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


                                   FORM 10-QSB

                             Quarterly Report Under
                       the Securities Exchange Act of 1934

                      For Quarter Ended: September 30, 2001

                         Commission File Number: 0-25725



                                V-FORMATION, INC.
        (Exact name of small business issuer as specified in its charter)


                                   New Jersey
         (State or other jurisdiction of incorporation or organization)


                                   22-3345169
                        (IRS Employer Identification No.)

                               99 Wood Ave. South
                                    Suite 805
                                Islin, New Jersey
                    (Address of principal executive offices)

                              170 Beaver Brook Road
                                Lincoln Park, NJ
                                (Former Address)

                                      08830
                                   (Zip Code)

                                 (732) 321-4040
                           (Issuer's Telephone Number)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing  requirements  for the past 90 days:
Yes __X__ No ____.


The number of shares of the  registrant's  only class of common stock issued and
outstanding, as of November 15, 2001, was 15,596,534 shares.



<PAGE>



                                     PART I


ITEM 1. FINANCIAL STATEMENTS.

     The unaudited financial  statements for the nine months ended September 30,
2001, are attached hereto.

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

     The following  discussion  should be read in conjunction with our unaudited
financial  statements and notes thereto included herein. In connection with, and
because we desire to take  advantage  of, the "safe  harbor"  provisions  of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange  Commission.  Forward looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and  contingencies,  many of which are beyond our control and many
of which,  with  respect to future  business  decisions,  are subject to change.
These  uncertainties and contingencies can affect actual results and could cause
actual results to differ  materially from those expressed in any forward looking
statements  made by us, or on our behalf.  We disclaim any  obligation to update
forward looking statements.

OVERVIEW

     V-Formation,  Inc. ("we", "us", "our" or the "Company") is a multi-faceted,
innovative,  sports technologies  company that has made significant  advances in
the development and marketing of the first major evolution in inline skates. Our
objective is to become the premier sports and related  technologies  firm in the
sports product and  entertainment  industry.  We  manufacture  and sell patented
V-configuration  roller skates, as well as "cutting edge" extreme sports apparel
under the Nexed brand name, to sporting goods retailers  located  throughout the
United States and Canada.

     Effective March 16, 2001,  pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") and Rule 12(g)(3)(a) of the Securities Exchange Act of 1934,
as amended  (the "1934  Act"),  we  acquired  all of the  outstanding  shares of
Buckeye Oil & Gas,  Inc., a public  reporting  company,  in exchange for 478,082
shares of our common stock and the cash payment of $150,000.  The shares  issued
represented approximately 2.5% of our issued and outstanding common

                                        2

<PAGE>



stock at the time of closing.  We were the surviving entity and by virtue of the
merger, we became a reporting company under the 1934 Act.

     While we can provide no assurances,  we believe that, with suitable capital
funding,  we will be well positioned to make substantial market penetration with
respect to our product lines and capture market share, substantially fueling our
growth. Additionally, through the use and acquisition of intellectual properties
which  are  either  owned or  licensed  exclusively  by us, we  believe  we have
effectively  established  the  broad  foundation  we  have  used to  attain  the
accomplishments  we have  experienced to date. We intend to use our intellectual
properties  as a  springboard  for  future  growth.  Presently,  all our  sports
products   incorporate   next   generation   technology   in  their  design  and
implementation.   Importantly,   all  our  key   technologies  are  proprietary,
licensable and transferable.

     The  following  information  is intended to highlight  developments  in our
operations  to  present  our  results  of  operations,  to  identify  key trends
affecting our businesses and to identify other factors  affecting our results of
operations for the nine month periods ended September 30, 2001 and 2000.

RESULTS OF OPERATIONS

     Comparison of Results of Operations for the Nine Months Ended September 30,
2001 and 2000

     Our  revenues  increased  to  $1,394,072  for the  nine-month  period ended
September 30, 2001, from $951,878 for the similar period in 2000, an increase of
$442,194  (46.5%) The increase in revenues was mainly  attributable to the sales
of hockey  pants  totaling  $615,139 in 2001  compared  to $222,285 in 2000,  an
increase of $392,854 (176.7%).  Within the pants category, sales of our Core and
Fluid pant  models  were  $471,397,  which  represents  76.6% of our total pants
revenue.

     In the nine months ended September 30, 2001, costs of sales also increased,
to $1,105,202,  compared to $890,934 for the similar period in 2000, an increase
of $214,268 (24%). This was due primarily to the increase in revenues  described
above  offset by attaining  higher  margins  (49%) on  increased  volume of pant
sales.  Profit margins also improved since we had less discount programs than in
the prior year.

     General and  administrative  expenses were  $1,851,666  for the nine months
ended September 30, 2001, compared to $1,452,168 for the similar period in 2000,
an  increase of $399,498  (27.5%).  This  increase  was due  primarily  to costs
associated  with payments to newly  retained  outside  consultants  for which no
costs were  recorded in the first nine  months of 2000.  These  consultants  are
comprised

                                        3

<PAGE>



of financial  advisors,  a patent  expert and an investor  relations  firm hired
subsequent  to our  merger  with  Buckeye  Oil  and Gas and  becoming  a  public
reporting  company.  The  payments  to these  consultants  during the first nine
months 2001 totaled  $244,149 while there were no payments in the similar period
in 2000.  Also,  in the first nine  months of 2001,  we  incurred  approximately
$170,000 of costs  related to  applications  to various  stock  exchanges and to
costs in connection  with settlement with the New Jersey Bureau of Securities in
the matter described in prior reports.  This obligation has been satisfied as of
the date of this Report.

     Also,  during the nine-month period ended September 30, 2001, we incurred a
one-time charge of $184,441  arising from the closing of our warehouse  facility
in  Paterson,  NJ. Our  warehouse  operations  are now handled by a  fulfillment
center located in Aurora,  Colorado.  As a result of this change, we expect that
profit  margins  will  increase  in the  future  due to lower  costs of sales by
reducing employee-related costs, shipping costs and general factory overhead.

     During  the  nine-month  period  ended  September  30,  2001,  selling  and
promotional  costs  increased  by  $205,364  from  $958,384 to  $1,163,748.  The
increase is due primarily to deeper  discounts taken by larger retail  customers
for  early  payment  of  amounts  due.  There was also an  increase  in bad debt
expense, which is directly attributable to the increase in sales volume.

     Research and development costs during the nine-month period ended September
30, 2001 were $303,999 compared to $193,395 for the prior period, an increase of
$110,604.  Travel expenses  related to the production and development of samples
of new products  together  with the expenses of the sourcing of goods in foreign
countries and meeting potential  manufacturers accounted for the majority of the
costs in this  category.  Costs  associated  with the shipping of samples to the
United  States for  testing  purposes  was  another  contributing  factor to the
increase in expenses within the research and development area.

     Also during the nine months  ended  September  30, 2001,  depreciation  and
amortization  expense  increased  by  approximately   $21,000  from  $84,834  to
$105,036.  This increase is primarily due to the  amortization  and depreciation
associated with patents, trademarks and equipment.

     In addition,  during the  nine-month  period ended  September  30, 2001, we
incurred  $1,001,182  of  expenses  paid to outside  consultants  in the form of
common stock issuances.  During the nine-month  period ended September 30, 2000,
we also  incurred  a one-  time  charge  of  $4,410,000,  which  was paid by the
issuance  of 735,000  shares of common  stock,  which was  recorded at $6.00 per
share, the most recent issuance price for our common stock at the

                                        4

<PAGE>



time of issuance.  This charge arose out of the  settlement of claims against us
relating  to a 1996  transaction  in which the  plaintiffs  acted as  brokers by
introducing  various parties that subsequently  invested equity capital into our
company.  The plaintiffs  asserted that they were entitled to a finder's fee for
having made certain introductions.

     Interest and other expense,  which principally consists of interest expense
net of  interest  income,  decreased  from  $46,601  in the  nine  months  ended
September 30, 2000,  to $12,706 for the nine months ended  September 30, 2001, a
decrease of $33,895  (72.7%).  This  decrease was due to lower debt  balances on
which interest is calculated. Additionally, this decrease was due to the accrual
of $8,158 in interest income on a shareholder  loan during the nine months ended
September 30, 2001. See "Liquidity and Capital Resources" below.

     Effective  April  2001,  we  discontinued  the  operations  of  two  of our
subsidiaries,  On Net Sports,  Inc., a proposed  media company and Soft Machine,
Inc., a computer software company. The operating expenses of these subsidiaries,
which totaled  $208,764  during the nine-month  period ended September 30, 2001,
have been reported as discontinued  operations in our consolidated  statement of
operations.  Neither of the  subsidiaries had generated any revenues since their
inception late in 2000.

     As a result,  we generated a net loss of  $(4,692,672)  for the nine months
ended September 30, 2001 ($.35 per share) compared to a net loss of $(7,133,110)
for the nine months ended September 30, 2000 ($.97 per share).

LIQUIDITY AND CAPITAL RESOURCES

     At September  30, 2001,  we had  $296,262 in cash and cash  equivalents,  a
decrease  of  $413,089  from  December  31,  2000.  This  decrease  in cash  was
attributable  to cash  used in  operating  activities  of  $4,309,392  offset by
approximately $4,270,000 of proceeds received from the sale of our common stock,
principally  from the exercise of outstanding  warrants.  Cash was also used for
principal  payments under loan  agreements  ($202,078) and capital  expenditures
($169,848).  Accounts receivable increased to $374,180 from $173,349 at December
31, 2000, which is attributable to the increased sales volume during the current
year.

     As of September 30, 2001, we have a note  receivable from an officer with a
principal balance of $186,890.  The principal balance was $32,456 as of December
31,  2000,  an  increase  of  $154,434.  The note  bears  interest  at 8% and is
repayable  upon demand.  Interest on the note,  which is also payable on demand,
totaled $8,158 for the nine-month period ended September 30, 2001. We are in the
process of negotiating specific repayment terms.


                                        5

<PAGE>



     During  September  2001,  we  obtained  a new  $1,250,000  line  of  credit
agreement with a bank.  The line of credit is available  through March 31, 2002.
Amounts  drawn on the  line  bear  interest  at the  prime  rate  plus  2%.  The
obligation  is  collateralized  by the personal  guarantees  and by mortgages on
specific real estate assets of one of our officers and one of our directors.

     During  October  2001,  in return for  assistance  in obtaining the line of
credit described above and  collateralizing  the loan with personal  assets,  we
provided the aforementioned director with stock-based  compensation of $518,999.
As a result of the  arrangement,  the  director  satisfied  $1,037,999  of stock
subscriptions  payable  to us with an  October  2001  payment  in the  amount of
$519,000.

     At September 30, 2001, we had certain outstanding notes payable,  including
notes payable in the original  principal  balances of $1,156,000,  payable in 18
equal  quarterly  installments  of  $77,153,  including  interest  at 8%,  which
commenced  April 1, 1998 and is due July 1, 2002.  As of November 15, 2001,  the
outstanding  principal  balance on these  notes was  $222,499.  These  notes are
collateralized by consent judgments in favor of the creditors and are personally
guaranteed by certain of our officers.  These  agreements  also contain  certain
covenants that restrict officers' compensation, the making of loans and prohibit
the declaration or payment of cash dividends during the term of the notes.

     In addition,  we have an  outstanding  note  payable  which had a principal
balance of $140,000 at September 30, 2001.  This note is  unsecured,  payable in
five annual  installments of $35,000 without interest,  which payments commenced
March 31, 2001.  The unpaid  balance of the note is payable in full in the event
of a sale or merger of our  company,  or in the event we receive  net funding of
$1.5 million or more from an equity offering.

     As of the date of this  Report,  we do not believe that we will require any
additional  capital  infusion to our core business  because of the $1.25 million
line of credit  discussed above herein.  See "Trends,"  below.  However,  in the
event  we  elect  to  engage  in  any  extraordinary  activity,   including  any
acquisitions,  or any unforeseen events occur, we may need to raise capital.  As
of the date of this Report, there are no extraordinary  activities or definitive
acquisitions anticipated.

TRENDS

     Our strategy is to direct our current  efforts to increase sales and market
penetration.  While no  assurances  can be  provided,  we believe  that our core
business,  the wholesale  distribution  and marketing of "Nexed"  branded roller
skates,  apparel  and  accessories,  will  substantially  grow  over the next 12
months. In support of this contention, the Sporting Goods Manufacturing

                                        6

<PAGE>



Association  activity  report  dated April 30,  2001,  cites the sport of inline
skating  as "the  third  most  popular  sports  for  youth,  based  on  frequent
participation"  for ages 6-17. We remain  confident  that this growth trend will
continue and as a result,  our sales  revenues and market share will continue to
grow in a proportional manner.  Therefore, we believe that we will be profitable
by the third quarter of 2002,  without taking into account the potential  inflow
of  revenue  from  the  outstanding  patent   infringement   lawsuits  described
hereinbelow.  There can be no  assurances  that these  matters  will result in a
favorable outcome for us.

     In addition, in prior Reports we had disclosed our possible diversification
into other  industries.  We explored various  opportunities  which had presented
themselves and thereafter, our management has decided to devote our resources to
our core business of sporting good distribution.

INFLATION

     Although our operations are influenced by general economic  conditions,  we
do not believe that inflation had a material effect on the results of operations
during the nine months ended September 30, 2001.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     We are party to various judicial matters, including the following:

     In January  2001,  we filed a complaint  against  Benetton  Group,  SPA and
Roller Blade, Inc. in the United States District Court, Southern District of New
York, Docket No. 01 CIV 510, wherein we have alleged willful infringement of our
patent  rights for our inline skate frames.  Upon  information  and belief,  the
defendants  are making,  using and offering to sell inline skate  products which
infringe on our patents.  The defendants  have filed an answer and the matter is
currently in the discovery phase. Our complaint  requests  injunctive relief, an
accounting of profits and an award of monetary damages.  While no assurances can
be provided, we are optimistic about the likelihood of success.

     In February 2001, we filed a complaint in the United States District Court,
Southern  District of New York,  Docket No. 01 CV 1298,  against adidas America,
Salomon North America,  Inc.,  Salmon S.A.,  adidas AG and adidas Salmon AG, for
willful  infringement  of  certain of our  patent  rights  for our inline  skate
frames.  Upon  information  and belief,  the  defendants  are making,  using and
offering to sell inline skate products which infringe on certain of our patents.
Our complaint requests injunctive relief, an

                                        7

<PAGE>



accounting  of profits  and an award of  monetary  damages.  In March  2001,  we
voluntarily  dismissed  this  action  without  prejudice,  after we  executed an
agreement with the  defendants.  This agreement  provided that the parties enter
into settlement  discussions for a period of 75 days.  However, no agreement was
reached during these discussions and as a result,  we refiled our complaint.  We
are  currently  awaiting  the  defendant's  answer  to our  complaint.  While no
assurances can be provided, we are optimistic about the likelihood of success.

     In March 2001,  we filed a complaint in the United States  District  Court,
Southern District of New York, Docket No. 01 CIV 2262, against MGM S.P.A.,  Fila
Holding S.P.A. and Fila U.S.A., Inc., for willful infringement of certain of our
patent rights for our inline skates. Upon information and belief, the defendants
are making,  using and offering to sell inline skate  products which infringe on
certain of our patents.  Our complaint requests injunctive relief, an accounting
of profits  and an award of  monetary  damages.  As of the date of this  Report,
service of our  complaint has been  effectuated  on the foreign  defendants  and
discovery has commenced.  Additionally, we have amended our complaint to include
certain of the defendant's  retailers,  who are currently being served. While no
assurances can be provided, we are optimistic about the likelihood of success.

     In April 2001,  we filed a complaint in the United States  District  Court,
Southern  District  of New York,  Docket  No. 010 CIV 1693,  against  First Team
Sports,  Inc. for willful  infringement  of certain of our patent rights for our
inline skates, as well as breach of contract.  Upon information and belief,  the
defendant  is making,  using and offering to sell inline  skate  products  which
infringe on certain of our patents. Our complaint requests injunctive relief, an
accounting of profits and an award of monetary  damages.  Service of process has
been  effectuated  upon the initial  defendant and discovery is being commenced.
Additionally,   we  have  amended  our  complaint  to  include  certain  of  the
defendant's  retailers,  who are currently being served. While no assurances can
be provided, we are is optimistic about the likelihood of success.

     Librie vs. V-Formation, Inc. was commenced in Superior Court of New Jersey,
Passaic County in January 1999,  alleging damages for injuries  sustained due to
an alleged design defect.  Following the deposition of the plaintiff, it appears
that the current  basis of the claim  suggests a design  defect  which would not
allow the  wheels to slide  during a T-stop  configuration.  This  represents  a
change  in the  plaintiff's  liability  theories  from  the  one  stated  in the
complaint, which alleged an absence of breaking components.  While no assurances
can be  provided,  we believe  the  liability  aspects of this claim are without
merit.  Attorneys for our product liability insurance provider are handling this
matter.


                                        8

<PAGE>



     V-Formation, Inc. v. John B.M. Frohling, Esq. was commenced in the Superior
Court of New Jersey for Essex  County in June 1999.  We alleged  malpractice  in
connection with our previous legal counsel.  We are seeking the full recovery of
fees and additional  recovery for punitive  damages.  The matter is still in the
discovery phase.  However, we have recently learned that the defendant has filed
for protection in the United States Bankruptcy Court.

     In April 2001,  Vertex  Capital  Corp.  filed a complaint  against us in US
Federal Court for the Southern District of New York, seeking damages for alleged
breach  of  contract  and  unjust  enrichment.  We have  filed  our  answer  and
counterclaims. Discovery has commenced. It is our position that these claims are
without merit and will be vigorously defended.

     In October 2001,  we filed an action  against USCO  Distribution  Services,
Inc., d/b/a USCO Logistics ("USCO"), in the United States District Court for the
District of Colorado,  asserting  claims  arising from USCO's failure to perform
according to its "order fulfillment" contracts,  which resulted in our incurring
six  figure  losses.  USCO has  asserted  counterclaims  totaling  approximately
$103,000  based on its charges for services under the contracts and has asserted
a possessory lien on our inventory in their  possession,  which has a cost basis
of approximately $80,000. Trial has not yet been scheduled and discovery has not
yet begun as of the date of this Report.

     We have been named as a defendant in several  other  lawsuits in the normal
course of our business.  In the opinion of  management,  after  consulting  with
legal counsel,  the liabilities,  if any,  resulting from these matters will not
have a material effect on our financial statements.

ITEM 2. CHANGES IN SECURITIES

     During the three  month  period  ended  September  30,  2001,  shareholders
converted  81,286  shares of our Series C Preferred  Stock,  to 81,286 shares of
common stock. The Series C Preferred Stock had a conversion premium of $0.96 per
share. We received aggregate proceeds of $78,035 from this conversion.

     In July  2001,  we  issued  394  shares  of our  common  stock  to  outside
consultants as  compensation  for services,  valued at $1,182 ($3.00 per share),
the most recent issuance price for our common stock at the date of issuance.

         In the aforesaid transactions, we relied upon the exemption from
registration afforded by Section 4(2) under the Securities Act of 1933, as
amended, to issue the securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE


                                        9

<PAGE>



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

     In July  2001,  the  holders of a  majority  of our issued and  outstanding
shares of common stock  adopted our 2001 Stock Option Plan,  reserving 3 million
shares of common  stock  for  issuance  thereunder.  As of the date  hereof,  no
options have been issued under the Plan.

ITEM 5. OTHER INFORMATION - NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -

     (a) Exhibits - none

     (b) Reports on Form 8-K. We did not file any reports on Form 8-K during the
three month period ended September 30, 2001.


                                       10

<PAGE>

<TABLE>

                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<CAPTION>
                                                                      September 30,  December 31,
                                                                          2001           2000
                                                                      ------------   ------------
                                                                       (unaudited)
<S>                                                                   <C>            <C>
Current assets:
   Cash                                                               $    296,262   $    709,351
   Accounts receivable, net of allowance for doubtful accounts
      of $60,000 in 2001 and $21,000 in 2000                               374,180        173,349
   Inventories                                                             731,293        366,253
   Prepaid expenses and other current assets                               287,589         44,757
                                                                      ------------   ------------

               Total current assets                                      1,689,324      1,293,710

Property and equipment, net                                                335,873        334,339

Patents and trademarks, net of accumulated amortization
   of $151,727 in 2001 and $119,563 in 2000                                574,346        521,119

Security deposits                                                           46,529         37,437
                                                                      ------------   ------------

                                                                      $  2,646,072   $  2,186,605
                                                                      ============   ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current maturities of long-term debt                                    317,756   $    334,227
   Accounts payable and accrued expenses                                   594,902        510,096
                                                                      ------------   ------------

               Total current liabilities                                   912,658        844,323
                                                                      ------------   ------------

Long-term debt, net of current maturities                                  105,000        290,607
                                                                      ------------   ------------

Stockholders' equity:
  Preferred stock - no par value, 7,500,000 shares authorized,
      1,475,148 shares issued, 1,392,778 shares outstanding in 2001,
      1,474,064 shares outstanding in 2000                               4,824,770      5,286,470
   Common stock - no par value, 45,000,000 shares authorized,
      16,203,283 shares issued, 15,596,534 shares outstanding in 2001
      10,516,150 shares issued, 10,038,234 shares outstanding in 2000   29,937,067     25,180,805
   Additional paid-in capital                                           30,693,116     30,693,116
   Subscriptions receivable                                             (1,094,057)    (2,457,545)
   Accumulated deficit                                                 (62,134,493)   (57,441,822)
   Treasury stock at cost, 607,833 shares in 2001
       and 479,000 shares in 2000                                         (597,989)      (209,349)
                                                                      ------------   ------------

                                                                         1,628,414      1,051,675

                                                                      $  2,646,072   $  2,186,605
                                                                      ============   ============
</TABLE>

            See notes to condensed consolidated financial statements

                                       11



<PAGE>



                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                   Nine-month period
                                                  ended September 30,
                                            -----------------------------
                                                2001              2000
                                            -----------      ------------

Sales                                       $ 1,394,072      $    951,878

Cost of goods sold                            1,105,202           890,934
                                            -----------      ------------

Gross profit                                    288,870            60,944
                                            -----------      ------------

Operating expenses:
   Selling and promotional                    1,163,748           958,384
   General and administrative                 1,851,666         1,452,168
   Factory closing charges                      184,441                 -
   Research and development                     303,999           193,395
   Depreciation and amortization                105,036            84,348
   Interest and other                            12,706            46,601
   Equity-based compensation                  1,001,182         4,459,158
   Reorganization expense                       150,000                 -
                                            -----------      ------------

                                              4,772,778         7,194,054
                                            -----------      ------------

Loss from continuing operations              (4,483,908)       (7,133,110)

Discontinued operations                         208,764                 -
                                            -----------      ------------

Net loss                                    $(4,692,672)     $ (7,133,110)
                                            ===========      ============

Loss per common share:
   Continuing operations                    $     (0.33)     $      (0.97)
   Discontinued operations                        (0.02)                -
                                            -----------      ------------


                                            $     (0.35)     $      (0.97)
                                            ===========      ============

Weighted average shares outstanding          13,589,947         7,360,264
                                            ===========      ============








            See notes to condensed consolidated financial statements

                                       12

<PAGE>

                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                     Three-month period
                                                     ended September 30,
                                                 ---------------------------
                                                     2001           2000
                                                 -----------    ------------

Sales                                            $   421,738    $    229,201

Cost of goods sold                                   368,950         139,347
                                                 -----------    ------------

Gross profit                                          52,788          89,854
                                                 -----------    ------------

Operating expenses:
   Selling and promotional                           405,649         622,795
   General and administrative                        754,613         240,315
   Research and development                          111,102         190,985
   Depreciation and amortization                      35,012          28,116
   Interest and other                                  4,408          13,552
   Equity-based compensation                         151,182          30,000
                                                 -----------    ------------

                                                   1,461,966       1,125,763
                                                 -----------    ------------

Net loss                                         $(1,409,178)   $ (1,035,909)
                                                 ===========    ============

Loss per common share:
   Continuing operations                         $     (0.09)   $      (0.13)
                                                 ===========    ============


Weighted average shares outstanding               15,556,265       7,700,859
                                                 ===========    ============















            See notes to condensed consolidated financial statements

                                       13


<PAGE>
<TABLE>


                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<CAPTION>
                                                                 Nine-month period
                                                                 ended September 30,
                                                              --------------------------
                                                                  2001          2000
                                                              -----------    -----------
<S>                                                           <C>            <C>
Cash flows from operating activities:
   Net loss                                                   $(4,692,672)   $(7,133,110)
   Adjustments to reconcile net loss to net cash
      used in operating activities:
         Interest accrued on shareholder loan                      (8,158)             -
         Bad debts                                                 49,184              -
         Depreciation and amortization                            105,036         84,348
         Fees and commissions paid in stock and warrants        1,001,182         19,158
         Litigation settlement paid in stock and warrants               -      4,410,000
         Debt incurred in litigation settlement                         -        195,000
         Charitable contributions paid in stock                         -         30,000
         Factory closing charges                                  184,441              -
         Changes in operating assets and liabilities:
            (Increase) decrease in accounts receivable           (250,015)       (73,733)
            (Increase) decrease in inventories                   (539,429)        (2,437)
            (Increase) decrease in prepaid expenses
               and other current assets                          (234,674)       (33,325)
            (Increase) decrease in security deposits               (9,092)         5,050
            Increase (decrease) in accounts payable
               and accrued expenses                                84,805        119,469
                                                              -----------    -----------

                  Net cash used in operating activities        (4,309,392)    (2,379,580)
                                                              -----------    -----------

Cash flows from investing activities:
   Capital expenditures for equipment, patents and trademarks    (169,848)       (70,410)
                                                              -----------    -----------

                 Net cash used in investing activities           (169,848)       (70,410)
                                                              -----------    -----------

Cash flows from financing activities:
   Proceeds from notes payable                                          -        395,000
   Proceeds from shareholder loans                                      -        350,000
   Principal payments under loan agreements                      (202,078)      (173,551)
   Proceeds from issuance of common stock                       4,272,768        951,659
   Proceeds from issuance of preferred stock                            -        913,208
   Purchase of treasury stock                                      (4,540)             -
                                                              -----------    -----------

                 Net cash provided by financing activities      4,066,150      2,436,316
                                                              -----------    -----------

Net decrease in cash                                             (413,089)       (13,674)

Cash, beginning of period                                         709,351        160,186
                                                              -----------    -----------

Cash, end of period                                           $   296,262    $   146,512
                                                              ===========    ===========
</TABLE>


            See notes to condensed consolidated financial statements

                                       14


<PAGE>


                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

                               September 30, 2001


1.   Unaudited interim financial statements

     The condensed  consolidated  financial statements have been prepared by the
     Company,  without  audit,  pursuant  to the  rules and  regulations  of the
     Securities and Exchange  Commission and reflect all adjustments  which are,
     in the opinion of management,  necessary to present fairly the  information
     required  herein.  Certain  information and footnote  disclosures  normally
     included in the financial  statements prepared in accordance with generally
     accepted accounting principles have been omitted pursuant to such rules and
     regulations, although management believes that the disclosures are adequate
     to make the information  presented not misleading.  These statements should
     be read in conjunction with the financial  statements of V-Formation,  Inc.
     and  subsidiaries and notes thereto included in the Company's Annual Report
     on Form  10-KSB  for the year  ended  December  31,  2000.  The  results of
     operations for the nine-month periods ended September 30, 2001 and 2000 are
     not necessarily  indicative of the results of operations to be expected for
     the full year.

2.   Nature of business

     V-Formation,  Inc. (the  "Company"),  was  organized in January  1995.  The
     Company  manufactures and sells patented  V-configuration  roller skates to
     sporting goods retailers  located  throughout the United States and Canada.
     During 1999, the Company  acquired the Nexed brand of hockey  equipment and
     apparel.  During 2000, the Company acquired On Net Sports, Inc. ("ONSI"), a
     development stage company that has no operations to date. In addition,  the
     Company   incorporated  Soft  Machine,   Inc.  ("SMI")  as  a  wholly-owned
     subsidiary to acquire certain software and intellectual properties. SMI has
     had no operations to date.  Effective April 2001, the Company  discontinued
     the operations of ONSI and SMI.

3.   Net loss per common share

     Net loss per common share is computed based on the weighted  average number
     of shares of common stock outstanding for the periods presented. The effect
     of stock  options and warrants on the net loss per share was  anti-dilutive
     for the periods presented.

4.   Company reorganization

     Effective   March  14,  2001,   pursuant  to  an  Agreement   and  Plan  of
     Reorganization  (the "Merger  Agreement"),  the Company acquired all of the
     outstanding   shares  of  Buckeye  Oil  and  Gas,   Inc.   ("Buckeye"),   a
     publicly-held corporation,  in exchange for 478,082 shares of the Company's
     common  stock  and a payment  of  $150,000.  The  shares  issued  represent
     approximately 2.5% of the Company's  outstanding  securities  subsequent to
     the transaction. V-Formation was the surviving corporation and by virtue of
     the  merger,  became a  fully-reporting  publicly-held  company  under  the
     Securities Act of 1934. The company  reorganization  was accounted for as a
     capital transaction.


                                       15
<PAGE>

5.    Equity transactions

     During the nine-month  period ended  September 30, 2001, in addition to the
     reorganization  described in Note 4, the following equity transactions took
     place:

     -    The Company sold an  additional  345,165  shares of common stock at $3
          per share, raising proceeds of $1,035,495.

     -    Investors  exercised an additional 611,207 common stock warrants at an
          exercise price of $3 per share,  raising proceeds of $739,564,  net of
          $1,094,057 of subscriptions receivable.

     -    Officers of the Company  exercised  3,841,000 common stock warrants at
          an exercise price of $0.10 per share.

     -    The Company issued 330,394 shares of common stock as compensation  for
          assets and services valued at $991,182.

     -    The  Company  purchased  128,833  shares of treasury  stock  including
          128,033 shares  redeemed to pay for the warrants  exercised by offices
          of the Company.

     -    The Company collected $2,447,545 of subscriptions receivable.

     -    Shareholders  converted  81,286 shares of Series C preferred  stock to
          81,286 shares of common stock.  In connection  therewith,  the Company
          received $78,035 in conversion premiums.

6.   Discontinued operations

     Effective  April  2001,  the Company  discontinued  the  operations  of its
     subsidiaries,  On Net Sports,  Inc. and Soft  Machine,  Inc. The  operating
     expenses of the subsidiaries have been reported as discontinued  operations
     in the  consolidated  statement of operations.  Neither of the subsidiaries
     had generated any revenues since their inception, late in 2000.

7.   Stock option plan

     During June 2001, the Company's Board of Directors unanimously approved the
     adoption of a 2001 Stock  Option Plan for  officers,  directors,  employees
     consultants  and  advisors of the Company and  reserved an  aggregate  of 3
     million  shares of the Company's  common stock,  which shall underlie stock
     options  granted  pursuant  to the  plan.  To date,  no  options  have been
     granted.

8.   Commitments and subsequent events

     During September 2001, the Company obtained a new $1,250,000 line of credit
     agreement  with a bank.  The line of credit is available  through March 31,
     2002.  Amounts  drawn on the line bear  interest at the prime rate plus 2%.
     The  obligation  is  collateralized  by  the  personal  guarantees  and  by
     mortgages on specific real estate  assets of one of the Company's  officers
     and one of its directors.

     During  October  2001,  in return for  assistance  in obtaining the line of
     credit described above and  collateralizing  the loan with personal assets,
     the  Company   provided  the   aforementioned   director  with  stock-based
     compensation  of  $518,999.  As a result of the  arrangement,  the director
     satisfied $1,037,999 of stock subscriptions  payable to the Company with an
     October 2001 payment in the amount of $519,000.

                                       16



<PAGE>


                                   SIGNATURES


     Pursuant to the  requirements  of Section 12 of the Securities and Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                       V-FORMATION, INC.
                                       (Registrant)

                                       Dated:  November 15, 2001


                                       By:s/ Richard Stelnick
                                          --------------------------------
                                          Richard Stelnick, Chief Executive
                                          Officer

                                       17