SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

         (Mark One)

|X|  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

For the fiscal year ended: December 31, 2000

                                       OR

|_|  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

For the transition period from _______________ to  _________________  Commission
File Number: 0-24431


                                 LIL MARC, INC.
                 (Name of small business issuer in its charter)


         Nevada                                              84-1417774
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)


830 Third Avenue, New York, New York                            10022
(Address of Principal Executive Offices)                     (Zip Code)

Issuer's telephone number, including area code:      (212)  829-5800

Securities registered under Section 12(b) of the Exchange Act:


Title of each class                    Name of each exchange on which registered

N/A                                    N/A


Securities registered under Section 12(g) of the Exchange Act:

                                  Common Stock
                                (Title of class)

<PAGE>

     Check  whether  the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

Yes  |X|       No  |_|

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-B that is not contained in this form, and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

     The issuer's revenues for its most recent fiscal year are $0.

     As of March 26, 2001 the aggregate  market value of the issuer's  shares of
common stock held by non-affiliates was approximately $192,766.

     The issuer's number of shares  outstanding of Common Stock,  $.01 par value
per share, as of March 26, 2001, was 2,668,666.

<PAGE>

                               TABLE OF CONTENTS

ITEM                                                                       PAGE

PART I.......................................................................1

  ITEM 1.  DESCRIPTION OF BUSINESS...........................................1
  ITEM 2.  DESCRIPTION OF PROPERTY...........................................2
  ITEM 3.  LEGAL PROCEEDINGS.................................................2
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............2

PART II......................................................................3

  ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..........3
  ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.........4
  ITEM 7.  FINANCIAL STATEMENTS..............................................5
  ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.......................................................5

PART III.....................................................................6

  ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
  COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT..........................6
  ITEM 10. EXECUTIVE COMPENSATION............................................7
  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....8
  ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................9
  ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..................................9

SIGNATURES..................................................................10

<PAGE>

                                     PART I

This document includes statements that may constitute forward-looking statements
made pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. The Company would like to caution readers  regarding certain
forward-looking  statements in this document and in all of its communications to
shareholders  and others,  press  releases,  securities  filings,  and all other
communications. Statements that are based on management's projections, estimates
and assumptions are forward-looking  statements.  The words "believe," "expect,"
"anticipate,"    "intend,"   and   similar   expressions    generally   identify
forward-looking  statements.  While the Company  believes in the veracity of all
statements made herein,  forward-looking statements are necessarily based upon a
number of estimates and assumptions  that,  while  considered  reasonable by the
Company,   are  inherently  subject  to  significant   business,   economic  and
competitive uncertainties and contingencies and known and unknown risks. Many of
the  uncertainties  and contingencies can affect events and the Company's actual
results  and could  cause its  actual  results to differ  materially  from those
expressed  in any  forward-looking  statements  made by,  or on behalf  of,  the
Company.

ITEM 1. DESCRIPTION OF BUSINESS

     Lil Marc, Inc. (the "Company") was incorporated under the laws of the state
of Nevada on April 22, 1997. The Company was incorporated as a development stage
enterprise in the baby products industry to develop,  manufacture and market the
"LiL Marc", a plastic toilet  training  devise for young boys. To facilitate the
manufacturing  and marketing of the LiL Marc, on December 30, 1999,  the Company
incorporated a subsidiary under the name LILM, Inc.  pursuant to the laws of the
state of Nevada.

     Pursuant  to a stock  purchase  agreement  dated  as of May 19,  2000  (the
"Purchase Agreement") by and among the Company,  George I. Norman III, Laurie J.
Norman,   Alewine  Limited  Liability  Company   ("Alewine")  and  Linda  Bryson
(collectively  the "Sellers") and ComVest Capital Partners LLC  ("ComVest"),  on
May 25, 2000 (the "Closing Date") ComVest  purchased  1,194,166 shares of common
stock of the Company (the "Common  Stock") for an  aggregate  purchase  price of
$315,000.  ComVest also purchased,  pursuant to the Purchase  Agreement,  for an
aggregate  purchase  price of  $250,000:  (i) an 18 month  warrant  to  purchase
3,000,000  shares of Common  Stock (the  "Warrant"),  and (ii)  1,000,000  newly
issued  shares of Common  Stock.  Additionally,  on the Closing  Date the former
officers and directors of the Company resigned and were replaced by designees of
ComVest.  Subsequent to the Closing Date and pursuant to the Purchase Agreement,
LILM,  Inc. was acquired by a former  officer of the Company  resulting in LILM,
Inc. no longer being under the control of the Company.  As a result, the Company
has no  interest  in its former  business  (the  development,  manufacture,  and
marketing of the LiL Marc training urinal).

     Since the Closing Date of the Purchase  Agreement,  the  Company's  plan of
operation has been to attempt to merge or effect a business  combination  with a
domestic or foreign private operating entity. The Company's  management believes
that there are perceived benefits to being a


                                       1
<PAGE>

"reporting  company"  with a class of  publicly-traded  securities  which may be
attractive to private entities.  Other than activities relating to attempting to
locate such a candidate,  the Company does not currently  anticipate  conducting
any operations.

     The Company may enter into a  definitive  agreement  with a wide variety of
private businesses  without  limitation as to their industry or revenues.  It is
not possible at this time to predict when, if ever,  the Company will enter into
a  business  combination  with  any such  private  company  or what  will be the
industry, operating history, revenues, future prospects or other characteristics
of any such company. As of the date hereof, the Company is not currently engaged
in negotiations concerning any such business combination.

Employees

     Presently,  the  Company  has  no  full-time  or  other  employees.  It  is
anticipated that the Company's President,  Chief Financial Officer and Secretary
will devote  significant time to meet their respective duties and obligations to
the Company.

ITEM 2. DESCRIPTION OF PROPERTY

     The Company does not own or lease any plants or other property.

ITEM 3. LEGAL PROCEEDINGS

     The Company is not subject to any material legal proceedings.

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.


                                       2
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Market Information

     The Common Stock is traded in the  over-the-counter  market and  quotations
are published on the NASD OTC Bulletin Board under the symbol "LILM", and in the
National  Quotation  Bureau,  Inc.  ("NQB") "pink  sheets" under LiL Marc,  Inc.
Quotations  on the Common  Stock set forth  below do not  constitute  a reliable
indication  of the  price  that a holder of the  Common  Stock  could  expect to
receive upon a sale of any particular quantity thereof.

     The following  table sets forth the range of high and low bid prices of the
Common Stock for each calendar  quarterly period since the first quarter 1999 as
reported  by the NASD OTC  Bulletin  Board.  Prices  reported  represent  prices
between dealers, do not include retail markups,  markdowns or commissions and do
not necessarily represent actual transactions.

     The high and low bid price  quotations for our Common Stock, as reported by
NASDAQ, are as follows for the periods indicated:

                                                              High     Low
                                                              ----     ---

           First Quarter 1999 ...........................    $.250    $.155
           Second Quarter 1999 ..........................    $.280    $.100
           Third Quarter 1999 ...........................    $.563    $.150
           Fourth Quarter 1999 ..........................    $.270    $.140

           First Quarter 2000 ...........................    $.615    $.180
           Second Quarter 2000 ..........................    $.938    $.375
           Third Quarter 2000 ...........................    $.813    $.500
           Fourth Quarter 2000 ..........................    $.563    $.313

     As of March 26,  2001,  the  Company had issued and  outstanding  2,668,666
shares of Common Stock and there were  approximately  40 shareholders of record,
which figure does not take into account those  shareholders  whose  certificates
are held in the name of broker-dealers.

     The  ability  of an  individual  shareholder  to trade  their  shares  in a
particular  state may be subject to various rules and regulations of that state.
A number of states  require that an issuer's  securities  be registered in their
state or  appropriately  exempted from  registration  before the  securities are
permitted  to  trade  in that  state.  Presently,  the  Company  has no plans to
register its securities in any particular state. Further, most likely the Common
Stock will be subject to the  provisions  of Section 15(g) and Rule 15g-9 of the
Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act"),  commonly
referred  to as the  "penny  stock"  rule.  Section  15(g)  sets  forth  certain
requirements for  transactions in penny stock and Rule 15g-9(d)(1)  incorporates
the  definition  of  penny  stock  as that  term is used in Rule  3a51-1  of the
Exchange Act.


                                       3
<PAGE>

     The Securities and Exchange Commission (the "Commission") generally defines
penny stock to be any equity  security  that has a market  price less than $5.00
per share,  subject to certain exceptions.  Rule 3a51-1 provides that any equity
security is considered  to be a penny stock unless that security is:  registered
and traded on a national  securities  exchange meeting specified criteria set by
the Commission; authorized for quotation on The NASDAQ Stock Market; issued by a
registered  investment  company;  excluded  from the  definition on the basis of
price (at least  $5.00  per  share) or the  issuer's  net  tangible  assets;  or
exempted from the  definition  by the  Commission.  If the Company's  shares are
deemed to be a penny stock,  trading in the shares will be subject to additional
sales practice  requirements on broker-dealers  who sell penny stocks to persons
other than established  customers and accredited  investors,  generally  persons
with assets in excess of  $1,000,000  or annual income  exceeding  $200,000,  or
$300,000 together with their spouse.

     For transactions covered by these rules, broker-dealers must make a special
suitability  determination  for the  purchase of such  securities  and must have
received  the  purchaser's  written  consent  to the  transaction  prior  to the
purchase.  Additionally,  for any  transaction  involving  penny  stock,  unless
exempt,  the rules require the delivery,  prior to the first  transaction,  of a
risk  disclosure  document  relating to the penny stock market.  A broker dealer
must also disclose the  commissions  payable to both the  broker-dealer  and the
registered representative,  and current quotations for the securities.  Finally,
monthly  statements  must be sent  disclosing  recent price  information for the
penny stocks held in the account and  information on the limited market in penny
stocks. Consequently,  these rules may restrict the ability of broker-dealers to
trade and/or maintain a market in the Company's  Common Stock and may affect the
ability of shareholders to sell their shares.

     Dividends

     The Company has not declared or paid dividends or made distributions in the
past,  and the Company does not  anticipate  that it will pay cash  dividends or
make distribuitons in the forseeable future.

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

Plan of Operation

     On the Closing Date,  ComVest  purchased  1,194,166  shares of Common Stock
from the Sellers for an aggregate  purchase price of $315,000.  Also pursuant to
the Purchase  Agreement,  ComVest  purchased from the Company,  for an aggregate
purchase price of $250,000,  (i) 1,000,000  newly issued shares of Common Stock,
and (ii) the Warrant to purchase an additional 3,000,000 shares of Common Stock.
The Warrant is  exerciseable  until  November  25, 2001 at an exercise  price of
$0.25 per share.

     Subsequent to the Closing Date,  pursuant to a stock sale agreement between
the Company and  Alewine,  the  Company  sold all of the issued and  outstanding
capital stock of the wholly-owned subsidiary,  LILM, Inc. to Alewine in exchange
for 100,000 shares of Common Stock. The 100,000 shares of the Company's treasury
stock have been cancelled. As a result of such transactions, the


                                       4
<PAGE>

Company  has no interest in the former  business of its former  subsidiary  (the
development, manufacture, and marketing of the LiL Marc training urinal).

     Subsequent to the above  referenced  transactions,  the  Company's  plan of
operation has been to merge or effect a business  combination with a domestic or
foreign private operating entity. The Company's  management  believes that there
are  perceived  benefits  to  being  a  "reporting  company"  with  a  class  of
publicly-traded  securities which may be attractive to private  entities.  Other
than activities  relating to attempting to locate such a candidate,  the Company
does not currently anticipate conducting any operations.

     The Company may enter into a  definitive  agreement  with a wide variety of
private businesses  without  limitation as to their industry or revenues.  It is
not possible at this time to predict when, if ever,  the Company will enter into
a  business  combination  with  any such  private  company  or what  will be the
industry, operating history, revenues, future prospects or other characteristics
of any such company. As of the date hereof, the Company is not currently engaged
in negotiations concerning any such business combination.

     At December 31, 2000, the Company had cash and cash equivalents of $245,542
as contrasted to accounts payable of $1,117. As the Company's current operations
are limited to seeking a merger or business combination  candidate,  the Company
believes that the Company's cash and cash equivalents  shall fund all operations
until any such merger or combination is consummated.

     Although it does not currently plan to do so, the Company may in the future
raise  additional  funds through the sale of its  securities.  In addition,  the
Company  would  receive up to $750,000 if ComVest  should  exercise the Warrant;
however no assurances can be given that ComVest will exercise such Warrant.

ITEM 7. FINANCIAL STATEMENTS

     See the financial statements annexed to this Report.

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

     Not Applicable


                                       5
<PAGE>

                                    PART III

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

     The directors and executive officers of the Company are as follows:

Name                   Age     Position
----                   ---     --------

David Boris             41     President and Director (Principal Executive
                               Officer)

Joseph P. Wynne         36     Chief Financial Officer, Secretary and Director
                               (Pincipal Financial and Accounting Officer)

     Information with respect to the foregoing  executive officers and directors
is set forth below.

     Mr. David Boris was recently  appointed as President  and a Director of the
Company in January  2001.  Mr. Boris  devotes no less time to the affairs of the
Company  than he deems  reasonably  necessary  to  discharge  his  duties to the
Company. Mr. Boris was Executive Vice President of Ladenburg Thalmann & Co. Inc.
from April 1998 to July 2000 and co-founder,  Director and principal shareholder
of  Brenner  Securities  Corporation  (including  predeccessor  companies)  from
November  1990 to March 1998.  In addition,  from November 1985 to November 1990
Mr. Boris was a Senior Vice President and limited  partner in the Risk Arbitrage
Department of  Oppenheimer  & Company and was a member of the Business  Group at
W.R. Grace & Company from May 1984 to November 1985.

     Mr. Boris received a Masters of Business Administration degree with a major
in both finance and  organizational  management from Columbia Business School at
Columbia  University  in 1984. In addition,  Mr. Boris  graduated Cum Laude from
Vassar  College  upon  completing  an  independent  major in  cognitive  science
focusing on artificial intelligence in 1982.

     Mr.  Joseph P.  Wynne has been Chief  Financial  Officer,  Secretary  and a
Director of the Company  since May 2000.  Mr. Wynne  devotes no less time to the
affairs of the Company  than he deems  reasonably  necessary  to  discharge  his
duties to the Company.  Mr. Wynne is a Certified Public  Accountant and has been
Chief Financial  Officer and Financial  Principal of Commonwealth  Associates LP
and  ComVest  Capital  Partners,  LLC  since  October  1995.  Mr.  Wynne  joined
Commonwealth  Associates in October 1993 as the Controller.  Prior thereto, from
November  1990 to  October  1993 Mr.  Wynne  was  Supervisor  for the  Corporate
Accounting  Department  of Bear  Stearns & Co.,  Inc.  and from  January 1988 to
November 1990 was Audit Supervisor at Goldstein, Golub and Kessler.

     Mr. Wynne received a Masters of Business  Administration  degree in finance
from  Leonard N. Stern  School of Business at New York  University  in 1994.  In
addditon, Mr Wynne graduated with a Bachelors of Business  Administration degree
in accounting from Hofstra University in 1987.


                                       6
<PAGE>

     The Company's Directors serve until the next annual meeting of stockholders
and until  their  successors  are  elected  and duly  qualified.  The  Company's
officers  are  elected  annually  by the  Board of  Directors  and  serve at the
discretion  of the Board of Directors.  There are no agreements  with respect to
the election of directors.

     Based  solely on its  review of Forms 3  received  by it during  2000,  and
written representations from reporting persons that no Forms 5 were required for
such  persons  for 2000,  the  Company  believes  that all  filing  requirements
pursuant  to  Section  16(a)  of the  Exchange  Act for  2000  and  prior  years
applicable to those persons who were directors,  officers, and beneficial owners
of more than ten  percent  of its Common  Stock from and after the May 25,  2000
change in control of the Company were  complied with on a timely basis except as
previously reported.

ITEM 10. EXECUTIVE COMPENSATION

Compensation of Executive Officers and Directors

     None of the Company's current executive officers and directors received any
compensation from the Company during the year ended December 31, 2000.

     During the year ended December 31, 2000, but prior to the  consummation  of
the Purchase  Agreement the Company accrued salary and rental obligations in the
aggregate amount of $8,700 to its former  management and their affiliate.  Those
accrued obligations included salaries payable to George I. Norman III and Laurie
J.  Norman in the  amounts  of  $4,500  and  $1,500,  respectively,  and  rental
obligations in the amount of $2,700 payable to Alewine.  All of these salary and
rental  obligations  were assumed by the Sellers  pursuant to  provisions of the
Purchase Agreement.

     During the year ended December 31, 1999, the Company issued an aggregate of
87,000  shares of Common Stock to George I. Norman III,  Laurie J.  Norman,  and
Alewine in lieu of salary and rental payments. The shares were issued at a price
of $0.10 per share, as follows: 45,000 to George I. Norman III; 15,000 to Laurie
J. Norman; and 27,000 to Alewine.

     The Company does not currently issue a salary to its officers, directors or
employees  nor does  the  Company  have a bonus,  profit  sharing,  or  deferred
compensation  plan for the  benefit of its  employees,  officers  or  directors.
Furthermore,  the Company has not entered into an employment  agreement with any
officers or directors.  Once the Company  acquires other  business  entities its
compensation  policy may be amended in order to secure the  services  of certain
valuable executive employees.

Employment Agreements and Arrangements

     At present the Company  does not have any  employment  agreements  in place
with any director,  executive officer or employee. The Company may enter into an
agreement with certain qualified executive officers if deemed appropriate by the
Board of Directors to be in the best interests of the Company.  No agreement has
been effected as of the date hereof.


                                       7
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table  sets  forth,  as of March 15,  2001,  based upon our
records  and  information   obtained  from  the  persons  named  below,  certain
information  concerning  beneficial ownership of our shares of Common Stock with
respect to (i) each person known to own more than 5% of our  outstanding  shares
of Common Stock,  (ii) each of our executive  officers and directors,  and (iii)
all of our executive officers and directors as a group:

                                          Amount             Approximate
                                          and Nature         Percentage
                                          of Beneficial      of Common
      Identity                            Ownership          Stock Owned
      --------                            ---------          -----------
ComVest Capital Partners, LLC (1)         5,194,166 (2)      91.6%
Michael S. Falk (1)                       5,194,166 (2)(3)   91.6%
Keith Rosenbloom (1)                      5,194,166 (2)(4)   91.6%
Robert Priddy (1)                         5,194,166 (2)(5)   91.6%
David Boris                               -0-                0%
Joseph P. Wynne                           -0-                0%
All executive officers and directors,     -0-                0%
as a group (2 persons)

(1)  The addresses for the foregoing entity and persons are:

o    ComVest Capital  Partners,  LLC,  Michael S. Falk and Keith  Rosenbloom are
     located at 830 Third Avenue, New York NY 10022

o    Robert  Priddy is located at RMC  Capital,  1640 Powers  Ferry,  Suite 125,
     Marietta, Georgia 30067

(2)  Includes  3,000,000  shares  of Common  Stock  that may be  purchased  upon
     exercise of the Warrant.  The Warrant is  exerciseable  until  November 25,
     2001 at an exercise price of $0.25 per share.

(3)  Michael S. Falk is deemed to be the  beneficial  owner of an  aggregate  of
     5,194,166  shares of Common  Stock  beneficially  owned by ComVest.  In his
     capacity  as manager  and  principal  member of  ComVest,  Mr.  Falk shares
     indirect voting and dispositive power with respect to ComVest's shares. Mr.
     Falk  disclaims  beneficial  ownership of the  securities  owned by ComVest
     other  than that  portion  corresponding  to his  proportionate  membership
     interest  in  ComVest.  Mr.  Falk  has no  direct  ownership  of  any  such
     securities.

(4)  Keith  Rosenbloom is deemed to be the  beneficial  owner of an aggregate of
     5,194,166  shares of Common  Stock  beneficially  owned by ComVest.  In his
     capacity as manager and principal member of ComVest,  Mr. Rosenbloom shares
     indirect voting and dispositive power with respect to ComVest's shares. Mr.
     Rosenbloom  disclaims  beneficial  ownership  of the  securities  owned  by
     ComVest  other  than  that  portion   corresponding  to  his  proportionate
     membership  interest in ComVest.  Mr. Rosenbloom has no direct ownership of
     any such securities.

(5)  Robert  Priddy is  deemed to be the  beneficial  owner of an  aggregate  of
     5,194,166  shares of Common  Stock  beneficially  owned by ComVest.  In his
     capacity as manager and  principal  member of ComVest,  Mr.  Priddy  shares
     indirect voting and dispositive power with respect to ComVest's shares. Mr.
     Priddy  disclaims  beneficial  ownership of the securities owned by ComVest
     other  than that  portion  corresponding  to his  proportionate  membership
     interest  in  ComVest.  Mr.  Priddy  has no  direct  ownership  of any such
     securities.


                                       8
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Except for the  transactions  pursuant to the  Purchase  Agreement by which
ComVest acquired control of the Company and the compensation  arrangements  with
the Company's  former  management  and their  affiliate as described in Item 10,
"Executive  Compensation  -  Compensation  of Executive  Officers and Directors"
above,  there have been no  transactions  during the last two years, or proposed
transactions,  between the Company and any executive officer,  director, nominee
for election as director,  or shareholder  owning more than five percent (5%) of
the  Company's   outstanding  shares,  nor  any  member  of  the  abovementioned
individuals' immediate family.

     The  Company's  officers  and  directors  are  subject to the  doctrine  of
corporate  opportunities  pursuant to Chapter 78 - Private  Corporations  of the
Nevada Revised Statute only insofar as it applies to business  opportunities  in
which the Company has indicated an express interest.  If directors are presented
with business opportunities that may conflict with business interests identified
by the Company,  such  opportunities must be disclosed to the Board of Directors
and made  available to the Company.  In the event that the Board shall reject an
opportunity so presented and only in that event,  any of the Company's  officers
and directors may avail themselves of such an opportunity.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

Exhibit 2.1    Purchase  Agreement  by and among the  Company,  George I. Norman
               III, Laurie J. Norman,  Alewine Limited Liability Company,  Linda
               Bryson and ComVest Capital Partners LLC dated as of May 19, 2000.

Exhibit 2.2    Stock Sale  Agreement  by and  between  the  Company  and Alewine
               Limited Liability Company dated as of May 19, 2000.

Exhibit 3.1    Articles of  Incorporation,  incorporated by reference to Exhibit
               3.1 to Form 10-SB,  filed with the  Commission  on June 10, 1998,
               file Number 0-24431.

Exhibit 3.2    By-Laws,  incorporated by reference to Exhibit 3.2 to Form 10-SB,
               filed with the Commission on June 10, 1998, file Number 0-24431.

     (b)  Reports on Form 8-K.

No reports on Form 8-K were filed during the last quarter of the period  covered
by this report.


                                       9
<PAGE>

                                   SIGNATURES

     In  accordance  with Section 13 or 15(d) the Exchange  Act, the  registrant
     caused this report to be signed on its behalf by the undersigned, thereunto
     duly authorized.


                                          LIL MARC, INC.


                                          By: /s/ David Boris
                                          ---------------------------------
                                              David Boris
                                              President
                                              (Principal Executive Officer)
                                              March 28, 2001

     In  accordance  with the Exchange Act, this Report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.

Signature                     Title                              Date
---------                     -----                              ----


/s/ David Boris               President and Director             March 28, 2001
------------------------      (Principal Executive Officer)
David Boris


/s/ Joseph P. Wynne           Chief Financial Officer,           March 28, 2001
------------------------      Secretary and Director (Principal
Joseph P. Wynne               Financial and Accounting Officer)


                                       10
<PAGE>


                                 LIL MARC, INC.
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2000



                                                          BERENSON & COMPANY LLP
<PAGE>

                                 LIL MARC, INC.
                          (A Development Stage Company)


                                TABLE OF CONTENTS

                   YEARS ENDED DECEMBER 31, 2000 AND 1999 AND
             PERIOD APRIL 22, 1997 (INCEPTION) TO DECEMBER 31, 2000


                                                                      Page
                                                                      ----

Independent Auditors' Report                                            1


Balance Sheet                                                           2


Statements of Operations                                                3


Statements of Stockholders' Equity                                      4


Statements of Cash Flows                                                5


Notes to Financial Statements                                          6-9


                                                          BERENSON & COMPANY LLP
<PAGE>

                     [LETTERHEAD OF BERENSON & COMPANY LLP]


                          INDEPENDENT AUDITORS' REPORT

Board of Directors
Lil Marc, Inc.
(A Development Stage Company)
New York, NY


We have audited the accompanying  balance sheet of Lil Marc, Inc. (a development
stage  company)  as  of  December  31,  2000,  and  the  related  statements  of
operations,  stockholders' equity 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.  The financial  statements of Lil Marc, Inc. for
the period April 22, 1997  (inception)  to December  31,  1999,  were audited by
other  auditors  whose report dated  February 11, 2000,  included an explanatory
paragraph  describing   conditions  that  raised  substantial  doubt  about  the
Company's ability to continue as a going concern.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. 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 Lil Marc, Inc. as of December
31, 2000, and the results of its operations and its cash flows for the year then
ended in conformity with accounting  principles generally accepted in the United
States.

                                                   /s/ BERENSON & COMPANY LLP

New York, NY
March 12, 2001


<PAGE>

                                                                          Page 2

                                 LIL MARC, INC.
                          (A Development Stage Company)

                                  BALANCE SHEET

                                DECEMBER 31, 2000




                                     ASSETS

Current assets:
   Cash and cash equivalents                                          $ 245,542
                                                                      ---------

             Total current assets                                     $ 245,542
                                                                      =========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                   $   1,117
                                                                      ---------

             Total current liabilities                                    1,117
                                                                      ---------

Stockholders' equity:
   Common stock, $0.01 par value; 5,000,000 shares
     authorized; 2,668,666 shares issued and outstanding                 26,686
   Additional paid-in capital                                           267,671
   Accumulated deficit during the development stage                     (49,932)
                                                                      ---------
                                                                        244,425
                                                                      ---------

                                                                      $ 245,542
                                                                      =========


    The accompanying notes are an integral part of the financial statements.


                                                          BERENSON & COMPANY LLP
<PAGE>

                                                                          Page 3

                                 LIL MARC, INC.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                       Period
                                                        Years ended                April 22, 1997
                                                        December 31,               (inception) to
                                               ------------------------------       December 31,
                                                   2000               1999               2000
                                               -----------        -----------        -----------
<S>                                            <C>                <C>                <C>
Sales                                          $      --          $       346        $       346

Cost of sales                                         --                 --                 --
                                               -----------        -----------        -----------

Gross margin                                          --                  346                346
                                               -----------        -----------        -----------

Operating expenses:
   General and administrative                       24,996             15,782             60,661
   Amortization                                      1,433              5,730             17,191
                                               -----------        -----------        -----------
                                                    26,429             21,512             77,852
                                               -----------        -----------        -----------

Loss from operations                               (26,429)           (21,166)           (77,506)
                                               -----------        -----------        -----------

Other income (expense):
   Gain on sale of subsidiary                       21,132               --               21,132
   Interest expense                                   --                 --                 (900)
   Interest income                                   7,342               --                7,342
                                               -----------        -----------        -----------
                                                    28,474               --               27,574
                                               -----------        -----------        -----------

Net income (loss)                              $     2,045        $   (21,166)       $   (49,932)
                                               ===========        ===========        ===========

Net income (loss) per common share             $       .00        $      (.01)
                                               ===========        ===========

Weighted average number of
  shares outstanding                             2,328,392          1,681,904
                                               ===========        ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                                          BERENSON & COMPANY LLP
<PAGE>

                                                                          Page 4

                                 LIL MARC, INC.
                          (A Development Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY
                        YEAR ENDED DECEMBER 31, 2000 AND
             PERIOD APRIL 22, 1997 (INCEPTION) TO DECEMBER 31, 2000

<TABLE>
<CAPTION>

                                                                                                      Accumulated
                                                                                                        deficit
                                                            Common stock              Additional       during the          Total
                                                     ---------------------------        paid-in        development     stockholders'
                                                       Shares           Amount          capital            stage           equity
                                                     ----------       ----------       ----------       ----------       ----------
<S>                                                  <C>              <C>              <C>              <C>              <C>
Balance, April 22, 1997                                    --         $     --         $     --         $     --         $     --

Common stock issued for cash
  at $0.00 per share                                    666,666            6,666           (1,666)            --              5,000
Issuance of shares to acquire patent
  rights recorded at predecessor cost
  of $0.00 per share                                    400,000            4,000           (1,000)            --              3,000
Issuance of 540,000 shares of
  common stock at $0.10 per share                       540,000            5,400           48,600             --             54,000
Stock offering costs                                       --               --             (8,843)            --             (8,843)
Net loss, December 31, 1997                                --               --               --             (9,251)          (9,251)
                                                     ----------       ----------       ----------       ----------       ----------

Balance, December 31, 1997                            1,606,666           16,066           37,091           (9,251)          43,906

Issuance of 75,000 shares of
  common stock at $0.10 per share                        75,000              750            6,750             --              7,500
Net loss, December 31, 1998                                --               --               --            (21,560)         (21,560)
                                                                      ----------       ----------       ----------       ----------

Balance, December 31, 1998                            1,681,666           16,816           43,841          (30,811)          29,846

Issuance of 87,000 shares of
  common stock at $0.10 per share                        87,000              870            7,830             --              8,700
Net loss, December 31, 1999                                --               --               --            (21,166)         (21,166)
                                                                      ----------       ----------       ----------       ----------

Balance, December 31, 1999                            1,768,666           17,686           51,671          (51,977)          17,380

Cancellation of treasury stock                         (100,000)          (1,000)         (24,000)            --            (25,000)
Common stock issued for cash at
  $0.25 per share                                     1,000,000           10,000          240,000             --            250,000
Net income, December 31, 2000                              --               --               --              2,045            2,045
                                                                      ----------       ----------       ----------       ----------

Balance, December 31, 2000                            2,668,666       $   26,686       $  267,671       $  (49,932)      $  244,425
                                                     ==========       ==========       ==========       ==========       ==========
</TABLE>

    The accompanying notes are an integral part of the financial statements.

                                                          BERENSON & COMPANY LLP
<PAGE>

                                                                          Page 5

                                 LIL MARC, INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                                                  Period
                                                                                      Years ended             April 22, 1997
                                                                                      December 31,            (inception) to
                                                                               --------------------------      December 31,
                                                                                  2000            1999              2000
                                                                               ---------        ---------        ---------
<S>                                                                            <C>              <C>              <C>
Cash flows from operating activities:
   Net income (loss)                                                           $   2,045        $ (21,166)       $ (49,932)
   Adjustments to reconcile net income (loss) to
    net cash used by operating activities:
      Amortization                                                                 1,433            5,730           17,191
      Gain on sale of subsidiary                                                 (21,132)            --            (21,132)
      Common stock issued for services                                              --              8,700            8,700
      Changes in assets and liabilities:
        Increase in accounts payable                                               8,317            1,500            9,817
                                                                               ---------        ---------        ---------
             Net cash used by operating activities                                (9,337)          (5,236)         (35,356)
                                                                               ---------        ---------        ---------

Cash flows from investing activities:
   Cash included pursuant to sale of subsidiary                                   (1,109)            --             (1,109)
   Purchase of patent rights                                                        --               --            (28,650)
                                                                               ---------        ---------        ---------
             Net cash used by investing activities                                (1,109)            --            (29,759)
                                                                               ---------        ---------        ---------

Cash flows from financing activities:
   Stock offering costs                                                             --               --             (5,843)
   Common stock issued for cash                                                  250,000             --            316,500
                                                                               ---------        ---------        ---------
             Net cash provided by financing activities                           250,000             --            310,657
                                                                               ---------        ---------        ---------

Net increase (decrease) in cash and cash equivalents                             239,554           (5,236)         245,542
Cash and cash equivalents, beginning of period                                     5,988           11,224             --
                                                                               ---------        ---------        ---------

Cash and cash equivalents, end of period                                       $ 245,542        $   5,988        $ 245,542
                                                                               =========        =========        =========

Supplemental cash flow information:
  Cash paid during the period for:
      Interest                                                                 $    --          $    --          $    --
      Income taxes                                                                   100             --                100

Noncash financing activities:
   Patent rights and deferred interest acquired for
     common stock and assumption of note payable                               $    --          $    --          $  30,000
</TABLE>

    The accompanying notes are an integral part of the financial statements.

                                                          BERENSON & COMPANY LLP
<PAGE>

                                                                          Page 6

                                 LIL MARC, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


1.   Organization and description of business:

     Lil  Marc,   Inc.  (a  development   stage  company)  (the  "Company")  was
     incorporated  under the laws of the State of Nevada on April 22, 1997.  The
     Company was organized to engage in the marketing of the "Lil Marc" training
     urinal. The Company is considered a development stage company as defined in
     SFAS No. 7.

     LILM,  Inc. was  incorporated  as a wholly-owned  subsidiary of the Company
     under the laws of the State of Nevada on December 30, 1999.  LILM, Inc. was
     organized to continue  with the product  development  and sales of the "Lil
     Marc" training urinal.

     On May 19, 2000,  the Board of Directors  approved a proposal to change the
     stated purpose of the  corporation as stated in Article III of the Articles
     of Incorporation to a general purpose.

2.   Summary of significant accounting policies:

     a.   Principles of consolidation:

          The  financial  statements  include  the  accounts  of a  wholly-owned
          subsidiary of the Company. All significant  intercompany  accounts and
          transactions have been eliminated in  consolidation.  The wholly-owned
          subsidiary was sold in May, 2000.

     b.   Net income (loss) per common share:

          The  computation  of net income  (loss)  per share of common  stock is
          based on the weighted average number of shares  outstanding during the
          period of the financial statements. Warrants have not been included in
          the computation of net income (loss) per share of common stock because
          to do so would have been antidilutive.  However,  these warrants could
          have potentially dilutive effects in the future.

     c.   Cash and cash equivalents:

          For cash flow  purposes,  the  Company  considers  all  highly  liquid
          investments  with a maturity of three months or less when purchased to
          be cash equivalents.

          The Company  maintains its cash accounts in a commercial  bank located
          in New York. The balance in the bank is insured by the Federal Deposit
          Insurance Corporation (FDIC) up to $100,000.


                                                          BERENSON & COMPANY LLP
<PAGE>

                                                                          Page 7

                                 LIL MARC, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


2.   Summary of significant accounting policies: (Continued)

     d.   Patents:

          During  1997,  the  Company  purchased  the  patent for the "Lil Marc"
          training urinal. Amortization was computed on the straight-line method
          over the estimated five year life of the patent.  Amortization expense
          for the years ended  December 31, 2000 and 1999 was $1,433 and $5,730,
          respectively.

                                                        2000            1999
                                                      --------        --------

                    Patent                            $   --          $ 28,650
                    Accumulated amortization              --           (15,758)
                                                      --------        --------

                                                      $   --          $ 12,892
                                                      ========        ========

          On February 3, 2000, the Company assigned the rights of the patent for
          the "Lil Marc" training urinal to its subsidiary, LILM, Inc.

          The patent rights for the "Lil Marc" training urinal were sold as part
          of the Stock Sale Agreement (note 7).

     e.   Estimates:

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of assets  and
          liabilities 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.

     f.   Revenue recognition:

          A  revenue   recognition  policy  will  be  established  when  planned
          principal operations commence.


                                                          BERENSON & COMPANY LLP
<PAGE>

                                                                          Page 8

                                 LIL MARC, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


2.   Summary of significant accounting policies: (Continued)

     g.   Stock offering costs:

          Costs  incurred in connection  with the Company's  stock offering have
          been capitalized and were charged to the proceeds of the offering upon
          its completion.

     h.   Fair value of financial instruments:

          The carrying amounts of cash and cash equivalents and accounts payable
          approximate fair value due to the short maturity of these instruments.

3.   Related party transactions:

     In 1997,  the  Company  issued  400,000  shares of its common  stock to its
     stockholders  for the  acquisition  of the patent  rights to the "Lil Marc"
     training urinal.

     In 1999,  the Company issued 87,000 shares of its common stock at $0.10 per
     share to its stockholders for gross services valued at $8,700.

4.   Income taxes:

     The total of the deferred tax asset is as follows:

                                                     2000            1999
                                                   --------        --------

                    Deferred tax asset             $  8,000        $ 10,000
                    Valuation allowance              (8,000)        (10,000)
                                                   --------        --------

                    Net deferred tax asset         $   --          $   --
                                                   ========        ========

     The deferred tax asset is the book vs. tax  difference  from net  operating
     loss carryforwards.

     The Company had  available,  at December 31, 2000,  unused  operating  loss
     carryforwards of  approximately  $50,000 for federal and state tax purposes
     that may be applied  against  future  taxable income and begin to expire in
     December 2012.


                                                          BERENSON & COMPANY LLP
<PAGE>

                                                                          Page 9

                                 LIL MARC, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999


5.   Forward stock split:

     On September 4, 1997, the stockholders'  meeting approved a 2-for-1 forward
     stock  split.  The forward  stock  split is  reflected  in these  financial
     statements on a retroactive basis.

6.   Public offering:

     In  1997,  the  Company  offered  to the  public  1,000,000  shares  of its
     authorized  common  stock at $0.10 per share.  The costs of the offering of
     $8,843 have been charged to the proceeds of the  offering.  540,000  shares
     were issued for a total of $54,000.

7.   Stock transactions and warrants:

     On May 25, 2000, pursuant to a Stock Purchase Agreement dated May 19, 2000,
     a new  stockholder  acquired  a  controlling  interest  in the  Company  by
     purchasing  1,194,166  shares of common stock from its  stockholders for an
     aggregate  purchase  price of  $315,000.  In  addition,  the  Company  sold
     1,000,000 shares of its authorized  common stock at $0.25 per share to this
     new stockholder for $250,000 cash. As part of the transaction,  the Company
     issued warrants to purchase a total of 3,000,000  shares of common stock at
     $0.25 per share. These warrants expire on November 25, 2001.

     Subsequently,  and pursuant to a Stock Sale  Agreement  dated May 19, 2000,
     the Company sold all of the outstanding  shares  (1,000,000  shares) of its
     wholly-owned  subsidiary  LILM, Inc. to one of its stockholders for 100,000
     shares of that  stockholder's  common stock.  These  100,000  shares of the
     Company's treasury stock have been canceled.


                                                          BERENSON & COMPANY LLP