UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                  FORM 10 QSB


            Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934


          For the quarterly period ended           September 30, 2002

               Commission file Number                   000-25019


                               PVAXX CORPORATION

            (Exact Name of Registrant as Specified in its Charter)

                                    COLORADO
                (State or Other Jurisdiction of Incorporation)


              000-25019                                     05-0499528
       (Commission File Number)                         (I.R.S. Employer
                                                     Identification Number)

           237 Park Avenue
            New York  NY                                      10017
        (Address of Principal
          Executive Offices)                                (Zip Code)

                                (212) 551 1494
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

YES [X] NO [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:

Common Stock, No Par Value - 22,626,355 shares as of September 30, 2002.

<PAGE>

FORWARD-LOOKING INFORMATION

THIS FORM 10QSB AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY PVAXX
CORPORATION INCORPORATED OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY
CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SECURITIES ACT
OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. FIFTEEN U.S.C.A. SECTIONS 77Z-2 AND
78U-5 (SUPP. 1996). THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT,
BELIEF OR CURRENT EXPECTATIONS OF PVAXX CORPORATION AND MEMBERS OF ITS
MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE
BASED.

PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS
ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES,
AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD-
LOOKING STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE STATEMENT FOR
FORWARD-LOOKING STATEMENTS REFERENCED IN EXHIBIT 99.1 TO THIS FORM 10QSB AND
ARE HEREBY INCORPORATED HEREIN BY REFERENCE. THE COMPANY UNDERTAKES NO
OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED
ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE
OPERATING RESULTS OVER TIME.


ITEM 1. FINANCIAL STATEMENTS

                                PVAXX CORPORATION
                          (A Development Stage Company)
                               FINANCIAL STATEMENTS


Index to Financial Statements                                           F-1
Accountant's Review Report                                              F-2
Consolidated Balance Sheets                                             F-3
Consolidated Statements of Operations                                   F-4
Consolidated Statements of Changes in Stockholders' Equity/(Deficit)    F-5
Consolidated Statements of Cash Flows                                   F-6
Notes to Consolidated Financial Statements                              F-7

<PAGE>

                          Accountant's Review Report

To the Board of Directors and Stockholders of PVAXX Corporation

We have reviewed the accompanying consolidated balance sheet of PVAXX
Corporation and Subsidiaries as of September 30, 2002 and the related
consolidated statements of operations, changes in stockholders' equity and
cash flows for the three month period ended September 30, 2002 and September
30, 2001 and the cumulative totals for development stage operations from March
16, 2000 (inception) through September 30, 2002, in accordance with Statements
on Standards for Accounting and Review Services issued by the American
Institute of Certified Public Accountants. All information included in these
financial statements is the representation of management of PVAXX Corporation.

A review consists principally of inquiries of Company's personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit conducted in accordance with auditing standards generally
accepted in the United States of America, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with accounting principles generally accepted in the United
States of America.

As discussed in Note #1 to the financial statements, the Company and all of
its subsidiaries are in a development stage, and have yet to realize any
substantial revenue. This raises substantial doubt about the company's ability
to continue as a going concern. Management's plan in regard to these matters
is discussed in Note #1. The accompanying financial statements do not include
any adjustments that might be necessary should the Company be unable to
continue as a going concern.


PKF
Nottingham, UK

November 14, 2002

<PAGE>


                               PVAXX CORPORATION
                         (A Development Stage Company)
                          CONSOLIDATED BALANCE SHEETS

                                  ASSETS
                                  ------

<TABLE>
<CAPTION>
                                                                 2002           2002
                                                         September 30        June 30
                                                           (Unaudited)      (Audited)

<S>                                                      <C>                <C>
CURRENT ASSETS:
   Cash and cash equivalents                              $         0            562
   Accounts receivable                                          4,248          6,746
   VAT (tax) refund receivable                                 28,069         32,050
   Inventories                                                 42,572         26,893
   Prepaid expenses                                            47,512         61,401
                                                            ---------     ----------
            Total current assets                          $   122,401   $    127,652
PROPERTY, PLANT and EQUIPMENT: (Note 8)
   Leasehold property improvements                        $    41,389         41,389
   Machinery & equipment                                      787,534        789,176
   Office furniture & equipment                                66,828         66,828
   Motor vehicles                                              12,775         12,775
   Less: Accumulated depreciation                            (334,430)      (297,088)
                                                            ---------      ---------
            Net property, plant & equipment               $   574,096    $   613,080
INTANGIBLE ASSETS: (Notes 1 and 2)
   Patents & trademarks                                   $   187,726    $   179,438
OTHER ASSETS:
   Deposits                                               $     4,349    $     4,349
                                                           ----------     ----------
     Total assets                                         $   888,572    $   924,519
                                                           ----------     ----------

                     LIABILITIES AND SHAREHOLDERS' EQUITY
                     ------------------------------------

CURRENT LIABILITIES:
   Bank overdraft                                         $    13,098              0
   Accounts Payable                                           199,504        218,998
   Capital lease obligations (Note 7)                             506          1,232
   Loans payable to related parties (Note 1)                  224,510              0
   Accrued interest - related parties (Notes 1 and 2)          42,757          9,585
   Accrued wages - officers (Notes 1 and 2)                   282,877        170,377
   Other accrued liabilities                                   42,065         46,762
                                                            ---------      ---------
            Total current liabilities                     $   805,317    $   446,954
LONG TERM LIABILITIES:
   Loans payable to related parties (Notes 1,2 and 7)     $ 1,424,240      1,387,954
                                                            ---------      ---------
            Total long term liabilities                   $ 1,424,240    $ 1,387,954
                                                            ---------      ---------
     Total liabilities                                    $ 2,229,557    $ 1,834,908
SHAREHOLDERS' EQUITY:
   Preferred stock - no par value, 0%, Non-cumulative,
    non-participating, convertible
     10,000,000 shares authorized, issued and outstanding $   100,000    $   100,000
   Common stock - no par value, 40,000,000 shares
     authorized 22,626,355 shares issued and outstanding
      of which 74,760 shares are in treasury                  216,487        216,380
   Additional Paid-in Capital                               6,046,693      5,921,250
   Deficit accumulated during the development stage        (7,704,165)    (7,148,019)
                                                           ----------      ---------
     Total equity                                         $(1,340,985)   $  (910,389)
                                                           ----------      ---------
     Total liabilities and equity                         $   888,572    $   924,519
                                                           ----------      ---------
</TABLE>

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

<PAGE>

                               PVAXX CORPORATION
                        (A Development Stage Company)
                    CONSOLIDATED STATEMENTS of OPERATIONS

<TABLE>
<CAPTION>

                                                2002           2001    From Inception
                                            3 months       3 months    (March 16,2000)
                                               ended          ended     thru' Sept 30
                                             Sept 30        Sept 30              2002
                                          (Unaudited)    (Unaudited)       (Unaudited)

<S>                                     <C>           <C>               <C>
SALES                                   $      2,699  $       3,091      $     24,558
                                         -----------   ------------       -----------
   Cost of Goods Sold and
        Other Operating Charges         $          -  $           -      $          -
   Research and Development Costs            191,307        257,111         1,888,057
   Selling, General and
        Administrative Costs                 254,282        272,937         3,104,706
   Stock Compensation Costs
    (Notes 1 and 2)                                0              0         1,729,371
   Depreciation and Amortization              37,342         40,053           469,152
                                         -----------    -----------       -----------
     Total Costs                        $    482,931   $    570,101      $  7,191,286
                                         -----------    -----------       -----------
Operating (loss)                        $   (480,232)  $   (567,010)     $ (7,166,728)
OTHER INCOME/(EXPENSE)
   Interest                                  (32,862)       (33,875)         (445,172)
   Currency re-measurement (loss)            (43,052)       (86,678)          (92,265)
                                         -----------    -----------       -----------
Net (Loss)                              $   (556,146)  $   (687,563)       (7,704,165)
INCOME TAXES                                       -              -                 -
                                         -----------    -----------       -----------
Net loss accumulated during the
 development stage                      $   (556,146)  $   (687,563)     $ (7,704,165)
                                         -----------    -----------       -----------
PER SHARE INFORMATION (Note 6)
   Weighted average number of
    common shares outstanding             22,626,355     21,322,800        21,415,653
                                          ----------     ----------        ----------
Basic & Diluted (loss) per share        $      (0.02)  $      (0.03)     $      (0.36)
                                          ----------     ----------        ----------

</TABLE>

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

<PAGE>

                              PVAXX CORPORATION
                       (A Development Stage Company)
    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY/(DEFICIT)

<TABLE>
<CAPTION>

                                  Shares Issued
                             ----------------------
                                                                             Additional  Retained
                             Common      Preferred     Common     Preferred  Paid-in     Earnings
                             Stock       Stock         Stock      Stock      Capital                Equity
                             ----------  ----------    --------   --------   ---------  ---------   ---------

<S>                         <C>         <C>           <C>        <C>        <C>         <C>        <C>
Acquisition of subsidiary
 corporations by PVAXX
 Issuance of stock to
 Founder (March 29,2000)     20,000,000  10,000,000   $ 200,000  $ 100,000  $ (291,386)  $     -       $8,614
Buy-back of common stock to
 facilitate private
 placements (Note 2)           (134,832)          -      (1,348)         -       1,348         -            -
Issuance of common stock
 for cash restricted by
 investor (April 4,2000)         90,000           -         900          -     299,070         -      299,970
Reverse acquisition of
 Oak Brook Capital IV
 (May 19,2000)                1,322,800           -       4,200          -      (4,200)        -            -
Issuance of common stock
 for cash (May 30,2000)          44,832           -         448          -     156,124         -      156,572
Net loss for the period               -           -           -          -           -  (349,107)    (349,107)
                             ----------  ----------     --------  --------   ---------  ---------   ---------
Balance June 30,2000         21,322,800  10,000,000     204,200    100,000     160,956  (349,107)     116,049

Buy back of common stock to
 facilitate private
 placements (Note 2)            (12,945)          -        (129)         -         129         -           -
Issuance of common stock
 for cash                        12,945           -         129          -      78,639         -       78,768
Net loss for the year
 ended June 30,2001                   -           -           -          -           - (2,151,933) (2,151,933)
                             ----------  ----------     --------  --------   ---------  ---------   ---------
Balance June 30,2001         21,322,800  10,000,000     204,200    100,000     239,724 (2,501,040) (1,957,116)

Issuance of common stock
 for cash                       119,858           -       1,199          -   1,039,811          -   1,041,010
Stock issued to President
 in lieu of accrued salary
 and interest thereon
 (Note 2)                       118,608           -       1,186          -   1,422,109          -   1,423,295
Stock issued to President
 for reduction in future salary
 entitlement (Note 2)            51,373           -         514          -     615,966          -     616,480
Stock issued to shareholder
 in settlement of interest
 accrued and reduction of loan
 (Note 2)                       150,000           -       1,500          -   1,798,500          -   1,800,000
Stock issued in compensation
 for services                   720,159           -       7,201          -   1,105,690          -   1,112,891
Stock issued to majority
 shareholders for stock
 surrendered to enable private
 sales (Note 2)                 148,057           -       1,480          -      (1,480)         -           -
Ending of escrow arrangements -
 stock returned to Treasury     (90,000)                   (900)         -    (299,070)         -    (299,970)
Net loss for the year
 ended June 30,2002                   -           -           -          -           - (4,646,979) (4,646,979)
                             ----------  ----------     --------  --------   ---------  ---------   ---------
Balance June 30,2002         22,540,855  10,000,000      216,380   100,000   5,921,250 (7,148,019)   (910,389)

Issuance of common stock
 for cash                        10,740           -          107         -     125,443          -     125,550
Net loss for the period
 ended September 30, 2002             -           -           -          -           -   (556,146)   (556,146)
                             ----------  ----------    --------  --------- ----------- ----------   ----------
Balance September 30, 2002   22,551,595  10,000,000   $ 216,487  $ 100,000  $6,046,693$(7,704,165)$(1,340,985)
                             ----------  ----------    --------  ---------  ----------  ---------- -----------
</TABLE>

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

<PAGE>

                               PVAXX CORPORATION
                        (A Development Stage Company)
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                             2002           2001   From Inception
                                                         3 months       3 months   (March 16,2000)
                                                            ended          ended    thru' Sept 30
                                                          Sept 30        Sept 30             2002
                                                       (Unaudited)    (Unaudited)      (Unaudited)

<S>                                                  <C>            <C>             <C>
CASH (USED) IN OPERATING ACTIVITIES:
  Net Loss                                           $   (556,146)  $   (687,563)    $ (7,704,165)
  Adjustments to reconcile net loss to net cash
   provided by / (used in) operating activities:
    Stock-based compensation
    - Employees                                      $          -   $          -     $  1,729,371
    - Accrued officer wages                                     -              -        1,300,000
    - Accrued interest                                          -              -          367,477
    Depreciation and amortization                          37,342         40,053          469,152
    Currency re-measurement adjustment on loan and
     capital lease obligations                             36,286         18,167          118,343
    (Increase)/Decrease in accounts receivable              2,498          2,266           (4,248)
    (Increase)/Decrease in VAT taxes receivable             3,981           (605)         (26,766)
    (Increase)/Decrease in inventories                    (15,679)             1          (42,572)
    (Increase)/Decrease in prepaid expenses                13,889          5,469          (47,512)
    (Increase)/Decrease in other assets                         -              -           (4,349)
    Increase/(Decrease) in accounts payable               (19,494)         1,881          199,504
    Increase/(Decrease) in accrued interest                33,172         30,922           42,757
    Increase/(Decrease) in accrued liabilities             (4,697)       (18,536)          27,011
    Increase/(Decrease)in accrued officer wages           112,500        183,577          282,877
                                                       -----------    -----------     -----------
 Net cash provided by/(used in) operating
  activities                                          $  (356,348)  $   (424,368)    $ (3,293,120)

INVESTING ACTIVITIES:
    Purchase of equipment                                   1,642        (24,628)      (1,031,538)
    Acquisition of patents & trademarks                    (8,288)       (12,736)        (119,708)
                                                       -----------   -----------      -----------
 Cash (used in) investing activities                  $    (6,646)  $    (37,364)    $ (1,151,246)

CASH PROVIDED BY FINANCING ACTIVITIES:
    Proceeds from sale of common stock                    125,550        135,141        1,701,870
    Cash returned to investor                                   -              -         (299,970)
    Related party loan received: Stock based compensation       -              -        1,555,818
    Increase in loans by related party                    224,510        387,887        1,563,334
    Capital element of capital lease payments                (726)       (32,371)          (7,065)
    Currency re-measurement adjustment on lease and
     loan obligations                                           -              -          (82,719)
                                                       -----------    -----------     -----------
 Cash provided by financing activities                $   349,334    $   490,657     $  4,431,268
                                                       -----------    -----------     -----------

Increase/(Decrease) Cash and Cash Equivalents             (13,660)        28,925          (13,098)
Cash at beginning of period                                   562          6,019                0
                                                       -----------    -----------     -----------
Cash at end of period                                 $   (13,098)    $   34,944     $    (13,098)
                                                       -----------    -----------     -----------
Supplemental information:
    Interest paid                                     $       516    $     2,953     $     29,441
    Income tax paid                                   $         -    $         -     $          -
Non-cash transactions
    Stock-based compensation
    - Employees                                       $         -    $         -     $  1,729,371
    - Accrued officer wages                           $         -    $         -     $  1,300,000
    - Accrued interest                                $         -    $         -     $    367,477

    Acquisition of patents for stock                  $         -    $         -     $    (68,018)

</TABLE>

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

<PAGE>

                               PVAXX CORPORATION
                        (A Development Stage Company)
                        NOTES TO FINANCIAL STATEMENTS
                           AS OF SEPTEMBER 30, 2002

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

History of the Reporting Entity

PVAXX Corporation, formed in Florida on March 16, 2000, is the parent
corporation of PVAXX Technologies Ltd., PVAXX Research & Development Ltd. and
PVAXX (Europe) Ltd. PVAXX Corporation acquired the net business assets of
PVAXX Technologies Ltd. and PVAXX Research & Development Ltd. in exchange for
10,000,000 shares of its Preferred and 20,000,000 shares of its Common stock.
The net business assets consisted of the costs of two patent applications
described below, current liabilities, and a leased vehicle.

This transaction was accounted for as a combination of entities under common
control and was recorded at the historical cost of the assets and liabilities.
The PVAXX companies were owned and controlled by a company owned and
controlled by the acquiring Company's President and Chairman of the Board of
Directors. The only activities of any of these companies to date have been
development stage activities.

The role of each of the subsidiary companies is as follows:
* PVAXX Technologies Ltd. is the holder of unlimited rights to manufacture,
  process, and sell poly vinyl alcohol products governed by patents issued
  under International Publication Numbers WO 98/26911 on June 25, 1998, WO
  00/12615 on March 9, 2000, and WO 01/64421 on September 7, 2001.
* PVAXX Research and Development Ltd. performs research into product
  improvements and applications. Doing business as PVAXX Engineering, it
  produces machines forming the product into pellets, which are then sold to
  converters. Under the trade style PVAXX "SoftCap" Systems it plans to
  manufacture and sell capsule making machinery.
* PVAXX (Europe) Ltd. is a dormant company.

Oak Brook Capital IV, (Oakbrook IV) was formed in May 1998 in Colorado, with
40,000,000 shares of common and 10,000,000 shares of preferred stock
authorized. It was registered with the Securities and Exchange Commission as
one of a series of blank check companies seeking a business combination with
an operating company. On May 19, 2000, Oakbrook IV entered into a share
exchange agreement with PVAXX Corporation, a development stage company. The
transaction is reported herein as a reverse acquisition with PVAXX as the
accounting acquirer and Oakbrook IV as the legal survivor. At the time of the
acquisition Oakbrook IV had 1,322,800 shares outstanding, had no assets, had
recognized no revenue, and had incurred expenses of $4,200.

In conjunction with the reverse acquisition, Oakbrook IV changed its name to
PVAXX Corporation, and the newly named PVAXX Corporation and all of the
subsidiaries have changed their respective fiscal year-ends to June 30.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Item 310(b) of Regulations SB. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three months
ended September 30, 2002, are not necessarily indicative of the results that
may be expected for the year ended June 30, 2003. The balance sheet at June
30, 2002 and the statement of operations for the period March 16, 2000
(inception) to June 30, 2002, have been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.

For further information, refer to the consolidated financial statements and
footnotes thereto included in the PVAXX Corporation and Subsidiaries annual
report on Form 10-KSB for the year ended June 30, 2002.

These financial statements represent the historical operations of PVAXX from
March 29, 2000, the date the Florida group was formed, and includes the
reverse acquisition of the Colorado corporation, Oak Brook Capital IV.

The statements have been prepared on a going concern basis. The ability of the
Company to emerge from the development stage and to develop into a going
concern is dependent on the success of the Company in negotiating long-term
revenue contracts and acquiring additional equity capital. However, there can
be no assurance that the Company will be successful in accomplishing its
objectives. The financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going concern.

<PAGE>

In June 2002, the Company addressed the substantial doubt about its ability to
continue as a going concern by agreeing to issue stock to both the President
and majority shareholder, in compensation for accrued salary, interest, and
loans made to the Company. In addition, shares were issued to the President as
a result of his agreement to reduce his contractual salary entitlement. The
majority shareholder also agreed to convert the plant & equipment lease (due
to be settled by April 2003) into a loan. The loans, payable to the majority
shareholder at that time, were aggregated and are now due for payment on May
31, 2005. Interest thereon, currently 8.5%, is payable quarterly in arrears.
Certain directors and employees agreed to accept part of their remuneration in
the form of shares.

In view of the Company's financial condition at August 31, 2002, the majority
shareholder agreed to defer payment of the interest accrued and payable at
that time. In addition, the majority shareholder agreed to make further loans
to the Company. Such loans are repayable on demand

On May 10, 2002, the Securities and Exchange Commission declared that the
Company had filed an effective registration statement (Form SB-2, Amendment
number 9) enabling the Company to offer its shares to the public. The Company
now has authority to issue up to 1,200,000 shares for cash in order to
generate additional working capital enabling the Company to expand its
operations and to bring its product to market.

Foreign Currency Translation

The U.S. dollar is the functional currency of all of the Company's worldwide
operations. All foreign currency asset and liability amounts are re-measured
into U.S. dollars at end-of-period exchange rates, except for inventories,
property, plant and equipment, and intangible assets, which are re-measured at
historical rates. Foreign currency income and expenses are re-measured at
average exchange rates in effect during the year, except for expenses related
to balance sheet amounts re-measured at historical exchange rates. Exchange
gains and losses arising from re-measurement of foreign currency-denominated
monetary assets and liabilities are included in income in the period in which
they occur.

Use of Estimates

The process of preparing financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reporting of 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. Significant estimates required to be made by management
include the valuation of stock issued for services and the realisability of
long-lived assets. Actual results could differ from these estimates. These
interim financial statements include all adjustments which in the opinion of
management are necessary in order to make the financial statements not
misleading.

Cash and Cash Equivalents

Highly liquid assets with a maturity date of three (3) months or less from the
date of acquisition are treated as cash or cash equivalents.

Inventory

Inventories consist of raw materials and are stated at the lower of cost
(first-in, first-out) or market value.

Value Added Tax (VAT)

The United Kingdom subsidiaries are required to receive VAT (Value Added Tax)
from appropriate customers and are required to pay VAT on purchases made from
certain vendors. The net amount of the tax is either payable to, or receivable
from, the Government. The Company currently receives a tax refund for the VAT
paid to various vendors.

Long-lived Assets

Long-Lived Assets, which include property, plant and equipment, and patents &
trademarks, are evaluated for impairment when events or changes in
circumstances indicate that the carrying amounts of the assets may not be
recoverable through the estimated undiscounted future cash flows resulting
from the use of these assets. When any such impairment exists, the related
assets are written down to fair value.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Estimated useful lives of property, plant and
equipment are as follows:

<PAGE>

Machinery & equipment                                    3 to 7 years
Office furniture & equipment                             3 to 5 years
Motor vehicles                                                4 years

The amortization of leasehold property improvements is based on the shorter of
the primary lease term or the life of the improvement.

Betterments and large renewals, which extend the life of an asset, are
capitalized whereas maintenance and repairs and small renewals are expensed as
incurred.

Intangibles

The patents were acquired from a related party in exchange for stock in the
PVAXX group of companies. Intangible assets such as patents or other
intellectual property are recorded at cost. These costs are the fees and
expenses of patent and trademark attorneys and agents incurred in applying for
such protection. Such intangible assets are amortized over their estimated
useful lives based on the nature of the item. The Company will begin
amortizing its patents when it emerges from the development stage.

The Company has generated a small amount of revenue relating to its patents
during its development stage operations. Although there is substantial doubt
about the Company's ability to continue as a going concern as described under
Basis of presentation above, the Company has recently acquired the patents and
it is actively engaged in promoting and developing this technology.

Management believe, that, at this time there are no events and conditions that
exist to indicate that the asset may be impaired. However, should the
Company's efforts to negotiate long-term revenue contracts for its products be
unsuccessful, the Company may realize an impairment loss on the write-down of
the patent to its fair value.

Research and Development

Research and development expenditure is written off in the period in which the
expenditure is incurred.

Income Taxes

The Company uses the asset and liability method as identified in Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes. The
consolidated Company has a net operating loss carry-forward (NOL) of
approximately $7,704,000 (2001: $3,188,000) of which $5,975,000 (U.S.
$3,226,000; U.K. $2,749,000) is considered available to future periods due to
losses generated since its inception through September 30, 2002. The U.S. net
operating losses and credits expire at various dates through 2021. This NOL
would result in the recording of a tax asset based on application of
appropriate UK and US tax rates if offsetting profits were anticipated.
Because the Company and its subsidiaries are in the development stages, there
is no assurance that future operations will generate a profit or income,
therefore the Company recognizes a valuation adjustment which completely
offsets the deferred tax asset related to the net operating loss
carry-forward.

Convertible Preferred Stock

The Company issued convertible preferred stock relating to the formation
transaction discussed above and in Note 2. The preferred stock does not have
voting rights, and is non-cumulative, non-participating and has preference up
to its par value upon liquidation. With the specific exclusion of the Jumik
Investments Inc (the current holder) the stock may be converted 1 for 1 for
common stock at the discretion of holder.

Revenue Recognition

The Company will recognize revenue when the earnings process is complete. This
will occur when products are shipped to the customer in accordance with the
terms of the agreement, title and risk of loss have transferred,
collectibility is probable, and pricing is fixed and determinable.

NOTE 2 - RELATED PARTY TRANSACTIONS

As discussed in Note 1, the Company effectively acquired PVAXX Technologies
Ltd. and PVAXX Research and Development Ltd. from a company owned and
controlled by the President and Chairman of the Board of Directors of PVAXX
Corporation. The ultimate consideration for the transaction is the 10,000,000
shares of Preferred stock and 20,000,000 shares of Common stock held by the
majority shareholder and others whose PVAXX Florida corporation shares were
exchanged.

The patent rights owned by PVAXX Technologies Ltd., were developed by and
acquired from a company owned by the President and majority shareholder and
are carried at their original historical cost of $68,018 plus subsequent costs
incurred together totaling $187,726 (2001: $159,389).

<PAGE>

On June 5, 2002, the Company agreed to issue stock, at $12 per share (the
price which recent sales of shares had realised), to both the President and
majority shareholder, in compensation for accrued salary, interest, and loans
made to the company. In addition, shares have been issued to the President as
a result of his agreement to reduce his contractual salary entitlement. The
amounts concerned were as follows:

President's salary
- Contractual entitlement to May 31, 2002                        1,300,000
- Interest thereon at 8%                                           123,295
                                                              ------------
- Total                                                        $ 1,423,295
                                                              ------------
- Shares issued at $12 per share                                   118,608
                                                              ------------
- Reducing annual salary to $450,000 from $600,000
- Salary foregone (5 years)                                    $   750,000
                                                              ------------
- Present value based on an 8% discount factor                 $   616,480
                                                              ------------
- Shares issued at $12 per share                                    51,373
                                                              ------------
Shareholder loan
- Interest accrued to May 31, 2002                                 244,182
- Loan principal                                                 1,555,818
                                                              ------------
- Total                                                        $ 1,800,000
                                                              ------------
- Shares issued at $12 per share                                   150,000
                                                              ------------

On June 5, 2002, the Company and the principal shareholder agreed to cancel
the three year equipment lease, dated May 1, 2000 (due to be settled by April
2003), and convert the present value thereof, $336,712, into a loan.
The loans then payable to the majority shareholder (denominated in sterling),
were aggregated and are now due for payment on May 31, 2005. Interest thereon,
currently 8.5%, is payable quarterly in arrears.

The Company issued 148,057 shares to the majority shareholder in compensation
for shares surrendered back to the Company to enable private sales during the
period from March 16, 2000 to June 30, 2001.

The Company entered into an Employment Agreement dated March 20, 2000 with its
President and Chairman of the Board of Directors. The Agreement is for a term
of five years and renewable by the Company. On June 5, 2002, it was agreed
that the salary payable under the Agreement should be reduced to $450, 000 per
annum.

Other compensation payable under the Agreement, remains as follows:
- a) Use of a motor vehicle at the choice of the employee;
- b) Use of residential facilities in the Fort Myers area at a rental not to
     exceed $36,000 per annum;
- c) The Company will establish a performance related share option program,
     under which the Company's board of directors will determine participation
     commensurate with the employee's position.  However, as of balance sheet
     date, the Company has not officially established a share option plan.
No payments have been made under the Agreement as of the date of the financial
statements. As discussed above, the salary accrued to May 31, 2002, was
settled by the issuance of stock. Salary due since that time, $150,000, has
been accrued.

NOTE 3 - RISKS AND UNCERTAINTIES

The Company's future operating results may be affected by a number of factors.
The ability of the Company to raise the capital necessary to continue to
develop and bring its products to market is not assured. The products being
developed by PVAXX will be sold in a highly competitive global market in which
it will need to demonstrate performance characteristics sought by customers,
at a competitive price which will yield a profit after production and
distribution costs. Estimates of the size of the market, and the Company's
eventual market share may not be realized, and the effect of competition
cannot be determined.

The Company seeks to protect its intellectual property rights by applying for
patents and registering its trademarks throughout the world. However there can
be no assurance that these will adequately protect the Company.

The Company is dependant on highly skilled personnel. The Company cannot
guarantee their continued service but seeks to mitigate the potential
financial loss caused by death by insuring the lives of its inventors for the
benefit of the Company.

<PAGE>

NOTE 4 - COMMITMENTS AND CONTINGENT LIABILITIES (see also Note 7)

Leased Facilities - Operating Leases

The Company has entered into a three (3) year operating lease for office space
in the Fort Myers area, Florida, U.S.A., with an unrelated party. Under the
terms of this lease, effective June 1, 2000 the Company is obligated for
monthly base rental amounts plus sales tax and Common Area Maintenance (CAM)
charges. Under the terms of the lease, the Company is obligated to keep and
maintain the leased premises, including fixtures and improvements, in good
condition. The Company has sub-let the property, with effect from November
2000, through to the end of the lease in May 2003, and the sub-tenant is
responsible for all costs until that time.

The Company's U.K. research and development facilities are based in a property
leased from an unrelated party. The lease, completed July 20, 2000, is for a
period of 20 years from March 25, 2000, with a break clause at the end of the
10th year. The rent payable is to be reviewed every 5 years. In addition to
the rental payments, the Company is obliged, at its own cost, to insure and
maintain the property.

Future minimum lease payments under non-cancelable operating leases are:
$100,986; $62,800; $62,800; $62,800; $62,800 for the 12 months ended September
30, 2003, 2004, 2005, 2006 and 2007 respectively, and $157,000 for subsequent
years.

Rental expense under operating leases was $29,820 in the three months ended
September 30, 2002 (2001: $25,411).

NOTE 5 - FAIR VALUES OF FINANCIAL INSTRUIMENTS

The carrying amounts reported in the consolidated balance sheet for cash and
cash equivalents, restricted cash, receivables, accounts payable, accrued
expenses and other liabilities, approximate fair value because of immediate or
short-term maturity of these financial instruments. The underlying carrying
amount reported for long-term debt and capital leases approximates fair value
because, in general, the interest on the underlying instruments fluctuates
with market rates.

NOTE 6 - LOSS PER SHARE

Basic net loss per common share is based on the weighted average number of
common shares outstanding during each period presented. Convertible securities
are included as common stock equivalents only when dilutive. Potential common
stock equivalents totaling 10,000,000 shares have been excluded from dilutive
loss per share as the effects of such shares would have been anti-dilutive.

NOTE 7 - LONG TERM LIABILITIES AND CAPITAL LEASES

On June 5, 2002, the three-year capital lease dated May 1, 2000 with the
majority shareholder, a company owned and controlled by the President and
Chairman of the Board of Directors, was cancelled and the present value
converted into a loan. Ownership of the machinery, equipment, and office
furniture passed to PVAXX.

The loans payable to the majority shareholder (which are denominated in
sterling) were aggregated. It was agreed that a value of $1,800,000,
representing the interest accrued to May 31, 2002, and a portion of the
outstanding principal, should be settled by conversion into stock using a
price of $12 per share (the price at which recent sales of shares had been
made). The remainder of the loan was converted into a Senior Secured
Promissory Note due May 31, 2005. Interest is payable quarterly in arrears at
8.5% currently. The amounts are sterling based and are subject to currency
re-measurement.

The transactions may be presented as follows:

<TABLE>
<CAPTION>


                                                   Principal        Interest         Total

<S>                                               <C>              <C>            <C>

Short term loans as at May 31, 2002               $2,543,559       $ 244,182      $ 2,787,741
Conversion of capital lease as at May 31, 2002       336,712               -          336,712
150,000 shares at $12 per share                   (1,555,818)       (244,182)      (1,800,000)
                                                 ------------      ----------     ------------
8.5% Senior Secured Promissory Note due
May 31, 2005 as at May 31, 2002                    1,324,453               -        1,324,453
Currency re-measurement to $1.53                      63,501               -           63,501
                                                 ------------      ----------     ------------
Balance as at June 30, 2002                      $ 1,387,954               -      $ 1,387,954
                                                 ------------      ----------     ------------

</TABLE>

Currency re-measurement as at September 30, 2002, has increased the value of
the loan by $36,286 to $1,424,240

The automobile capital lease is with an unrelated party. Depreciation expense
for leased assets is included in depreciation expense for owned assets (see
Note 8).

<PAGE>

The gross amounts of assets recorded under capital leases are listed in Note 8
at currency rates in effect at the time of the transactions.

Minimum future lease payments and present values of the net minimum lease
payments, at September 30, 2002 exchange rates, are as follows:

                                             Third Party

12 months ended September 30, 2003                   643
      Less: Imputed interest                        (137)

                                                  -------
Present value of net minimum lease payments       $  506
                                                  -------

Current                                           $  506
                                                  ------

PVAXX Corporation is the guarantor of this lease.

NOTE 8 - PROPERTY, PLANT & EQUIPMENT

<TABLE>
<CAPTION>

                                                 Total         Leased       Purchased
<S>                                           <C>            <C>           <C>
September 30, 2002
Leasehold property improvements                  41,389        41,389              -
Machinery & equipment                           787,534             -        787,534
Office furniture & equipment                     66,828             -         66,828
Motor vehicles                                   12,775        12,775              -
                                              ---------      --------      ---------

Cost                                            908,526        54,164        854,362
Less: Accumulated depreciation                 (334,430)      (16,943)      (317,487)
                                              ---------      --------      ---------

Net book value                                $ 574,096      $ 37,221      $ 536,875
                                              ---------      --------      ---------

</TABLE>

NOTE 9 - INCOME TAXES

The estimated tax benefits of the net operating loss carried forward (sourced
from both US and UK operations), and valuation allowance made, are as
follows:

                                                        Tax asset
September 30, 2002
Net operating loss                                    $ 1,957,000
Valuation allowance                                    (1,957,000)
                                                      ------------
Balance at September 30, 2002                         $         -
                                                      ------------

Note: No tax deduction is available for the stock-based compensation costs.

<PAGE>


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

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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS PERIOD ENDING SEPTEMBER 30, 2002

Except for historical information, the discussion in this Form 10-QSB contains
forward-looking statements that involve risks and uncertainties. These
statements may refer to the Company's future plans, objectives, expectations
and intentions. These statements may be identified by the use of words such as
expect, anticipate, believe, intend, plan and similar expressions. The
Company's actual results could differ materially from those anticipated in
such forward-looking statements. Factors that could contribute to these
differences include, but are not limited to, the risks summarized in the
section titled Market Risks and other Business Factors later in this Form
10-QSB.

Operations

The Company produces PVAXX(R), a polymer that may be used by various
manufacturers in producing agricultural, household, industrial, leisure and
medical market products. In addition, the Company is researching and
developing other environmentally neutral products for use in manufacturing
processes.

The Company and its President have spent the past several years developing
PVAXX(R) and related technology and the Company is now selling small
quantities of PVAXX(R) for evaluation by customers who could potentially order
significant quantities, operating in the following industries:
- Healthcare;
- Industrial;
- Retail;
- Household;
- Agricultural;
- Leisure.

At present, the Company does not intend to acquire or invest in any
complimentary businesses.

Period from inception to September 30, 2002.

The Company has accomplished the following during the period from inception on
March 16, 2000 to September 30, 2002:
- has opened a new research & development facility and European HQ in Kemble,
  UK;
- has sold small quantities of product to customers that could potentially
  order significant amounts of PVAXX(R) for use in manufacturing various
  products, currently made from plastic, in the industries listed above;
- has commenced a marketing program;
- has appointed several members of a management team for sales & marketing;
  production & engineering; and a Chief Financial Officer;
- has appointed PKF, Nottingham, England, as auditors;
- has appointed Nadeau & Simmons as corporate legal advisors;
- has registered the Company to do business in Dubai, United Arab Emirates,
  where it presently has an option to establish a manufacturing facility;
- has filed an SB2 Registration with the Securities and Exchange Commission
  which became effective on May 10, 2002.

During this period of time, the company has been financed by loan and lease
facilities, by its principal shareholder as well as the sale of equity.

On May 10, 2002, the Securities and Exchange Commission declared that the
Company had filed an effective registration statement (Form SB-2, Amendment
number 9) enabling the Company to offer its shares to the public. The Company
has authority to issue up to 1,200,000 shares for cash in order to expand its
operations and bring its products to market.

Effective May 31, 2002, the Company agreed to issue common stock to both the
President and majority shareholder, in compensation for accrued salary,
interest and loans made to the Company, amounting to over $3,223,000.
Concurrently, the majority shareholder agreed to convert its capital lease for
plant and equipment, which was due to be settled in full in April 2003, into a
loan. The residual loans, at that time, were aggregated and are now due for
payment on May 31, 2005. Interest thereon, currently 8.5%, is payable
quarterly in arrears. In addition 51,373 shares were issued to the President
as a result of his agreement to reduce his contractual salary entitlement to
$450,000 per annum (from $600,000).

<PAGE>

The next twelve months

The Company plans to develop its business model in order to maximize its
earnings potential. The Company's business model is based on its belief that
its strength is the invention of new products and processes to produce
materials which are not harmful to humans and their environment. Currently the
Company does not have the resources to manufacture large quantities of its
products. The Company believes that the best way to make large quantities of
its materials is to arrange for third party companies, with the resources,
such as the manufacturers of PVA, the bulk component of PVAXX(R) to
manufacture their own-label bicompostable products, under license from the
Company. Similarly, the Company plans to have its patented process equipment
manufactured under license from the Company.

A number of companies, both existing and potential customers, have expressed
an interest in using PVAXX(R) to make products that currently utilize plastic
materials. In order to plan operations more effectively, the Company is
endeavouring to obtain "memorandums of understanding" ("MOU"s) so as to
indicate both the timing of orders and the quantities envisaged. The Company
has been invited to tender for the supply of 2,250 tons per annum of PVAXX(R)
to produce water-soluble products. The Company is currently working with these
potential customers in order to specify the grade required. The Company is
using these potential orders in its discussions with PVA manufacturing
companies. One such company has expressed their interest in producing pellets
of the PVAXX(R) material. Similarly, a number of engineering companies have
expressed an interest in making the Company's tablet forming and pelletizing
equipment. As a result of these levels of interest, the Company has completed
the construction of its first commercial production pelletizer, capable of
producing 16,000 tons per annum.

The principal objective for the next twelve months is to have signed sales
contracts in place and commence production of large volumes of its products.
The Company is currently in negotiations with several companies, but no terms
have been finalized or otherwise agreed to. However, these negotiations are
still preliminary in nature. There can be absolutely no guarantee that any
contracts will materialize, nor that anything will result from these, or any
other negotiations.

If the Company is unsuccessful in persuading specialist manufacturing
companies to undertake large scale production, then the Company plans to
increase its own production facilities. In the event that the Company is
forced to shift its business plan from a licensing model to a manufacturing
model, the Company will inform its shareholders of the change through
Newsletters mailed to them, press releases, and, probably, the filing of Form
8-K. Additionally, the Company will file a post-effective amendment to its
Prospectus to reflect such a change.

Since inception

During the last 30 months, since inception, we have focused on the uses and
disposal of plastic. We have completed the necessary research and development
to establish several grades of our product which are suitable for the
manufacture of plastic film, extruded and molded plastic products. The Company
makes samples of finished products that potential customers can manufacture
using PVAXX(R). The company provides such product samples along with technical
specifications of PVAXX(R) to potential customers. Small quantities of
PVAXX(R) polymers are being shipped in pellet form in 50 Kilo drums and 20
kilo bags to various customers who have the potential to order significant
quantities. These shipments are purchased by the customer at market prices,
but are primarily used by the buyers to evaluate the functionality and
durability of PVAXX(R). Prospective customers are responsible for completing
their own trials and tests to determine whether PVAXX(R) will be suitable for
the manufacture of their products. However the company offers the technical
expertise of its officers and staff to customers to ensure proper evaluation.
These trials and tests take a number of months to complete particularly if the
customer wishes to ensure the life expectancy of the product, its
biodegradability and compostability. If suitable for the customer's process,
PVAXX(R) may be used to enable customers in a range of industries to make
products such as film, sheet, wrapping and packaging materials, fibers and
moldings that will have no toxic effects on the environment at an affordable
cost. This approach is expected to lead to the completion of memorandums of
understanding with major customers to indicate likely volumes and the timing
of these requirements.

The Company's current facilities are capable of producing about 16,000 tons
per annum. The company has taken an option to acquire land in Dubai, United
Arab Emirates, which could enable the company to construct additional
facilities to produce approximately 100,000 tons per annum. As investment will
be required to install facilities to enable production from this site, a
decision on whether to go ahead or not will depend on the outcome of the
Company's offering and discussions of other options, such as arranging for PVA
manufacturers to produce the Company's biocompostable materials.

Independent research has indicated that the potential market size for our
products could be 30 million tons per annum. Interest in our products from
around the world has been created by our marketing programme and indicates a
global demand which may become significant.

In order to exploit this opportunity as soon as possible, the company's
management believes that it should consider licensing the production of its
polymers. Consequently negotiations are currently taking place with a number
of PVA manufacturers to produce biodegradable polymers from the patented
compositions of ingredients that the company would sell licenses to them.
These companies should also be able to utilize their own world-wide
distribution partners to provide the geographical reach and market knowledge
necessary to ensure maximum exposure.

<PAGE>

The company is currently working with Mitsui Plastics, a major international
distributor, evaluating opportunities for its products in the U.S.A., which is
seen by Management as a significant potential market. If substantial contracts
could be obtained, this would provide a greater incentive to PVA manufacturers
to commence production. The Company has signed an agreement with a small
specialist UK distributor to help exploit the UK market.

We anticipate a proportion of the initial sales to customers will be to the
Italian market, where new legislation to ban a number of plastic applications
is currently in the implementation phase. We are currently working with a
development partner in this market for whom we have successfully made a stick
for their use in making a healthcare product. Working with a development
partner in each market sector (i.e. healthcare, agriculture, etc.) is viewed
as another way to exploit our product's potential as soon as possible. The
company is currently working with a number of potential customers who could
receive products produced from the first large deliveries of PVAXX(R). The
healthcare sector is being developed over the mid-term and will offer
higher-margin opportunities.

In addition the Company is considering the manufacture of its patented
pellet-forming machinery under license by specialist engineering companies in
order that greater quantities of our products could be produced more quickly.
The Company is currently in discussions with a company for this purpose.

Overhead and Operating Expenses

Currently we do not expect our present levels of administration expense (about
$300,000 per quarter), nor our research and development activities (which cost
about $250,000 per quarter) to increase significantly. Further increases in
costs will be determined by increasing production activities.

Liquidity and Capital Resources

The Company remains in the development stage. Since inception, the Company has
raised over $1,472,000 from the sale of common stock, and has obtained loans
from its principal shareholder. On June 5, 2002, the Company agreed with both
its President and majority shareholder to issue stock in settlement of
approximately $3,223,000 of accrued salary, interest and loans that were
outstanding as at May 31, 2002. The capital lease with the majority
shareholder, which was due for full settlement by April 2003, was converted
into a loan. This together with the balance of the existing loans, which were
due on demand, have been rolled up into a loan which is now scheduled for
payment on May 31, 2005. Following the SEC's declaration that the Company had
filed an effective registration statement, the Company is now in the process
of selling up to 1,200,000 shares on a self-underwritten, no minimum basis for
a period of 360 days, and arranging for its shares to be quoted on a
recognized stock exchange. The Company's balance sheet as of September 30,
2002, reflects a total asset value of $888,572 in the form of property, plant
and equipment, and costs of applying for patent protection, together with a
current asset value of $122,401. Notwithstanding the steps taken by us to
raise additional capital, our immediate cash requirements are significant. We
cannot be sure that we will be able to successfully realize cash flow from
operations or that such cash flow will be sufficient. However, we believe that
our existing and anticipated capital resources will enable us to fund our
planned operations through fiscal 2003.

In addition, our annual and quarterly operating results may be affected by a
number of factors, including the following:
- our ability to manage inventories, shortages of components or labor;
- the degree of automation used in the assembly process;
- fluctuations in material costs and the mix of material costs versus labor;
- manufacturing and overhead costs
- price competition;
- the inability to pass on excess costs to customers;
- the timing of expenditures in anticipation of increased sales; and
- customer product delivery requirements.

Any one of these factors, or a combination thereof, could adversely affect
us.

The Company believes that obtaining $1,000,000 of net proceeds from the
current offering together with cash generated from planned operations will
permit it to continue meeting its working capital obligations and fund the
further development of its business for at least the next 12 months. There can
be no assurance that any additional financing will be available to the Company
on acceptable terms, or at all. If adequate funds are not available, the
Company may be required to delay, scale back or eliminate its research,
engineering and development or manufacturing programs or obtain funds through
arrangements with partners or others that may require the Company to
relinquish rights to certain of its technologies or potential products or
other assets. Accordingly, the inability to obtain such financing could have a
material adverse effect on the Company's business, financial condition and
results of operations. The Company does not have any material sources of
liquidity or off balance sheet arrangements or transactions with unconsolidated
entities.

<PAGE>

Evolving Industry Standards; Rapid Technological Changes

The Company's success in its business will depend in part upon its continued
ability to enhance its existing products, to introduce new products quickly
and cost effectively to meet evolving customer needs, to achieve market
acceptance for new product offerings and to respond to emerging industry
standards and other technological changes. There can be no assurance that the
Company will be able to respond effectively to technological changes or new
industry standards. Moreover, there can be no assurance that competitors of
the Company will not develop competitive products, or that any such
competitive products will not have an adverse effect upon the Company's
operating results.

There can also be no assurance that the Company will be successful in
refining, enhancing and developing its operating strategies and products going
forward, that the costs associated with refining, enhancing and developing
such strategies and products will not increase significantly in future periods
or that the Company's existing technology will not become obsolete as a result
of ongoing technological developments in the marketplace.

Volatility of Stock Price

The Company believes factors such as the Company's liquidity and financial
resources, quarter to quarter and year-to-year variations in financial results
could cause the market price of the Company's common stock to fluctuate
substantially. Any adverse announcement with respect to such matters or any
shortfall in revenue or earnings from levels expected by management could have
an immediate and material adverse effect on the trading price of the Company's
common stock in any given period. As a result, the market for the Company's
common stock may experience material adverse price and volume fluctuations and
an investment in the Company's common stock is not suitable for any investor
who is unwilling to assume the risk associated with any such price and volume
fluctuations. As a consequence this may inhibit the Company's ability to raise
additional finance, if required.

Sufficiency of Cash Flows

The Company believes that current cash balances and any cash generated from
operations and from available debt or equity financing will be sufficient to
meet its cash needs for working capital and capital expenditures for at least
the next twelve months provided at least $1,000,000 of net proceeds is raised
in the current offering. Thereafter, if cash generated from operations is
insufficient to satisfy the Company's liquidity requirements, management may
seek to sell additional equity or obtain credit facilities. The sale of
additional equity could result in additional dilution to the Company's
shareholders.

Results of Operations

Although we have yet to realize significant revenues from our planned
operations, sales of small quantities of product, for trialing and testing
purposes, have resulted in revenues of $2,699 being received by the Company
for the three months ended September 30, 2002 ($24,558 since inception).

Income Taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes
issued by the Financial Accounting Standards Board, under which deferred tax
assets and liabilities are provided on differences between the carrying
amounts for financial reporting and the tax basis of assets and liabilities
for income tax purposes using the enacted tax rates. Under SFAS 109, deferred
tax assets may be recognized for temporary differences that will result in
deductible amounts in future periods. A valuation allowance is recognized if
on the weight of available evidence it is more likely than not that some
portion or the entire deferred tax asset will not be realized. Consequently
the Company has not recorded an asset on its balance sheet to recognize the
tax benefit of its losses since inception.

MARKET RISKS AND OTHER BUSINESS FACTORS

In passing the Private Securities Litigation Reform Act of 1995 (the Reform
Act), Congress encouraged public companies to make forward looking statements
by creating a safe harbor to protect companies from securities law liability
in connection with forward looking statements. We intend to qualify both our
written and oral forward looking statements for protection under the Reform
Act and any other similar safe harbor provisions.

Generally, forward looking statements include expressed expectations of future
events and the assumptions on which the expressed expectations are based. All
forward looking statements are inherently uncertain as they are based on
various expectations and assumptions concerning future events and they are
subject to numerous known and unknown risks and uncertainties which could
cause actual events or results to differ materially from those projected.

Due to those uncertainties and risks, the investment community is urged not to
place undue reliance on our written or oral forward looking statements. We
undertake no obligation to update or revise our for forward looking statements
to reflect future developments. In addition, we undertake no obligation to
update or revise forward looking statements to reflect changed assumptions,
the occurrence of unanticipated events or changes to future operating results
over time.

<PAGE>

Risk Factors

In summary, risks faced by the company (which are fully discussed in the
Company's current SB-2 Registration Statement) include:
Technological uncertainty and Lack of market acceptance;
Competition;
Dependence on Key Personnel;
Dependence on Patents, Trademarks and Proprietary Information;
Limited Operating History;
Potential Fluctuations in Quarterly Operating Results;
International distribution inexperience;
Foreign currency management inexperience;
Relationships with foreign producers;
Indemnification of Officers and Directors;
Possible Need for Additional Financing;
Possible impact of Demand Notes;
Control by Principal Shareholders, Officers and Directors;
Issuance of Preferred Stock;
Trading Market;
Volatility of Stock Price;
Potential impact of Selling Shareholders on Company's Primary Offering;
Stock market regulation

                           PART II OTHER INFORMATION

ITEM 1. Legal Proceedings

Neither the Registrant nor any of its affiliates are a party, nor is any of
their property subject, to material pending legal proceedings or material
proceedings known to be contemplated by governmental authorities.

ITEM 2. Changes in Securities

None

ITEM 3. Defaults Upon Senior Securities

Interest accrued on the Senior Secured Promissory Note of L907,159.47
for the quarter ended August 31, 2002, was due for payment on the last banking
day of that month. In view of the Company's financial condition, the note
holder (the Company's principal shareholder) agreed to defer payment of the
L19,435 (about $30,500) for the time being.

ITEM 4. Submission of Matters to a Vote of Security Holders

None

ITEM 5. Other Information

None

ITEM 6. Exhibits and Reports on Form 8 K

(a) Exhibits

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

Exhibit No.                 Exhibit

#     2.10                  Agreement and Plan of Share Exchange
#     2.11                  Articles of Share Exchange
#     3(i)                  Articles of Incorporation
#     3(ii)                 Bylaws

<PAGE>

#     4(a)                  Agreements Defining Certain Rights of Shareholders
#     4(b)                  Specimen Stock Certificate

      9                     Not applicable

      10                    Material contracts

      11                    Not applicable

      13

#     16                    Letter on change in certifying accountant

      18                    Not applicable
      21                    Not applicable
      22                    Not applicable

#     23.1                  Consent of Counsel

#     99.1                  Safe Harbor Compliance Statement
____________________________
x     filed herewith

#     previously filed

(b)   Reports on Form 8 K

None


                                   SIGNATURES

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

PVAXX CORPORATION


/s/ H. Stevens

By: H. STEVENS
Title:  CEO

/s/ J Halliday

By: J HALLIDAY
Title:  CFO

Date: November 14, 2002