<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

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

                  For the fiscal year ended September 30, 2002.

                        Commission File Number 333-94135
                                               ---------

                               LORELEI CORPORATION
                               -------------------
                 (Name of Small Business Issuer in Its Charter)

       Delaware                                  13-4058469
  ----------------------                -------------------------
(State  of  Incorporation)             (IRS  Identification  Number)

63  Wall  Street,  Suite  1801  New  York,  NY     10005
----------------------------------------------     -----
(Address  of  principal  executive  offices)      (Zip  Code)

                    (212)  344-1600
                    ---------------
(Issuer's  telephone  number,  including  area  code)

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

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


     Check  whether  the  issuer:  (1) filed all reports required to be filed by
Section  13  or 15(d) of the Exchange Act 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___  No  X
          ---

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation S-B is not contained in this form, and no disclosure will 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.

     State  issuer's  revenues  for  its  most  recent  fiscal  year.   0
                                                                       --

     The  aggregate  market  value of the voting stock held by non-affiliates of
the  registrant  is  $1,000.

     As  of  September 30, 2002 there were 200,000 shares of the issuer's common
stock,  $.001  par  value  per  share,  issued  and  outstanding.


<PAGE>

                              LORELEI CORPORATION
                                     10-KSB
                               September 30, 2002

                                     PART I


ITEM  1.  DESCRIPTION  OF  BUSINESS

     Lorelei  Corporation  was organized under the laws of the State of Delaware
on  April  23,  1999.  Lorelei  was  formed  as  a  vehicle to pursue a Business
Combination.  Since inception, the primary activity of Lorelei has been directed
to  organizational efforts, obtaining initial financing, and efforts intended to
identify  possible  Business  Combinations.

     Lorelei  's  initial  public  offering  consists of 70,000 shares of common
stock  being  offered  at  a  purchase  price  of  $.50  per  share.

     Lorelei  was  organized for the purposes of creating a corporate vehicle to
seek,  investigate  and,  if  such  investigation warrants, engaging in business
combinations  presented  to it by persons or firms who or which desire to employ
Lorelei  's  funds  in  their  business  or  to seek the perceived advantages of
publicly-held  corporation.  Lorelei  's principal business objective is to seek
long-term growth potential in a business combination venture rather than to seek
immediate,  short-term  earnings.  Lorelei  has not restricted its search to any
specific  business,  industry  or  geographical  location.

     Lorelei  has  18  months  from its date of effectiveness (July 25, 2002) to
consummate  a  business  combination,  including  the filing of a post-effective
amendment  and  shareholder  reconfirmation offering.  If a consummated business
combination  has  not occurred by the date 18 months after the effective date of
the  initial  registration statement, the funds held in escrow shall be returned
by  first  class  mail to the purchasers within five (5) business days following
that  date.

     Lorelei  does not currently engage in any business activities which provide
any cash flowPersons who purchased shares in Lorelei 's initial public offering
and  other  shareholders  will  not  have  much  opportunity  to  participate in
identifying,  investigation  or  analyzing merger candidate.  Lorelei's proposed
business  is  sometimes referred to as a "blank check" company because investors
entrust  their  investment  monies  to  Lorelei's  management before they have a
chance  to  analyze  any  ultimate  use  to  which  their  money  may  be  put.
Substantially  all  of  Lorelei's  initial  public  offering  are intended to be
utilized  generally  to  effect  a  business  combination.  Rule 419 states that
prospective investors who invest in Lorelei will have an opportunity to evaluate
the specific merits or risks of only the business combination management decides
to  enter  into.

                                        2
<PAGE>

     Although  Lorelei is subject to regulation under the Securities Act of 1933
and  the  Securities  Exchange  Act  of 1934, management believes Lorelei is not
subject  to regulation under the Investment Company Act of 1940.  The regulatory
scope of the Investment Company Act of 1940, as amended, was enacted principally
for  the  purpose  of  regulatory vehicles for pooled investments in securities,
extends  generally  to  companies  primarily  in  the  business  of  investing,
reinvesting,  owning, holding or trading securities.  The Investment Company Act
may, however, also be deemed to be applicable to a Company which does not intend
to be characterized as an investment company but which, nevertheless, engages in
activities  which  may  be  deemed  to  be within the definition of the scope of
certain  provisions  of  the  Investment Company Act.  Lorelei believes that its
principle  activities  will  not  subject  it to regulation under the Investment
Company  Act.  Nevertheless, there can be no assurances that Lorelei will not be
deemed  to  be  an  Investment Company.  In the event Lorelei is deemed to be an
Investment  Company,  Lorelei may be subject to certain restrictions relating to
Lorelei's  activities,  including  restrictions on the nature of its investments
and  the  issuance  of  securities. Lorelei has obtained no formal determination
from  the  Securities  and Exchange Commission as to the status of Lorelei under
the  Investment  Company  Act  of  1940.

     Lorelei  presently  has  no  employees.

     Lorelei  is  currently  engaged in its initial public offering.  It has not
yet  begun  to  look  for  a  merger  candidate.

     Lorelei  intends  to  structure  any  future  merger in such a manner as to
minimize  federal  and state tax consequences to Lorelei and any target company.

Item  2.  PROPERTIES

     Lorelei  is  presently  using the offices of Schonfeld & Weinstein, L.L.P.,
counsel  to  Lorelei,  as  its  office.  Schonfeld  & Weinstein, L.L.P. does not
charge Lorelei for this service.  Such arrangement is expected to continue until
a  business combination is effected, including effectiveness of a post-effective
amendment  and  shareholder  reconfirmation.

     Lorelei  currently  owns no equipment, and does not intend to own any prior
to  engaging  in  a  business  combination.

Item  3.  LEGAL  PROCEEDINGS

     Lorelei  is  not presently a party to any litigation, nor, to the knowledge
of management, is any litigation threatened against Lorelei which may materially
affect  Lorelei.

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

     There  were  no  shareholders meetings in the fourth quarter of this fiscal
year.
                                        3
<PAGE>

Item  5.  MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED
          STOCKHOLDER  MATTERS

     There  is no established public trading market for Lorelei's common shares.
As  of December 31, 2002, there were 200,000 shares of common stock outstanding.
The  par  value  per  share is $.001.  Lorelei has not paid any dividends on its
common  stock  in  the  past,  nor  does it foresee paying dividends in the near
future.  Pursuant  to  its  initial  public offering, Lorelei is offering 70,000
shares  of  common  stock  at  $.50  per  share.

Item  6.  PLAN  OF  OPERATION

     Lorelei  does not currently engage in any business activities which provide
any  cash  flow.  Once  the initial public offering is sold, Lorelei may release
10%  of  the  proceeds  of  such  offering  to  the  company.

     Lorelei  may  seek  a  business combination in the form of firms which have
recently  commenced  operations,  are developing companies in need of additional
funds  for  expansion into new products or markets, are seeking to develop a new
product  or  service,  or  are  established businesses which may be experiencing
financial  or  operating difficulties and are in need of additional capital.   A
business  combination  may involve the acquisition of, or merger with, a company
which  does  not  need  substantial  additional  capital  but  which  desires to
establish  a  public  trading  market for its shares, while avoiding what it may
deem to be adverse consequences of undertaking a public offering itself, such as
time  delays,  significant  expense,  loss of voting control and compliance with
various  Federal  and  State  securities  laws.

     Lorelei  will  not  acquire  a target business unless the fair value of the
target  business  represents 80% of the maximum offering proceeds.  To determine
the  fair  market  value of a target business, Lorelei's management will examine
the  certified  financial statements (including balance sheets and statements of
cash  flow  and stockholders' equity) of any candidate and will participate in a
personal  inspection  of  any  potential  target  business.

     Based  upon  management's  experience  with  and  knowledge  of blank check
companies, the probable desire on the part of the owners of target businesses to
assume  voting  control  over  Lorelei  (to  avoid  tax  consequences or to have
complete  authority to manage the business) will almost assure that Lorelei will
combine  with  just  one target business.  Management also anticipates that upon
consummation  of  a  business  combination, there will be a change in control in
Lorelei which will most likely result in the resignation or removal of Lorelei's
present  officers  and  directors.

                                        4
<PAGE>

     Investors  should  note  that any merger or acquisition effected by Lorelei
can  be  expected  to  have  a  significant dilutive effect on the percentage of
shares  held  by  Lorelei's  then-shareholders,  including  purchasers  in  this
offering.  Upon  the consummation of a business combination, the target business
will have significantly more assets than Lorelei; therefore, management plans to
offer  a  controlling  interest in Lorelei to the target business.  Lorelei have
attempted  to structure the acquisition in a so-called "tax-free" reorganization
under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1954, as amended
(the  "Code").  In  order to obtain tax-free treatment under the Code, it may be
necessary  for  the  owners  of  the acquired business to own 80% or more of the
voting  stock  of  the  surviving  entity.  In  such  event, the shareholders of
Lorelei,  would retain less than 20% of the issued and outstanding shares of the
surviving entity, which would be likely to result in significant dilution in the
equity  of  such  shareholders.

     Management  anticipates  that  it  may be able to effect only one potential
business  combination,  due  primarily  to  Lorelei's  limited  financing.  As a
result,  Lorelei  will  not  be able to offset potential losses from one venture
against  gains  from  another.

     The  analysis  of  business combinations will be undertaken by the officers
and  directors  of  Lorelei, none of whom is a professional business analyst. In
analyzing  prospective business combinations, management considered such matters
as the available technical, financial, and managerial resources; working capital
and  other  financial  requirements; prospects for the future; nature of present
and  expected  competition;  the  quality  and experience of management services
which  may  be  available  and  the  depth of that management; the potential for
growth  or expansion; the potential for profit; the perceived public recognition
or  acceptance  or  products;  name  identification; and other relevant factors.

     Management will not actively negotiate or otherwise consent to the purchase
of any portion of their common stock as a condition to or in connection with any
proposed  merger.

     Lorelei  management believes that the securities to be issued in any merger
will  be  issued  in  reliance  on exemptions from registration under applicable
federal  and  state securities laws and that the terms of a merger will be based
upon  the  respective  needs and desires of Lorelei and the merger candidate and
relative  negotiating  strength  of  Lorelei  and  such  other  management.

     Lorelei  has  adopted  a  policy that it will not pay a finder's fee to any
member  of management for locating a merger or acquisition candidate.  No member
of  management  intends to or may seek and negotiate for the payment of finder's
fees.
                                        5

<PAGE>
                                    PART III

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

     The  officers  and directors of Lorelei, and further information concerning
them  are  as  follows:

Name(1)                     Age     Position
-------                     ---     --------



Jo-Ann  Vidaver  (1)         47     President,  Director
49  Poplar  Avenue
Oradell,  New  Jersey  07469

Patricia  Francill  (1)      50     Secretary,  Director
1000  Urlin  Avenue
Columbus,  Ohio  43212

Jules  Reich                 66     Director
202  Augusta  Court
Roslyn,  New  York  11576
____________________

(1)  May be deemed "Promoters" of the Lorelei, as that term is defined under the
Securities  Act  of  1933.

BIOGRAPHY

Jo-Ann  Vidaver,  President and a director of Lorelei, was a circulation manager
for  New  York City Magazine from 1976-1978 and for Games Magazine in 1978.  Ms.
Vidaver  was an assistant to the vice-president of special projects for Columbia
Artists  Management  from  1981-1983  and  was a traffic supervisor at RKO Radio
Networks  from  1984-1985.  She  served  WNCN  Radio  as  systems  manager  from
1978-1981,  and  from  1986-1993  and  has  been serving as a consultant to WQXR
Radio,  a  unit of the New York Times, since 1994.  In addditon, Ms. Vidaver has
managed  Auntie  Knits,  Inc.,  since 1997.  Ms. Vidaver is a graduate of Queens
College,  City  University  of  New  York.  Ms. Vidaver has been President and a
director  of  Lorelei  since  November  1999.

Patricia Francill, Secretary and a director of Lorelei, has been Treasurer and a
director  of  Centurion  Telecommunications Corp. since 1997. Prior to that, Ms.
Francill  was  President  of Centurion Broadcasting Systems Inc. from March 1994
until  November  1997.  Ms. Francill served as Secretary and Treasurer of Taylor
Equities,  Inc.,  a  blank  check  company, from January 26, 1990 to January 15,
1992.  She  was also a Credit Manager for the Department of Medicine, Ohio State

                                        6
<PAGE>

University  from 1981-1985 and served as Lead Kindergarten Latchkey Teacher from
1986-1994,  in  the  Grandview  Heights  School  District  Ms. Francill has been
Secretary  and  a  director  of  Lorelei  since  April  1999.

Jules  Reich, Director, has been an active member of the real estate and finance
industry  since  1962.  Since  1972,  Mr.  Reich has served as President of Live
Right  Realty  Inc.,  a  management  company that manages commercial, rental and
co-op  properties  throughout  the  New  York  area.  In  1979, Mr. Reich formed
Somerset Investors Corporation, a finance company that has been active in making
real  estate  loans  for  acquisition and refinance, as well as various types of
business  loans.  Since  1993, Mr. Reich's efforts have been concentrated on the
purchase  of non-performing underlying mortgages on co-op buildings and blocs of
condo and co-op units and the restructuring of the debt of co-op corporations in
exchange  for  the  original  sponsor's unsold share units on which the sponsors
defaulted.  As a result, Mr. Reich has acquired properties in Nassau and Suffolk
County,  Westchester  County  and  Kings and Queens County in New York City. Mr.
Reich  has  been  a  director  of  Lorelei  since  April  1999.

ITEM  10.  EXECUTIVE  COMPENSATION

     No  officer or director of Lorelei has received any cash remuneration since
Lorelei's  inception, and none received or accrued any remuneration from Lorelei
at the completion of the initial public offering.  No remuneration of any nature
has  been  paid  for  or  on  account of services rendered by a director in such
capacity.  None of the officers and directors intends to devote more than twenty
hours  per  month  to  Lorelei's  affairs.


ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
           MANAGEMENT

     The following table sets forth certain information regarding the beneficial
ownership  of Lorelei's Common Stock as of September 30, 2002 by (i) each person
who  is  known  by  Lorelei  to  own  beneficially  more  than  5%  of Lorelei's
outstanding  Common  Stock;  (ii)  each of Lorelei's officers and directors; and
(iii)  all  directors  and officers of Lorelei as a group.  It also includes the
percent  to  be  owned  before  and  after  Lorelei's  initial  public offering.

NAME/ADDRESS         SHARES  OF           PERCENT  OF         PERCENT  OF
BENEFICIAL         COMMON  STOCK          CLASS  OWNED        CLASS  OWNED
OWNER(1)          BENEFICIALLY  OWNED   BEFORE  OFFERING     AFTER OFFERING
--------------------------------------------------------------------------------


Jo-Ann  Vidaver           0                 0%                     0%
49  Poplar  Avenue
Oradell,  NJ  07469

Patricia  Francill      25,000             12.5%                 9.26%
1000  Urlin  Avenue
Columbus,  Ohio  43212



                                        7
<PAGE>
Jules  Reich                  50,000           25%              18.55%
202  Augusta  Court
Roslyn,  New  York  11576

Iris  Lai                     50,000           25%              18.55%
c/o  Arimoto,  Ogasawara  &
Mo  Co.
276  Fifth  Avenue
New  York,  NY  10001

Victor  Weinstein             25,000         12.5%               9.26%
280  Carol  Close
Tarrytown,  NY  10591

Schonfeld  &  Weinstein,
L.L.P.                        50,000           25%              18.55%
63  Wall  Street
Suite  1801
New  York,  NY  10005

Total  Officers
and  Directors  (3  Persons) 75,000          37.5%             27.78%

Total                       200,000           100%             74.07%

_____________

(1)Each shareholder has sole voting and investment power with respect to his/her
shares.

Jo-Ann  Vidaver, Patricia Francill, and Jules Reich may be deemed "Promoters" of
Lorelei,  as  that  term  is  defined  under  the  Securities  Act  of  1933.

Jo-Ann  Vidaver  was granted an option to purchase 10,000 shares of common stock
at  $.10 per share on November 12, 1999 by Lorelei. This option expired November
12,  2002.

Arimoto,  Ogasawara  &  Mo  Co.  is  a  consulting  firm  with no affiliation to
management. Iris Lai is a Hong Kong citizen. Due to a personal relationship with
a  principal  of  Arimoto, Ogasawara & Mo Co, Ms. Lai utilizes office space from
such  firm  when  she  is  in  the  United  States.

Victor  Weinstein is the father of Andrea I. Weinstein, a principal of Schonfeld
&  Weinstein,  L.L.P.  Schonfeld & Weinstein, L.L.P. is a stockholder of Lorelei
and  special  counsel  to  the  company.

                                        8

<PAGE>

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     There  are  no relationships or transactions required to be disclosed under
this  Item.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K






                                        9

<PAGE>

                                   SIGNATURES

     In  accordance  with  Section 13 or 15(d) of the Securities Exchange Act of
1934,  the  registrant  caused  this  report  to  be signed on its behalf by the
undersigned,  thereunto  duly  authorized.

                               LORELEI CORPORATION

By   Jo-Ann  Vidaver
JO-ANN  VIDAVER,  President

Date  January  16,  2003

     In accordance with the Securities Exchange Act of 1934 this report has been
signed  below  by  the  following persons on behalf of the registrant and in the
capacities  and  on  the  dates  indicated.


By   Jo-Ann  Vidaver
     JO-ANN  VIDAVER,  President,  Director

Date  January  16,  2003
                                               *  *  *
By   Patricia  Francill
     PATRICIA  FRANCILL,  Secretary,  Director

Date  January  16,  2003
                                               *  *  *
By
     JULES  REICH,  DIRECTOR

Date
                                               *  *  *

     Supplemental  Information  to  be  Furnished with Reports Filed Pursuant to
Section  15(d)  of  the  Act by Registrants Which Have Not Registered Securities
Pursuant  to  Section  12  of  the  Act.

     No  annual  report  or  proxy  material  has been sent to security holders.

                                       10
<PAGE>




                               LORELEI CORPORATION




                             INDEX
                             -----



                                                          PAGE

INDEPENDENT AUDITORS' REPORT                               F2

BALANCE SHEETS                                             F3

STATEMENTS OF OPERATIONS                                   F4

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY              F5

STATEMENTS OF CASH FLOWS                                   F6

NOTES TO FINANCIAL STATEMENTS                        F7 - F11



                                        F1

<PAGE>


KEMPISTY & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS, P.C.
---------------------------------------------------------------------------
15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX
(212) 513-1930


                             INDEPENDENT AUDITORS' REPORT

To the Stockholders of
Lorelei Corporation

We  have  audited  the  accompanying  balance sheets of Lorelei Corporation (the
"Company"),  a  development stage company, as of September 30, 2002 and 2001 and
the  related statements of operations, changes in stockholders' equity, and cash
flows  for  the  years  then  ended.  These  financial  statements  are  the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audit.


We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  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 Lorelei Corporation as of
September 30, 2002 and 2001 and the results of its operations and its cash flows
for  the  years  then  ended  in conformity with accounting principles generally
accepted  in  the  United  States  of  America.




Kempisty & Company
Certified Public Accountants PC
New York, New York
December 30, 2002

                                       F2
<PAGE>



                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                           September  30,        September  30,
                                                                2002                 2001
                                                                ----                 ----
                             ASSETS
<S>                                                      <C>                  <C>
  Deferred offering cost                                 $           15,000   $           15,000
                                                         -------------------  -------------------

            Total Assets                                 $           15,000   $           15,000
                                                         ===================  ===================

            LIABILITIES AND STOCKHOLDERS' EQUITY

  Accounts payable and accrued expenses                  $            6,719   $            3,719

  Stockholders' Equity
    Common stock, 20,000,000 shares authorized at $.001
      par value; issued and outstanding 200,000                         200                  200
    Additional paid-in capital                                       19,800               19,800
    Deficit accumulated during the development stage                (11,719)              (8,719)
                                                         -------------------  -------------------
            Stockholders' Equity                                      8,281               11,281
                                                         -------------------  -------------------
            Total Liabilities and Stockholders' Equity   $           15,000   $           15,000
                                                         ===================  ===================

</TABLE>


                        SEE NOTES TO FINANCIAL STATEMENTS

                                       F3
<PAGE>


                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                    For the period
                                                                                     April 23, 1999
                                                   For the year ended                    to
                                                      September 30,                  September 30,
                                               2002                   2001                  2002
                                               ----                   ----                  ----
<S>                                    <C>                    <C>                    <C>

  Revenue                              $                -     $                -     $              -

  General and administrative expenses                 3,000                  1,805               11,719
                                       ---------------------  ---------------------  -------------------

  Loss before income tax provision                   (3,000)                (1,805)             (11,719)

  Provision for income taxes                            -                      -                   -
                                       ---------------------  ---------------------  -------------------

  Net Loss                             $             (3,000)  $             (1,805)  $          (11,719)
                                       =====================  =====================  ===================

  Net loss per common share
    outstanding, basic and diluted     $              (0.02)  $              (0.01)
                                       =====================  =====================

  Weighted average shares outstanding               200,000                200,000
                                       =====================  =====================

</TABLE>

                       SEE NOTES TO FINANCIAL STATEMENTS.

                                       F4
<PAGE>



                               LORELEI CORPORATION
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM APRIL 23, 1999 (DATE OF INCORPORATION) THROUGH SEPTEMBER 30,
                                      2002
<TABLE>
<CAPTION>
                                                                          Deficit
                                                                        Accumulated
                                       Common Stock         Additional   during the
                                    ($0.001 par value)        Paid-in   Development
                                   Shares        Amount       Capital      Stage       Total
                                   ------        ------       -------      -----       -----
<S>                             <C>              <C>        <C>         <C>          <C>

Balance April 23, 1999                -        $    -       $     -     $      -      $     -

Sale of 200,000 shares of
  common stock                     200,000          200         19,800         -        20,000

Net loss                              -             -             -         (3,773)     (3,773)
                                 ----------    -----------  ----------- ------------  ----------

Balance September 30, 1999         200,000          200         19,800      (3,773)     16,227
Net loss                              -             -             -         (3,141)     (3,141)
                                 ----------    -----------  ----------- ------------  ----------

Balance September 30, 2000         200,000          200         19,800      (6,914)     13,086

Net loss                              -             -             -         (1,805)     (1,805)
                                 ----------    -----------  ----------- ------------  ----------

Balance September 30, 2001         200,000          200         19,800      (8,719)     11,281

Net loss                              -             -             -         (3,000)     (3,000)
                                 ----------    -----------  ----------- ------------  ----------

Balance September 30, 2002         200,000     $    200     $   19,800  $  (11,719)   $  8,281
                                 ==========    ===========  =========== ============  ==========


</TABLE>

                                      F-5
<PAGE>


                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                               For the period
                                                                               April 23,1999
                                                      For the year ended             to
                                                         September 30,         September 30,
                                                     2002           2001           2002
                                                     ----           ----           ----
<S>                                               <C>           <C>            <C>
  CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                           (3,000)  $     (1,805)  $   (11,719)
    Changes in operating assets and liabilities:
      Accounts payable and accrued expenses             3,000           1,805        6,719
                                                  ------------  -------------  ------------

  NET CASH USED BY OPERATING ACTIVITIES                   -              -          (5,000)

  CASH FLOWS FROM INVESTING ACTIVITY
    Deferred offering costs incurred                      -              -         (15,000)
                                                  ------------  -------------  ------------

  CASH USED BY INVESTING ACTIVITY                         -              -         (15,000)

  CASH FLOWS FROM FINANCING ACTIVITY
    Sales of common stock                                 -              -          20,000
                                                  ------------  -------------  ------------

  CASH PROVIDED BY FINANCING ACTIVITY                     -              -          20,000
                                                  ------------  -------------  ------------

  NET CHANGE IN CASH                                      -              -            -

  CASH
    Beginning of year                                     -              -            -
                                                  ------------  -------------  ------------

    End of year                                           -     $        -     $      -
                                                  ============  =============  ============

  SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION
      Cash paid for interest                              -     $        -     $      -
                                                  ============  =============  ============

      Cash paid for income taxes                          -     $        -     $      -
                                                  ============  =============  ============
</TABLE>

                       SEE NOTES TO FINANCIAL STATEMENTS.

                                       F6

<PAGE>


                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002



NOTE  1-  ORGANIZATION  AND  BASIS  OF  PRESENTATION

          Lorelei  Corporation  (the "Company"), a development stage enterprise,
          was organized in Delaware on April 23, 1999 as a "blank check" company
          that  plans  to look for a suitable business to merge with or acquire.
          Operations  since  incorporation have consisted primarily of obtaining
          the  first  capital  contributions  by  the  insiders and coordination
          activities  regarding  the  SEC  registration  of  the  company.

          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.


NOTE  2-  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

          DEFERRED  OFFERING  COSTS

          Deferred  offering  costs, which are being incurred in anticipation of
          the  Company  issuing  its  common  stock  pursuant  to  a  Rule  419
          registration  statement, are being deferred until the registration and
          stock  sale  is  complete.


          INCOME  TAXES

          The Company accounts for income taxes in accordance with the Statement
          of  Financial  Accounting  Standards  No.  109, "Accounting for Income
          Taxes."  SFAS  No.  109  requires  the  recognition  of  deferred  tax
          liabilities and assets at currently enacted tax rates for the expected
          future  tax  consequences  of  events  that  have been included in the
          financial  statements  or  tax  returns.  A  valuation  allowance  is
          recognized  to  reduce the net deferred tax asset to an amount that is
          more  likely  than  not to be realized. The tax provision presented on
          the  accompanying  statement  of operations is zero since the deferred
          tax  asset  generated  from  the  net  operating loss is offset in its
          entirety by a valuation allowance. State minimum taxes are expensed as
          incurred.


          CASH  AND  CASH  EQUIVALENTS

          Cash  and  cash  equivalents,  if  any, include all highly liquid debt
          instruments  with  an original maturity of three months or less at the
          date  of  purchase.


                                       F7

<PAGE>

                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002



NOTE  2-  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

          FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

          Cash,  accounts  payable and other current liabilities are recorded tn
          the financial statements at cost, which approximates fair market value
          because  of  the  short-term  maturity  of  those  instruments.


NOTE  3-  RELATED  PARTY  TRANSACTIONS

          During  1999,  $15,000  was  paid  to  the  law  firm  of  Schonfeld &
          Weinstein,  LLP,  who  is also a shareholder of the Company, for legal
          fees  to  complete  its  SEC registration. These fees were recorded as
          deferred  offering  costs.  For the years ended September 30, 2002 and
          2001,  this same shareholder advanced $3,000 and $1,805, respectively,
          in  working  capital  to  the Company to pay operating expenses. These
          advances  are  included  in  accounts  payable.  A  shareholder of the
          Company  provides  the  Company  with  office  space  and  minimal
          administrative  support  free  of  charge.


                                       F8

<PAGE>


                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002



NOTE  4-  RULE  419  REQUIREMENTS

          Rule  419  requires  that  offering  proceeds  after  deduction  for
          underwriting  commissions,  underwriting  expenses and deal allowances
          issued  be  deposited  into an escrow or trust account (the "Deposited
          Funds"  and  "Deposited  Securities",  respectively)  governed  by  an
          agreement which contains certain terms and provisions specified by the
          Rule.  Under  Rule  419,  the Deposited Funds and Deposited Securities
          will  be  released  to the company and to the investors, respectively,
          only  after  the company has met the following three basic conditions.
          First,  the company must execute an agreement(s) for an acquisition(s)
          meeting  certain  prescribed criteria. Second, the company must file a
          post-effective  amendment  to the registration statement that includes
          the  terms  of  a  reconfirmation  offer  that must contain conditions
          prescribed  by  the  rules.  The  post-effective  amendment  must also
          contain  information  regarding  the  acquisition candidate(s) and its
          business(es), including audited financial statements. The agreement(s)
          must  include,  must  elect to reconfirm their investments. Third, the
          company  must  conduct the reconfirmation offer and satisfy all of the
          prescribed  conditions,  including  the  condition  that  investors
          representing  80%  of  the  Deposited  Funds  must  elect  to  remain
          investors. The post-effective amendment must also include the terms of
          the  reconfirmation  offer  mandated  by  Rule 419. The reconfirmation
          offer  must  include  certain  prescribed  conditions  that  must  be
          satisfied  before  the Deposited Funds and Deposited Securities can be
          released  from  escrow.  After  the  company  submits  a  signed
          representation  to  the escrow agent that the requirements of Rule 419
          have  been met and after the acquisition(s) is consummated, the escrow
          agent  can  release  the  Deposited  Funds  and  Deposited Securities.
          Investors  who  do  not  reconfirm  their investments will receive the
          return  of  a  pro-rata  portion  thereof;  and in the event investors
          representing  less  than  80%  of  the Deposited Funds reconfirm their
          investments,  the Deposited Funds will be returned to the investors on
          a  pro-rata  basis




                                       F9


<PAGE>


                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002



NOTE  5-  LOSS  PER  COMMON  SHARE

          Net  loss  per  share  is  calculated in accordance with SFAS No. 128,
          "Earnings  per Share." Under the provisions of SFAS No. 128, basic net
          loss  per  share  is  computed  by  dividing the net loss available to
          common  stockholders  for the period by the weighted average number of
          common  shares  outstanding  during the period. Diluted net income per
          share  is  computed  by  dividing the net income for the period by the
          weighted  average  number  of  common  and  potential  common  shares
          outstanding  during  the period if their effect is dilutive. Potential
          common  shares  include  incremental  common  shares issuable upon the
          exercise  of  stock  options.


NOTE  6-  STOCKHOLDERS'  EQUITY

          COMMON  STOCK  ISSUANCES

          The  Company  was  duly  organized  under  the  laws  of  the State of
          Delaware. The Company has authorized 20,000,000 shares of common stock
          at  $.001  par  value.  During fiscal 1999, the Company raised $20,000
          through  the  sale  of  200,000 shares of its common stock pursuant to
          subscription  agreements.

          COMMON  STOCK  OPTIONS

          On  November  12,  1999,  the  President of the Company was granted an
          option  to  purchase  10,000  shares of the Company's common stock for
          $0.10  per  share.  The  option  expires  on November 12, 2002, and is
          immediately  exercisable  by  the officer. The exercise price of $0.10
          was  deemed  to  be  the  fair  value  at  the  date  of  grant.

          In  October  1995,  the  Financial Accounting Standards Board ("FASB")
          issued  SFAS  No. 123, "Accounting for Stock-Based Compensation." SFAS
          No.  123  encourages,  but  does  not  require,  companies  to  record
          compensation  plans  at  fair  value.  The  Company  has  chosen,  in
          accordance  with  the  provision  of SFAS No. 123, to apply Accounting
          Principles  Board  Opinion  No.  25,  "Accounting  for Stock Issued to
          Employees"  ("APB  25")  for  its  stock  plans.  Under APB 25, if the
          exercise  price of the Company's stock options is less than the market
          price  of  the underlying stock on the date of grant, the Company must
          recognize  compensation  expense.  SFAS  No.  123  will be adopted for
          disclosure  purposes  only and will not impact the Company's financial
          position,  annual  operating  results, or cash flows. For transactions
          with  other than employees in which services are performed in exchange
          for  stock, the transactions, if any, are recorded on the basis of the
          fair  value  of  the services received or the fair value of the issued
          equity  instrument,  whichever is more readily measurable.



                                       F10

<PAGE>

                               LORELEI CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002


NOTE  6-  STOCKHOLDERS'  EQUITY  (CONTINUED)

          COMMON  STOCK  ISSUANCES  (CONTINUED)

          SFAS  no.123 requires entities that account for awards for stock-based
          compensation to employees in accordance with APB No. 25 to present pro
          forma  disclosures  of net income as if compensation cost was measured
          at  the  date  of grant based on the fair value of the award. The fair
          value  for  these  options  was estimated at the date of grant using a
          Black-Scholes option pricing model with the following weighted-average
          assumptions:  risk-free  interest  rate,  5.75%; dividend yield, none;
          volatility, none; and a weighted-average expected life of three years.
          The  fair value of the options granted during fiscal 2000 is $200. For
          purposes  of  pro  forma  disclosures, the estimated fair value of the
          options  is  a charge to expense in the period granted, as there is no
          vesting period. The Company's net loss for fiscal 2000, on a pro forma
          basis,  would  have been increased by $200 if the options granted were
          accounted  for  following SFAS No.123. These pro forma amounts may not
          be  representative of the future effects on reported results that will
          result  from  the  future  granting  of  stock  options.


          The  Black-Scholes  option  valuation  model  was developed for use in
          estimating  the  fair  value  of  traded  options that have no vesting
          restrictions and are fully transferable. In addition, option valuation
          models require the input of highly subjective assumptions. Because the
          Company's  employee  stock  options have characteristics significantly
          different  from  those  of  traded options, and because changes in the
          subjective  input  assumptions  can  materially  affect the fair value
          estimate,  in  management's  opinion,  the  existing  models  do  not
          necessarily provide a reliable single measure of the fair value of its
          employee  stock  options.


                                       F11

<PAGE>