2001 and 2000, neither of these companies had
any significant activity. At December 31, 2001, the unamortized portion of
assets in excess of the purchase price, amounting to $23,178 was credited to the
wireless internet access system.

In connection with the Revcon Technologies, Inc. and Alliance Computer Systems,
LLC, acquisitions, the former owners signed five year employment agreements with
Beach. These agreements provide for, among other things, a base annual salary
and options on 2,000,000 shares of restricted common stock exercisable at $.001
depending on certain performance criteria being met.

In July 2000, the former owners exercised an option under the above employment
agreements to purchase 1,000,000 shares of the Company's restricted common
stock. Employee compensation was recorded at the stock's average simple traded
value over a defined period less a 15% discount because of its restricted
nature. For the year ended December 31, 2000, employee compensation of $105,400
was recorded upon exercise of this option.

During 2001, the Company terminated the former owners of Revcon Technologies,
Inc. and Alliance Computer Systems, LLC. Based on the opinion of legal counsel,
the Company has no liability for future payments on these employment contracts
at December 31, 2001.

In April 2000, Beach acquired the rights to provide internet access through May
2001 to approximately 1,300 customers. The cost for these rights was 3,200,000
shares of restricted common stock. Terms of the agreements provided for monthly
service revenues of approximately $20,000.

On August 1, 2000, certain of the above agreements were modified whereby an
additional 180,000 shares of the Company's restricted common stock was issued
for the above customer rights.

In the accompanying financial statements, the purchase cost of these customers,
which amounted to $271,814, has been recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. The cost of the purchase, less the excess of the value of the restricted
stock over the service fee income arising from this transaction, which was
changed to expense, was being amortized on a straight-line basis over twelve
months through May 2001. For the year ended December 31, 2000, amortization of
the purchase price amounted to $146,669.

                                      -17-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE E - BUSINESS ACQUISITIONS (continued)

At December 31, 2000, due to unsuccessful attempts to collect monthly service
revenue amounts due, management wrote-off the balance of unamortized customer
rights.

In January 2001, the Company acquired 55% of the common stock of GPS
Integrators, Inc. (GPS), a Texas corporation. GPS sells equipment and software
associated with a proprietary ice monitoring system used on airport runways. The
proprietary ice monitoring system is provided to GPS by companies owned by the
minority stockholders.

Terms of the purchase agreement provided for the following:

- 2,000,000 shares of Company's restricted stock for purchase of 55% of GPS;

- various performance stock options, up to a maximum of 8,000,000 shares,
  exercisable at $.001 per share, over varying periods of time through 2003.

Through December 31, 2001, none of the performance standards have been met which
would entitle the minority stockholders additional option shares.

The following summarized proforma information assumes the GPS acquisition had
occurred on January 1, 2000:

                                     ASSETS

Current assets                                                  $ 1,673,537

Other assets                                                      2,243,990

                                                                $ 3,917,527

                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities                                             $ 1,067,359

Other liabilities                                                 1,359,973

                                                                  2,427,332

Stockholders' equity                                              1,490,195

                                                                $ 3,917,527


                                      -18-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE E - BUSINESS ACQUISITIONS (continued)

                                   OPERATIONS

Revenues                                     $ 2,840,418

Net loss                                     $(2,905,195)

Net loss per common share                    $(    .0059)

The above amounts reflect adjustment for goodwill, amortization of goodwill and
recognition of minority interest in earnings.

Through December 31, 2001, all of the revenues of GPS since inception in 2000,
were derived from a sole source contract awarded by the U.S. Air Force. For the
year ended December 31, 2001, revenues earned on this contract and recorded in
the accompanying financial statements amounted to $166,190. At December 31,
2001, there were no amounts due to the Company under this contract.

The minority shareholders own or control companies that provide GPS with the ice
monitoring software and equipment it sells. For the year ended December 31,
2001, purchases from these related companies amounted to $137,167. At December
31, 2001, these related companies are owed $23,430, which is included in
accounts payable and accrued expenses in the accompanying financial statements.

See Note H for impairment adjustments related to GPS.

In April 2001, the Company signed a letter of intent to purchase all of the
outstanding stock of FireX2, Inc. The purchase will consist of exchanging
1,948,380 shares of the Company's restricted common stock for 1,948,380 shares
of FireX2. Additionally, the Company will issue stock options for 655,000 shares
to certain existing shareholders of FireX2.

The letter of intent contains various conditions that must be met before
closing, including, among others, satisfactory results from U.S. government
testing of FireX2's product.

At April 11, 2002, the purchase of FireX2, Inc. has not closed.

During the year ended December 31, 2000, the Company advanced $52,000 to FireX2.
At December 31, 2001, this amount is due to the Company and is included in the
accompanying financial statements as advance to pre-acquisition company.

                                      -19-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE F - PROFESSIONAL FEES

In March 2000, the Company issued 2,000,000 shares of restricted stock for
professional legal services to be rendered during the year ended December 31,
2001. The cost of these services was recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. For the year ended December 31, 2000, professional fees amounting to
$130,000 were recorded under this arrangement.

In July 2000, the Company retained a business advisor to provide various
business consulting and planning services. Terms of the agreement provided for
the following:

- five year term through December 31, 2004;
- stock option at $.001 per share on 3,000,000 shares of restricted stock upon
signing of the agreement;
- stock option at $.001 per share on an additional 1,000,000 shares of
restricted stock effective January 1, 2001;
- stock option at $.001 per share on an additional 1,000,000 shares of
restricted stock effective January 1, 2002.

During the year ended December 31, 2000, the business advisor exercised the
option to acquire 3,000,000 shares of restricted common stock. The stock issued
under this option, which was valued at $316,200, was recorded at the stock's
average simple traded value over a defined period less a 15% discount because of
its restricted nature. The exercise of this option has been recorded as stock
subscription receivable and is being recognized over the life of the consulting
agreement. For each of the years ended December 31, 2001 and 2000, the cost of
this consulting agreement amounted to $105,400.

In November 2000, the Company entered into an agreement with a South Carolina
corporation for sales and telecommunication consulting. The agreement is for a
two year term, extendable for additional one year terms. Among other things, the
agreement provides for the following:

- At signing, 150,000 shares of unrestricted stock as a signing bonus;
- Stock options on 4,850,000 shares of the Company's restricted common stock at
an exercise price of $.60 per share. These options have vested at December 31,
2001, but must be exercised within two years. By August 2001, these shares must
become free trading.
- A cash payment based on a set fee per room or square footage for services sold
on behalf of the Company.

For the year ended December 31, 2000, a signing bonus of $40,500, which
represents the stock's fair market value, was recorded in accordance with the
above agreement.

                                      -20-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE F - PROFESSIONAL FEES (continued)

In January 2001, the Company entered into a five year executive employment
agreement with an employee. Terms of the agreement provided for a base salary
and annual stock options for up to 1,000,000 shares of restricted common stock
at 50% of the shares' fair market value at January 1, 2001. The exercise of
stock options were contingent upon certain performance criterial being met.
Additionally, under certain circumstances, if the Company terminates the
contract before its expiration date, the employee is entitled to a maximum of 18
months of salary and stock options earned.

In late 2001, the above employment contract was mutually terminated. At December
31, 2001, the Company has no further obligations under this contract.

In February 2001, the Company issued 1,000,000 shares of restricted common stock
for consulting services. The consulting agreement is for a three year period.
The stock issued for these services, which was valued at $233,750, was recorded
at the stock's average simple traded value over a defined period less a 15%
discount because of its restricted nature. A stock subscription receivable was
recorded in conjunction with this transaction and is being recognized over the
life of the consulting agreement. For the twelve months ended December 31, 2001,
the cost of this consulting agreement amounted to $64,934.

NOTE G - STOCK SPLIT

In March 2000, effective April 15, 2000, the Company's Board of Directors
approved a 100:1 stock split. In conjunction with this stock split, the par
value of the Company's stock was changed to $.00001.

All shares and share prices disclosed in the accompanying financial statements
reflect the effect of the 100:1 stock split.

NOTE H - IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS

At December 31, 2001, the Company became aware of impairments in value for
certain long-lived equipment and fixtures and intangible assets. All of these
assets were acquired by the Company on or before June 30, 2001. The Company
evaluated impairment of long-lived and intangible assets in accordance with
Statement of Financial Standards No. 121, Impairment Of Long-Lived Assets And
Long-Lived Assets To Be Disposed Of.

A description of impaired assets, facts and circumstances leading to impairment,
how fair value was determined and amount of impairment loss follows.

                                      -21-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE H - IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS (continued)

In 2001 and 2000, the Company's wholly-owned subsidiary, constructed a system
and purchased component parts for a high speed wireless internet access system.
The system was operational at the beginning of 2001. During 2001, the subsidiary
earned insignificant amounts of revenue from this system's operation. Lack of
capital to fund future revenue growth and customer demand has led management to
determine its investment in the wireless system is impaired. The impairment
loss, amounting to $1,105,231, which is equal to the Company's investment in the
system and components, less depreciation through December 31, 2001, was
determined by management through an analysis of fair value to an arms-length
buyer.

In 2000, the Company's wholly-owned subsidiary acquired the net assets and
customer base of several dial-up internet service providers. In connection with
this transaction, in addition to long-lived assets purchased, goodwill of
$191,669 was recorded. During 2001 and 2000, the Company incurred substantial
operating losses associated with this dial-up internet access operation. Even
with substantial cost cutting subsequent to December 31, 2001, existing dial-up
internet access revenues are insufficient to support profitable operations. Lack
of capital to fund future revenue growth and customer demand has led management
to determine its investment in this dial-up internet access operation is
impaired. The impairment loss recorded by the Company, amounting to $62,000, is
equal to the Company's investment in long-lived assets and associated goodwill,
less depreciation and amortization through December 31, 2001, less the fair
value of the customer base and long-lived assets to an arms-length buyer.

In 2000, the Company acquired its wholly-owned subsidiary. In connection with
this transaction, goodwill amounting to $224,820, was recorded. In 2001 and
2000, the wholly-owned subsidiary incurred substantial operating losses. As
noted above, the Company has insufficient capital to increase subsidiary
revenues and customer demand for the subsidiaries services is weak. The
impairment to the subsidiaries operating assets has led management to determine
goodwill associated with this subsidiary is impaired. The impairment loss,
amounting to $146,133, which is equal to goodwill, less accumulated amortization
through December 31, 2001, was determined by management through an analysis of
the fair value of the subsidiary.

                                      -22-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE H - IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS (continued)

In January 2001, the Company acquired a 55% interest in a company that sells an
ice monitoring system and equipment. In connection with this transaction,
goodwill amounting to $477,700 was recorded. In the first quarter of 2001, this
company recorded $166,190 of revenues. Subsequently, through December 31, 2001,
no additional revenues were earned. For the year ended December 31, 2001, an
operating loss of $75,809 was recorded. The proprietary software and hardware
sold by this company is purchased from companies owned or controlled by the
minority stockholders. Management has evaluated its investment in this company
and determined the goodwill associated with this purchase is impaired. The
impairment loss, amounting to $385,105, which is equal to goodwill, less
accumulated amortization through December 31, 2001, was determined by management
through an analysis of the fair value of the subsidiary.

See Note I for business segments affected by each of the impairment losses noted
above.

NOTE I - SEGMENTS

The Company operates in three business segments; environmental services,
emerging technologies and governmental operations. Separate management of each
segment is required because each business unit is subject to different
marketing, delivery and technology strategies.

At December 31, 2001 and 2000, and for the years then ended, information on
reportable segments is as follows:

                                      -23-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE I - SEGMENTS (continued)

December 31, 2001
                                 Environmental   Emerging        Governmental        Segment    All       Eliminating    Consolidated
                                 services        technologies     operations         totals   other       adjustments      totals

  External revenue              $  60,095          $ 284,484       $  166,190   $  510,769    $ -          $ -           $   510,769

  Intersegment revenue          $  -               $ -             $ -          $ -           $ -          $ -           $ -

  Interest expense, net         $  85,831          $ 244,822       $ -          $  330,653    $ -          $ (138,232)   $   192,421

  Depreciation and
    amortization                $   4,084          $ 215,644       $   92,595   $  312,323    $     4,556  $ -           $   316,879

  Loss from continuing
    operations                  $ (10,256)       $(2,017,349)      $ (450,413) $(2,478,018)   $(2,147,333) $ -            (4,625,351)

  Significant non-cash items -

    Employee and consultant
      compensation              $ -                 $ 64,934       $ -         $    64,934    $   105,400   $ -           $  170,334

    Loss on impairment of
      long-lived assets           -                1,313,364          385,105    1,698,469       -            -            1,698,469


                                $ -              $ 1,378,298       $  385,105  $ 1,763,403    $   105,400    $ -         $ 1,868,803

  Total assets                  $  34,035          $ 513,646       $ -         $   547,681    $   106,859    $ -         $   654,540

  Expenditures for long-
    lived assets                $ -                $ 275,649       $ -         $   275,649     $   12,914    $ -         $   288,563

                                      -24-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE I - SEGMENTS (continued)

December 31, 2000


                               Environmental     Emerging        Govermental    Segment     All        Eliminating     Consolidated
                                services          technologies    operations     totals    other       adjustments        totals


  External revenue               $ -             $  427,780        $ -      $   427,780    $ -           $ -          $     427,780

  Intersegment revenue           $ -             $   -             $ -      $    -         $ -           $ -          $        -

  Interest expense, net          $  33,862       $   36,853        $ -      $    70,715    $ -           $ (12,626)   $      58,089

  Depreciation and
    amortization                 $   4,084       $   91,395        $ -      $    95,479    $      834    $ -          $      96,313

  Loss from continuing
    operations                   $ (62,264)     $(2,183,654)       $ -      $(2,245,918)    $( 400,948)   $ -         $  (2,646,866)

  Significant non-cash items -

    Employee and consultant
      compensation               $ -            $ 1,099,938        $ -      $ 1,099,938     $  307,400    $ -         $   1,407,338

    Loss on market
      investments                $ -                229,914          -          229,914               -     -               229,914

    Loss on disposal of
 discontinued operations         $ -                312,687          -          312,687               -     -               312,687



    Acquisition of long-
      lived assets                 236,250           393,635         -          629,885       (236,250)     -               393,635

                                 $ 236,250       $ 2,036,174       $ -      $ 2,272,424     $   71,150    $ -         $   2,343,574
  Total assets                   $  38,121       $ 1,701,308       $ -      $ 1,739,429     $1,122,175    $ -         $   2,861,604

 Expenditures for long-
   lived assets                  $ -             $ 1,600,094       $ -      $ 1,600,094     $ -           $ -         $   1,600,094


                                      -25-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE I - SEGMENTS (continued)

The chief operating decision maker does not use cash loaned or invested in the
Company's segments to evaluate their performance. However, such information is
furnished to the chief operating decision maker. For the years ended December
31, 2001 and 2000, cash loaned or invested in each of its segments amounted to:

                                                   2001              2000

         Environmental services                   $    52,000        $      -                                                                     -

         Emerging technologies                      1,209,986          1,542,595

         Governmental services                         55,096               -
                                                  $ 1,317,082        $ 1,542,595

The environmental services segment derives its revenues from sale or lease of a
proprietary biofiltration system used to treat polluted water. The emerging
technologies segment derives its revenues principally from dial-up access
services to residential and commercial customers. The governmental operations
segment derives its revenues principally from sale of ice monitoring software
and equipment.

Eliminating adjustments noted above consist of consolidating adjustments to
eliminate the parent company's (BIFS) investment in its consolidated entities.

As noted above and in the accompanying financial statements, the Company and its
operating segments have sustained substantial net operating losses. At December
31, 2001, working capital and stockholders' equity is a deficit of $656,951 and
$1,249,940 respectively. Its ability to continue as a going concern and realize
its assets and pay its liabilities is dependent upon generating sufficient
profitable revenues and obtaining funding to support operations and fund planned
capital improvements and acquisitions.

Management is attempting to obtain funds to support continuing operations and
fund capital improvements and acquisitions. At December 31, 2001, and
subsequently, management is negotiating with funding sources to meet its
projected needs. Management is confident they will be successful in their
negotiations and will obtain the necessary funding. Through April 11, 2002,
additional funding to support operations and capital improvements and
acquisitions has not been obtained.

                                      -26-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE J - DISCONTINUED OPERATIONS

In August 2000, the Company discontinued certain measurable portions of its
emerging technologies segment. The results of operations for the period
presented is reported as a component of discontinued operations in the
statements of operation.

Summarized results of the disposed segment for the year ended December 31, 2000,
are as follows:


        Net sales                              $ 338,712

        Operating loss                         $(230,217)


        Loss from discontinued
        operations                             $(378,279)


NOTE K - TREASURY STOCK

In December 1998, the Company canceled a stock purchase agreement with the
purchaser. As a result, 9,250,000 shares of common stock were returned to the
Company. The treasury stock is recorded at the original cost per share of the
stock transaction. However, these shares are currently held in an escrow account
on behalf of the Company. It is the intention of the Company that these shares
be held for future issuance to new investors or for future services to be
provided.

During the year ended December 31, 2000, treasury stock amounting to 6,250,000
shares, were issued for asset purchase, employee and consultant compensation and
professional fees.

                                      -27-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE L - FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107 Disclosure about Fair Values
of Financial Instruments requires disclosure of fair value to the extent
practicable for financial instruments which are recognized in the balance sheet.
The fair value disclosed herein is not necessarily representative of the amount
that could be realized or settled, nor does the fair value amount consider tax
consequences of realization or settlement. The following summarizes financial
instruments by individual balance sheet account at December 31, 2001:


                                               Carrying             Fair
                                                amount              value
   Financial assets -

    Cash                                     $    63,558             $    63,558


   Financial liabilities -

      Accounts payable and
       accrued expenses                      $   672,832             $   672,832


      Stockholder notes
       payable                               $ 1,106,900             $ 1,106,900


      Related party notes
       payable                               $    95,748             $    95,748



The carrying values of cash and accounts payable approximate their fair values.

The fair value of stockholder and related party notes payable is based on
current rates at which the Company could borrow funds with similar terms. There
is no significant difference between the carrying value and fair value of these
instruments.

                                      -28-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE M - INCOME TAXES

For the years ended December 31, 2001 and 2000, the provision for income
taxes consisted of the following:


                                                  2001            2000

Deferred tax benefit                       $   1,042,000             $   621,100

Less valuation allowance                      (1,042,000)               (621,100)

                                           $      -                  $    -

The valuation allowance has been provided by the management of the Company. This
is due to the uncertainty of the realization of the future benefit of the
deferred tax assets.

For the years ended December 31, 2001 and 2000, the following temporary
differences give rise to the above deferred tax benefits:


                                                   2001           2000

Unamortized start-up costs                   $ 1,036,000            $  1,586,000

Net operating loss carryovers                  4,390,000               1,619,000

Impairment of long-lived assets                1,198,000                    -

                                             $ 6,624,000            $  3,205,000

For the years ended December 31, 2001 and 2000, a reconciliation of the income
tax benefit at statutory rates to the Company's effective rate is as follows:


                                                   2001                     2000

Benefit computed at statutory rates
                                                    37.6%                   37.6%

    Nondeductible stock marketing and               (6.1%)                  (1.3%)

    Less valuation allowance on deferred
      tax assets                                  ( 31.5%)                ( 36.3%)

    Benefit computed at effective rate              -   %                   -   %

                                      -29-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE M - INCOME TAXES (continued)

At December 31, 2001 and 2000, deferred tax assets consist of the following:


                                                   2001          2000

Deferred tax assets                           $2,488,000              $1,205,000
Less valuation allowance
                                              (2,488,000)             (1,205,000)

                                              $       -               $      -

At December 31, 2001, the Company has $4,390,000 of tax net operating losses
available for carryforward through 2016.

NOTE N - OTHER COMMITMENTS AND CONTINGENCIES

In November 2000, the Company signed a contract for deicer disposal services at
Mid-America St. Louis Airport. Based on Company estimates, approximately $87,000
will be required to acquire and install the necessary equipment. The contract is
for a five year term with two five year extensions at the Airport's option.
Presently, gross revenues per year are projected at a minimum of approximately
$60,000.

The Company is involved as a defendant in several lawsuits. At December 31, 2001
and through April 11, 2002, management does not anticipate any material
financial impact on the Company in the event the lawsuits are unfavorably
settled.

NOTE O - LEASE ACTIVITY

The Company leases office space under short-term and long-term operating leases.
At December 31, 2001, future remaining payments under the long-term lease is as
follows:

           Year              Amount

           2002            $ 38,400
           2003              12,800

                           $ 51,200

For the years ended December 31, 2001 and 2000, rent expense on the above lease
activity amounted to $49,829 and $45,081, respectively.

NOTE P - STOCK OPTIONS

During 2000, the Company entered into various compensatory stock option
agreements with certain employees and consultants.

                                      -30-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE P - STOCK OPTIONS (continued)

The Company has adopted Statement of Financial Accounting Standard No. 123,
Accounting for Stock Based Compensation, to value the stock options granted to
employees and consultants. The value of each option granted has been determined
using the Black-Scholes stock option pricing model. The following assumptions
were made in estimating the fair value of the options: risk-free interest rate
of 5.33%; no dividend yield; expected lives from zero to five years; no expected
volatility. Costs charged to operations during 2000 were $625,551.

As described in Note E, the Company has granted a 12,000,000 stock option to the
former owner. The exercise price of these options is $.001. Based on the
Black-Scholes stock option pricing model described above, the value of this
option at the grant date, if recorded, would be $876,000. Based on an employment
agreement these shares are exercisable if the former owner is terminated. In
December 2000, the former owner was terminated. At December 31, 2000, the
Company had instituted legal action to void the employment agreement and
issuance of the above option shares. In the opinion of Management and legal
counsel, the Company will prevail in their legal proceeding against the former
owner and the employment agreement and associated stock options will be voided.

The following is a summary of stock options granted and outstanding for the
years ended December 31, 2001 and 2000:

                                                2001                     2000

Outstanding, beginning of year                 7,850,000                   -

Options granted                                9,000,000              15,100,000

Options exercised                                     -               (7,250,000)

Options forfeited                            ( 1,000,000)                   -

Outstanding,                                  15,850,000               7,850,000
  end of year

Exercisable                                    5,850,000               4,850,000

The weighted average exercise price of options granted during 2000 was $.193.
The weighted average fair value of options granted during 2000 was $.253.

                                      -31-

                          BIFS TECHNOLOGIES CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE Q - OTHER RELATED PARTY ACTIVITY

The Company is related through its majority shareholder and other shareholders
to a company that provides research and development services. These shareholders
own a minority interest in this related company.

During the period ended December 31, 2001, the Company recorded $150,000 in
costs associated with assistance provided in developing an emerging technology
product.

In the accompanying financial statements, research and development costs of
$150,000 were recorded in connection with this transaction. At December 31,
2001, amounts due this related company amounted to $145,000. This amount is
recorded in accounts payable and accrued expenses in they accompanying financial
statements.

                                      -32-

BIFS TECHNOLOGIES CORPORATION


Period-Type                                                            12-Months
Fiscal year end                                                December 31, 2001
Period start                                                     January 1, 2001
Period end                                                     December 31, 2001
Cash                                                                      63,558
Securities                                                                     0
Receivables                                                               11,130
Allowances                                                                     0
Inventory                                                                      0
Current assets                                                             4,868
PP&E                                                                 445,842
Depreciation                                                             102,339
Total assets                                                             654,540
Current liabilities                                                      736,507
Bonds                                                                          0
Preferred mandatory                                                            0
Preferred                                                                      0
Common                                                                     5,380
Other - SE                                                            (1,255,320)
Total liability and equity                                               654,540
Sales                                                                    510,769
Total revenues                                                           510,769
CGS                                                                      806,736
Total costs                                                            4,130,940
Other expenses                                                             6,023
Loss provision                                                                 0
Interest expense                                                         192,421
Income pretax                                                         (4,625,351)
Income tax                                                                     0
Income continued                                                      (4,625,351)
Discontinued                                                                   0
Extraordinary                                                                  0
Changes                                                                        0
Net income                                                            (4,625,351)
EPS basic                                                          (       .0088)
EPS diluted                                                                    0



                            GPS INTEGRATORS, INC.

                              FINANCIAL STATEMENTS

                             DECEMBER 31, 2000

                                CONTENTS

                                                                     Page

INDEPENDENT AUDITORS' REPORT                                           1

FINANCIAL STATEMENTS

    BALANCE SHEET                                                      2

    STATEMENT OF OPERATIONS AND CHANGES IN
    RETAINED EARNINGS                                                  3

    STATEMENT OF CASH FLOWS                                            4

NOTES TO FINANCIAL STATEMENTS                                        5 - 6


                                   601 N Ashley Drive, Suite 700 Tampa, FL 33602
                                                813 229-6300 / Fax: 813 229-0088
B2d Semago                                                  semagocpa.com
================================================================================
CPSs & Business Advisors            808-B NW 16 Avenue Gainesville, FL 32604
                                                352 375-2839 / Fax: 352 372-5931
                                                            churchillcpa@msn.com

To the Stockholders
GPS Integrators, Inc.
Canyon Lake, Texas

                          Independent Auditors' Report

We have audited the accompanying balance sheet of GPS Integrators, Inc. as of
December 31, 2000, and the related statement of operations and changes in
retained earnings and cash flows for the year ended 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 audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GPS Integrators, Inc. as of
December 31, 2000, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.

/s/ B2d Semago
CERTIFIED PUBLIC ACCOUNTANTS
May 18, 2001

                              GPS INTEGRATORS, INC.
                                  BALANCE SHEET
                                DECEMBER 31, 2000

                                     ASSETS

CURRENT ASSET - ACCOUNTS RECEIVABLE                                  $ 458,273
                                                                     =========


                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES

    Accounts payable                                                 $ 429,467
    Management fees payable                                             27,806
                                                                     ---------

                                                                       457,273
                                                                     ---------

STOCKHOLDERS' EQUITY - COMMON STOCK                                      1,000
                                                                     ---------

                                                                     $ 458,273
                                                                     =========



                 The accompanying notes to financial statements
                     are an integral part of this statement.


                          GPS INTEGRATORS, INC.
         STATEMENT OF OPERATIONS AND CHANGES IN RETAINED EARNINGS
                   FOR THE YEAR ENDED DECEMBER 31, 2000



SALES                                                              $ 2,412,638

COST OF SALES                                                        1,977,981
                                                                   -----------

GROSS PROFIT                                                           434,657
                                                                   -----------

OTHER OPERATING EXPENSES

    Royalty fees                                                        42,857
    Management fees                                                    391,800
                                                                   -----------

                                                                       434,657
                                                                   -----------

NET INCOME                                                                   -

RETAINED EARNINGS, BEGINNING OF YEAR                                         -
                                                                   -----------

RETAINED EARNINGS, END OF YEAR                                     $         -
                                                                   ===========


                 The accompanying notes to financial statements
                     are an integral part of this statement.


                              GPS INTEGRATORS, INC.
                             STATEMENT OF CASH FLOWS
                      FOR THE YEAR ENDED DECEMBER 31, 2000



CASH FLOWS FROM OPERATING ACTIVITIES

    Cash received from customers                                   $ 1,954,365
    Cash paid for cost of sales                                     (1,548,514)
    Cash paid for other operating
        expenses                                                    (  406,851)
                                                                   -----------

           Net cash used by operating activities                    (    1,000)
                                                                   -----------

CASH FLOWS FROM FINANCING ACTIVITIES -
    PURCHASE OF COMMON STOCK                                             1,000
                                                                   -----------

NET CHANGE IN CASH                                                           -

CASH, BEGINNING OF YEAR                                                      -
                                                                   -----------

CASH, END OF YEAR                                                  $         -
                                                                   ===========


                         RECONCILIATION OF NET INCOME TO
                   CASH FLOWS FROM OPERATING ACTIVITIES


NET INCOME                                                         $         -

RECONCILING ADJUSTMENTS

    Increase in accounts receivable                                 (  458,273)
    Increase in account payable                                        429,467
    Increase in management fees payable                                 27,806
                                                                   -----------

CASH FLOWS FROM OPERATING ACTIVITIES                               $(    1,000)
                                                                   ===========



                 The accompanying notes to financial statements
                     are an integral part of this statement.


                              GPS INTEGRATORS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company activities

GPS Integrators, Inc. (the Company) was incorporated in the state of Texas in
September 1999. Operations commenced in May 2000.

The Company was formed to provide products to improve winter operations at
airports. Currently the Company is selling equipment and software associated
with a proprietary ice monitoring system used on airport runways.

The Company's office is located in Canyon Lake, Texas.

Revenue recognition

Revenues from sale of ice monitoring software and hardware are recognized at the
time the products are shipped and accepted by the customer.

Use of estimates

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

Accounts receivable

The Company is engaged as a supplier of ice monitoring software and equipment
used on airport runways. The Company was awarded a $2,872,047 sole source
contract by the U. S. Air Force (USAF). Through December 31, 2000, all sales
have been to the USAF under this contract.

At December 31, 2000, accounts receivable totaling $458,273, is due from the
USAF.

NOTE B - ROYALTY AGREEMENT

A portion of the Company's ice monitoring product contains proprietary patented
software the Company licenses. Terms of the license agreement provides for a
royalty fee equal to 10% of revenues from the patented product, as defined.

For the year ended December 31, 2000, royalty fees paid under this agreement
amounted to $42,857.


                          GPS INTEGRATORS, INC.
                      NOTES TO FINANCIAL STATEMENTS
                            DECEMBER 31, 2000


NOTE C - RELATED PARTY ACTIVITY

The stockholders of the Company consist of two closely held corporations. The
majority owner corporation is in turn owned by two corporations that provide
component parts for the Company's ice monitoring product. For the year ended
December 31, 2000, purchases from these related companies amounted to
$1,523,282. For the year ended December 31, 2000, these related companies are
fully paid for all purchases.

The two stockholder companies noted above provide various management, sales and
administrative services to the Company. For the year ended December 31, 2000,
the stockholder companies were paid $391,800 in management fees for these
services. At December 31, 2000, management fees payable amounted to $27,806.

NOTE D - SUBSEQUENT EVENT

On January 26, 2001, the Company stockholders sold 55% of their outstanding
shares to BIFS Technologies Corporation, a Florida corporation engaged in
providing environmental services and emerging technologies.


                          BIFS TECHNOLOGIES CORPORATION

             PRO FORMA CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


                                 CONTENTS

                                                                        Page

PRO FORMA CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

        BALANCE SHEET                                                     1

        STATEMENT OF OPERATIONS                                           2

NOTES TO PRO FORMA CONDENSED CONSOLIDATING FINANCIAL STATEMENTS           3



                      BIFS TECHNOLOGIES CORPORATION
             PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET
                            DECEMBER 31, 2000
                                   (UNAUDITED)

                                  ASSETS


                                                                 Pro forma       Consolidated
                                  BIFS              GPS         adjustments        Pro forma
                              -----------       ----------      -----------      ------------

Current assets                $   999,774       $ 458,273       $ 215,490(b)     $ 1,673,537

Equipment, net of
     accumulated
     depreciation               1,373,787             -               -            1,373,787

Other assets                      488,043             -           382,160(a)         870,203
                              -----------     -----------       ---------        -----------

                              $ 2,861,604       $ 458,273       $ 597,650        $ 3,917,527
                              ===========     ===========       =========        ===========



                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities           $   610,086       $ 457,273       $     -          $ 1,067,359

Long-term liabilities           1,359,973             -               -            1,359,973

Stockholders' equity              891,545           1,000         597,650          1,490,195
                              -----------     -----------       ---------        -----------

                              $ 2,861,604       $ 458,273       $ 597,650        $ 3,917,527
                              ===========       =========       =========        ===========


                  See accompanying notes to pro forma condensed
                       consolidating financial statements.


                          BIFS TECHNOLOGIES CORPORATION
                        PRO FORMA CONDENSED CONSOLIDATING
                             STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 2000
                                   (UNAUDITED)

                                                                 Pro forma       Consolidated
                                  BIFS              GPS         adjustments        Pro forma
                              -----------       ----------      -----------      ------------
                                                    (b)

Revenues                      $   427,780     $ 2,412,638        $    -          $ 2,840,418
                              -----------     -----------        ---------       -----------

Expenses

  Cost of sales                   349,887       1,977,981             -            2,327,868
  Salaries and benefits         1,264,866            -                -            1,264,866
  Professional fees               292,223            -                -              292,223
  General and
       administrative             645,134         434,657        (215,490)(b)        864,301
  Depreciation and
       amortization                96,313            -             95,540 (a)        191,853
  Marketing                       145,944            -                -              145,944
  Interest                         50,365            -                -               50,365
  Loss on investments             229,914            -                -              229,914
                              -----------     -----------       ---------        -----------

                                3,074,646       2,412,638        (119,950)         5,367,334
                              -----------     -----------       ---------        -----------

Net loss from continuing
       operations              (2,646,866)           -            119,952         (2,526,916)

Loss from discontinued
       operations              (  378,279)           -                -           (  378,279)
                              -----------     -----------       ---------        -----------

Net loss                      $(3,025,145)    $      -          $ 119,950        $(2,905,195)
                              ===========     ===========       =========        ===========

Net loss per common share     $(    .0061)                                       $(    .0059)
                              ===========                                        ===========

Weighted average
       common shares
       outstanding
       (In hundreds)            4,938,179                                          4,958,179
                              ===========                                        ===========

Loss from continuing
       operations             $(    .0053)                                       $(    .0051)
                              ===========                                        ===========

Loss from discontinued
       operations             $(    .0008)                                       $(    .0008)
                              ===========                                        ===========


                  See accompanying notes to pro forma condensed
                       consolidating financial statements.


                      BIFS TECHNOLOGIES CORPORATION
                          NOTES TO PRO FORMA CONDENSED
                    CONSOLIDATING FINANCIAL STATEMENTS
                            DECEMBER 31, 2000
                                   (UNAUDITED)


On January 26, 2001, BIFS Technologies Corporation (BIFS) acquired 55% of the
assets and operations of GPS Integrators, Inc. (GPS) for 2,000,000 shares of
common stock in a transaction accounted for as a purchase.

The accompanying pro forma condensed consolidating balance sheets as of December
31, 2000, and statements of operations for the year then ended, assume that the
acquisition of GPS took place on January 1, 2000. The accompanying pro forma
information is presented for illustrative purposes only and is not necessarily
indicative of the financial position or results of operations which would
actually have been reported had the acquisition been in effect during the
periods presented, or which may be reported in the future.

The accompanying pro forma condensed consolidating financial statements should
be read in conjunction with the historical financial statements and related
notes thereto for BIFS and GPS.

Note 1 - Pro Forma Adjustments

     (a)  Goodwill acquired in the purchase of GPS is being amortized over its
          estimated useful life of five years beginning on January 1, 2000. At
          December 31, 2000, and for the year then ended, goodwill and goodwill
          amortization on the GPS purchase is as follows:


               Original cost                    $ 477,700

               Amortization                      ( 95,540)
                                                ---------

                                                $ 382,160
                                                =========

     (b)  GPS pays management fees to its shareholders for services rendered.
          For the year ended December 31, 2000, BIFS prorata share of these
          management fees is as follows:

               Management fees                  $ 391,800

               BIFS prorata share                     55%
                                                ---------

                                                $ 215,490
                                                =========


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

There were no disagreements with B2d Semago on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth the names and positions with the Company and ages
of the executive officers and directors of the Company. Directors will be
elected at the Company's annual meeting of shareholders and serve for one year
or until their successors are elected and qualify. Officers are elected by the
Board and their terms of office are at the discretion of the Board, except to
the extent governed by employment contract.

                                                              Director     Term
Name             Age Title                                     Since     Expires
                     Director, President and Chief Executive
Alpha J. Keyser  63  Officer                                   1992         2001
Thomas Cannon    56  Director, Marketing Director              1993         2001
James A. Feiler  41  Director, Technical Director              2000         2001

Duties, Responsibilities and Experience

Alpha J. Keyser, Director, President and Chief Executive Officer

Since 1992, Mr. Keyser has served as the Company's President and Chief Executive
Officer. Mr. Keyser has devoted his time and efforts in the ongoing development
of the Company's current business and has been able to utilize his past
experience to benefit the Company's growth and expansion. Mr. Keyser has more
than 30 years experience in construction, heavy equipment manufacture
development operation and sales, oil and gas drilling operations, and
explorative hydrogeology. Mr. Keyser has started and served as CEO of a number
of successful small businesses in these areas. In 1989, he started AAA
Environmental Services Corp., an environmental services company formed for the
development and marketing of equipment, technology and services in wastewater
environmental clean up, solid and hazardous waste treatment and air emission
control. From 1985 to 1988, he was President and owner of Algasco, Inc., a
natural gas exploration and development company which drilled 19 gas wells in
the vicinity of Victoria, Texas. From 1978 to 1986, he was President and owner
of Alpha Gas Development, Inc., which was formed to do well exploration and
development in Kentucky. The company leased in excess of 35,000 acres in Whitley
County, Kentucky, resulting in the discovery of one of, if not the, largest gas
field in the state. In 1985, the company obtained a $500,000 grant from
Department of Energy to provide the extension of Devonian shale into southeast
Kentucky. Mr. Keyser sold the company in 1984 but remained as President and CEO
until late 1986. From 1973 to 1977, he was the owner and President of Al J.
Keyser, Inc., which marketed and installed more than 60 sewage pumping stations
in southwest Florida. From 1963 to 1972, he was Eastern Regional Sales Manager
for Hein-Wenner Corp. He assisted in the original controls design and pioneered
the concept and sale of the larger1/2yard and up hydraulic excavators through
the eastern U.S. and Canada. He became the number one producer in the company.
From 1960 to 1963, he was employed in the sales department of Bay City Shovels
and was responsible for installation, demonstration and troubleshooting for a
worldwide producer of heavy construction equipment, cranes, backhoes and
shovels.

Thomas Cannon, Director

During the past five years, Mr. Cannon has served as the Company's marketing
director and has met with potential business prospects on a continuous basis.
Mr. Cannon was instrumental in the Company's first Pollution Control Group
contract. He has extensive marketing expertise, especially to the nation's
airports and to the military. He is responsible for all marketing efforts and
directs all sales agents. From 1991 to 1993, he was employed by Flow
International, Inc., and was responsible for sales and market development at
their services division. From 1987 to 1991, Mr. Cannon founded Rampart Water
Blast, Inc., which developed technology to remove rubber and paint from runways
at commercial and military airports throughout the U.S. He took the company from
start-up to $3.5 million gross sales in four years. He sold the company to Flow
International. From 1980 to 1987, he formed Coastal Striping, Inc., to paint
roads and runways at military bases throughout the U.S., reaching $4 million in
gross sales. He closed the company when the military changed its bidding
procedures and funding. From 1976 to 1980 he managed Safe Line, Inc., a company
that painted highways in Ohio. From 1968 to 1976, he was employed by Standard
Oil Co. Ohio (now known as BP). He started there after graduating from college
and progressed through marketing and real estate departments to become project
manager.

James A. Feiler, P.G., R.E.M.

Jim joined the Company in April 2000 and currently serves as a Director of the
Company and as its Technical Director. His primary responsibilities include
assisting with the marketing of the patented biofiltration system and directing
the design, installation and field operations of BIFS equipment. From 1996 until
joining the company, he was employed by Professional Service Industries as a
Department Manager and Consultant for Environmental Services. Primary duties
included managing the Atlanta Environmental Department that conducted Phase I
Environmental Site Assessments, Phase II Environmental Site Assessments, site
investigations, and remediation and asbestos/LBP/IAQ/IH services. He was also
responsible for planning, growth and coordinating sales, marketing, and
operations to achieve revenue generation, profits and quality control. From 1995
to 1996, Jim was and independent consulting geologist specializing in landfill
compliance monitoring of groundwater, surface water, and leachate, petroleum and
hazardous waste site investigation and corrective action implementation and oil
and natural gas exploration, development, and production. Before this, Mr.
Feiler worked with environmental companies engaged in managing, designing,
installing and operating soil and groundwater remediation systems for RCRA and
UST projects. Mr. Feiler has a degree in Geology from Miami University and is a
licensed Geologist and a Registered Environmental Manager.

ITEM 10. EXECUTIVE COMPENSATION

Al Keyser has received no compensation for serving in the capacity of President
and Chief Executive Officer. Mr. Keyser, as "Tenants in the Entireties"
ownership with Victoria Keyser, his wife, is the beneficial owner of 272,000,000
shares of the Company's common stock.

Should the Company become profitable and produce commensurate cash flows from
operations, compensation for Mr. Keyser will be reviewed, modified as
appropriate and approved by the Company's Board of Directors.

It is the responsibility of the Company's officers and its Board of Directors to
determine appropriate compensation programs for key personnel. Such
determination and timing thereof will be based upon such factors as equity
sales, operating cash flows, capital requirements, and other similar factors
incorporated into the Company's business plan.

There are no annuity, pension, or retirement benefits proposed to be paid to
officers, directors, or employees of the Company in the event of retirement at a
normal date pursuant to any presently existing plan provided or contributed to
by the Company, or any of its subsidiaries, if any.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of December 31, 2000, with
respect to the beneficial ownership of common stock by each person who, to the
knowledge of the Company, beneficially owned or had the right to acquire more
than 5% of the outstanding common stock; each director of the Company; and all
executive officers and directors of the Company as a group:

Title of          Name and Address of                  Number of      Percent of
Class             Beneficial Owner (1)                  Shares        Class (2)

Common            Alpha J. and Victoria Keyser       272,000,000          53%
                  525 Sutton Place
                  Longboat Key, FL 34228

Common            Thomas Cannon                                0          0%

Common            James E. Feiler                              0          0%

Common            All Directors and Executive        272,000,000          53%
                  Officers as a Group

     (1) As used in this table, "beneficial ownership" means the sole or shared
power to vote or to direct the voting of a security or the sole or shared
investment power with respect to a security (i.e., the power to dispose of or to
direct the disposition of a security)

(2) Figures are rounded to the nearest percentage.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company completes a thorough due diligence process in hiring its consultants
and key personnel. The following sets forth shares issued to such key personnel
as a result of the exercise of options.

Name                     # of Shares         Relationship          Date Acquired
Dr. Harold Campbell      3,500,000             Consultant             8/14/00

Paul Aubin                 238,534        Manager, Beach Access       8/21/00
                           706,667                                    8/29/00
                           706,667                                    11/1/00

Kenneth Bourg              566,133         Manager of R&D             8/14/00
                           293,333                                    11/1/00

Certain family members of the Company's President own shares of the Company's
common stock as set forth below:

Alpha J. Keyser, President and CEO, is related to the following shareholders:

Name                     # of Shares          Relationship         Date Acquired
Victoria Keyser         272,000,000              Wife                1992 - 93

These shares are owned as "Tenants in the Entireties".

The following describes the shareholder notes payable and when they were issued:

                           Year                               Amount
                           1993                               $102,500
                           1994                                 66,400
                           1995                                 80,000
                           1996                                 40,000
                           1997                                 60,000
                                                               ---------
                           Total                              $348,900

BSA is wholly owned by family members of Mr. Keyser.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:  See Exhibit Index.
(b)      Reports on Form 8-K: The Company filed a Current Report on Form 8-K
during the fiscal quarter ended December 31, 2000.

                                  EXHIBIT INDEX

         Exhibit                       Exhibit                             Page
         Number                     Description                           Number
         ----------                         ---------------           ----------
3.1      Articles of Incorporation, as amended (1)
3.2      Bylaws (1)

4.1      Instruments defining the rights of holders (Refer to Exhibit 3)

9        Voting Trust Agreement (not applicable)

10       Material contracts
         10.1     Beach Access.Net, Inc., Stock Purchase Agreement  (2)
         10.2     Alliance Computer Systems, LLC, Agreement  for
                  Sale of Business Assets (2)
         10.3     Revcon Technologies Corp., Stock Purchase Agreement (2)
         10.4     Form of MidAmerica St. Louis Airport contract (3)
         10.5     Form of Interactive Internet Services Agreement (3)
         10.6     National Sales Agreement (3)
         10.7     Letter of Intent (3)
         10.8     Active Participation Investor Special Services Agreement (3)
         10.9     Form of Harding Asset Funds Agreement (4)

11       Statement re: Computation of per share earnings (not applicable)

21       Subsidiary of the Registrant

24  Power  of  Attorney  (not  applicable)   -----------------------------

(1) Incorporated by reference to our Registration Statement on Form 10-SB filed
February 3, 2000, file no. 0-29329

(2) Incorporated by reference to our Registration Statement on Form 10-SB/A-2
filed October 13, 2000, file no. 0-29329

(3) Incorporated by reference to our Registration Statement on Form 10-SB/A-3
filed March 30, 2001, file no. 0-29329.

(4) Incorporated by reference to our Registration Statement on Form 10-SB/A-4
filed September 7, 2001, file no. 0-29329.

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date: April 24, 2002                 BIFS TECHNOLOGIES CORP.


                                By:  /s/ Alpha J. Keyser
                                     ---------------------------------
                                     Alpha J. Keyser, President and
                                     Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.


Date: April 24, 2002            By:  /s/  Alpha J. Keyser
                                     ---------------------------------
                                     Alpha J. Keyser, President and Director
                                    (Principal Financial and Accounting Officer)


Date: April 24, 2002            By:  /s/  Thomas Cannon
                                     -----------------------------------
                                     Thomas Cannon, Director


Date: April 24, 2002            By:  /s/ James A. Feiler
                                     -----------------------------------
                                     James A. Feiler, Director`