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: June 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.)


                              170 Beaver Brook Road
                                Lincoln Park, NJ
                    (Address of principal executive offices)

                                      07035
                                   (Zip Code)

                                 (973) 872-9400
                           (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 August 14, 2001, was 15,514,952 shares.



<PAGE>



                                     PART I


ITEM 1. FINANCIAL STATEMENTS.

     The unaudited financial  statements for the six months ended June 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 six month periods ended June 30, 2001 and 2000.

RESULTS OF OPERATIONS

     Comparison of Results of Operations  for the Six Months Ended June 30, 2001
and 2000

     Our revenues  increased to $972,334 for the six-month period ended June 30,
2001 from  $722,311  for the  similar  period in 2000 an  increase  of  $250,023
(34.6%). The increase in revenues was mainly attributable to the sales of hockey
pants  totaling  $496,163 in 2001  compared to $127,158 in 2000,  an increase of
$369,005 (290.2%).  Within the pants category, sales of our Core pant model were
$216,798, which represents 43.7% of our total pants revenue.

     In the six months ended June 30, 2001,  costs of sales also  increased,  to
$736,252  compared to $670,465  for the similar  period in 2000,  an increase of
$65,787  (9.8%).  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.

     Selling,  general and  administrative  expenses were $1,936,949 for the six
months ended June 30, 2001,  compared to  $1,577,579  for the similar  period in
2000, an increase of $359,370 (22.8%).  This increase was due primarily to costs
associated  with payments to newly  retained  outside  consultants  for which no
costs were  recorded  in the first six  months of 2000.  These  consultants  are
comprised of financial advisors, a patent expert and an investor relations

                                        3

<PAGE>



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 six
months 2001 totaled  $183,928 while there were no payments in the similar period
in 2000.  Also,  in the first  six  months of 2001,  we  incurred  approximately
$120,000 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 under legal proceedings.

     Also,  during the  six-month  period  ended June 30,  2001,  we  incurred a
one-time charge of $102,643  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.

     In addition,  during the six-month  period ended June 30, 2001, we incurred
$850,000 of expenses  paid to outside  consultants  in the form of common  stock
issuances.

     During  the six month  period  ended  June 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 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  expense  decreased  from $33,015 in the six months ended June 30,
2000 to $11,135 for the six months  ended June 30,  2001,  a decrease of $21,880
(66.3%).  This  decrease  was due to lower debt  balances  on which  interest is
calculated, along with an accelerated debt payment made in the prior period. 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  $208,555  during the six-month  period ended June 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  $(3,173,100)  for the six months
ended June 30, 2001 ($.25 per share) compared to a net

                                        4

<PAGE>



loss of $(6,172,022) for the six months ended June 30, 2000 ($.86 per share).

LIQUIDITY AND CAPITAL RESOURCES

     At June 30,  2001,  we had  $1,483,266  in cash and  cash  equivalents,  an
increase  of  $773,915  from  December  31,  2000.  This  increase  in cash  was
attributable to approximately  $4,190,000 of proceeds  received from the sale of
our common stock,  principally from the exercise of outstanding  warrants.  This
increase  was offset by principal  payments  under loan  agreements  ($119,098),
capital  expenditures  ($116,613),  cost of the merger with  Buckeye Oil and Gas
($150,000)  and  cash  used  in  operating  activities  ($3,030,567).   Accounts
receivable  increased to $591,100 from  $173,349 at December 31, 2000,  which is
attributable  to the  increased  sales volume  during the second  quarter of the
current year.

     At June 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 August 13, 2001,  the  outstanding
principal balance on this note was $282,756.  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 June 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.

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
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.

                                        5

<PAGE>




     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 affect on the results of operations
during the six months ended June 30, 2001.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

     In  December  1999,   the  New  Jersey  Bureau  of  Securities   served  an
administrative complaint on us alleging that we had sold unregistered securities
and used unregistered  agents for the purpose and that we had failed to disclose
or  misstated  material  information  about us in selling our  securities.  This
administrative  complaint  was never  formally  docketed.  We denied any and all
allegations.

     In March 2001,  the New Jersey Bureau of Securities  entered into a Consent
Decree with us, wherein we,  without  admitting or denying any  wrongdoing,  did
agree to pay  $212,000  over a nine (9)  month  period  in equal  increments  of
$23,555.  All payments  have been made in a timely manner as of the date of this
Report.

     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

                                        6

<PAGE>



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. 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.

     On June 1, 2000,  Warren  Depree,  a former  employee,  filed a three count
complaint  against us in the  Superior  Court of New Jersey,  Hunterdon  County,
Warren  Depree  v.  V-Formation,  Inc.,  Docket  No.  HNT-L-325-00,  alleging  a
violation of the New Jersey Conscientious Employee Protection Act, wrongful acts
sounding and intentional torts. In June 2001, this matter was settled by payment
of $5,000 to the plaintiff.

     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

                                        7

<PAGE>



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.

     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.  Appropriate  applications
have been made for relief from the automatic stay.

     Tenzer-Greenblatt  v. V-Formation,  Inc. was commenced in the Supreme Court
of the State of New York,  Index No.  123484-99.  Tenzer-Greenblatt,  our former
securities counsel, filed an arbitration petition pursuant to the fee engagement
agreement of February  29, 1997  between the parties.  They claim they were owed
attorneys fees of $127,891  relative to securities  work performed on our behalf
and in  connection  with our  defense  of  another  matter,  described  above in
"Liquidity and Capital  Resources." In June 2001, this matter was settled by the
payment of $25,000 to the plaintiff.

     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.  It is our position  that these claims are without merit and will
be vigorously defended.

     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

     Since  March 2001,  we have sold  345,165  shares of our common  stock at a
price of $3.00 per share to 22  "accredited  investors" (as that term is defined
in Regulation D promulgated  under the Securities Act of 1933, as amended),  for
total  proceeds of $1,035,495.  Further,  since January 2001,  611,207  warrants
which had previously  been issued were exercised by the holders  thereof,  which
warrants  had an  exercise  price of $3.00  per  share.  We  received  aggregate
proceeds of $739,564, net of $1,094,057 of subscriptions receivable.

                                       8
<PAGE>


     In June  2001,  we issued  330,000  shares of our  common  stock to outside
consultants as  compensation  for assets and services  valued at $990,000 ($3.00
per share).

     In each of the aforesaid  transactions,  we relied upon the exemption  from
registration  afforded  by Section  4(2) under the  Securities  Act of 1933,  as
amended, and/or Regulation D promulgated thereunder to issue the securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE

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

     There were no matters  submitted to a vote of security  holders  during the
three month period ended June 30, 2001. However, subsequent thereto, 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 June 30, 2001.


                                        9

<PAGE>




                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                    June 30,      December 31,
                                                      2001            2000
                                                 --------------  --------------
                                                  (unaudited)
Current assets:
   Cash                                          $    1,483,266  $      709,351
   Accounts receivable, net of allowance for
      doubtful accounts of $50,000 in 2001
      and $21,000 in 2000                               591,100         173,349
   Inventories                                          337,107         366,253
   Prepaid expenses and other current assets            479,103          44,757
                                                 --------------  --------------

               Total current assets                   2,890,576       1,293,710
                                                 --------------  --------------

Property and equipment, net                             351,532         334,339
                                                 --------------  --------------

Patents and trademarks,
   net of accumulated amortization
   of $141,069 in 2001 and $119,563 in 2000             540,464         521,119

Cost in excess of net assets acquired,
   net of accumulated amortization                    1,544,640               -

Security deposits                                        28,499          37,437
                                                 --------------  --------------

                                                 $    5,355,711  $    2,186,605
                                                 ==============  ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current maturities of long-term debt          $      319,449  $      334,227
   Accounts payable and accrued expenses                496,960         510,096
                                                 --------------  --------------

               Total current liabilities                816,409         844,323
                                                 --------------  --------------

Long-term debt, net of current maturities               186,288         290,607
                                                 --------------  --------------

Stockholders' equity:
  Preferred stock - no par value,
      7,500,000 shares authorized,
      1,475,148 shares issued, 1,474,064
      shares outstanding in 2001 and 2000             5,286,470       5,286,470
   Common stock - no par value,
      45,000,000 shares authorized,
      16,121,701 shares issued, 15,514,952
      shares outstanding in 2001
      10,516,150 shares issued, 10,038,234
      shares outstanding in 2000                     30,680,396      25,180,805
   Additional paid-in capital                        30,693,116      30,693,116
   Subscriptions receivable                          (1,094,057)     (2,457,545)
   Accumulated deficit                              (60,614,922)    (57,441,822)
   Treasury stock at cost, 607,833 shares
      in 2001 and 479,000 shares in 2000               (597,989)       (209,349)
                                                 --------------  --------------

                                                      4,353,014       1,051,675

                                                 $    5,355,711  $    2,186,605
                                                 ==============  ==============

            See notes to condensed consolidated financial statements


                                       10

<PAGE>



                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                       Six-month period
                                                         ended June 30,
                                                   --------------------------
                                                       2001           2000
                                                   -----------    -----------

Sales                                              $   972,334    $   722,311

Cost of goods sold                                     736,252        670,465
                                                   -----------    -----------

Gross profit                                           236,082         51,846
                                                   -----------    -----------

Operating expenses:
   Selling and promotional                             758,100        609,390
   General and administrative                        1,178,849        968,189
   Factory closing charges                             102,643              -
   Research and development                            192,897        128,113
   Depreciation and amortization                       109,630         56,232
   Interest and other                                    8,508         32,786
                                                   -----------    -----------

                                                     2,350,627      1,794,710
                                                   -----------    -----------

Loss from operations before stock-based
   Compensation                                     (2,114,545)    (1,742,864)
                                                   -----------    -----------

Operating expenses paid in stock and warrants:
   Fees and commissions                                850,000         19,158
   Litigation settlement                                     -      4,410,000
                                                   -----------    -----------

                                                       850,000      4,429,158
                                                   -----------    -----------

Loss from continuing operations                     (2,964,545)    (6,172,022)

Discontinued operations                               (208,555)             -
                                                   -----------    -----------

Net loss                                           $(3,173,100)   $(6,172,022)
                                                   ===========    ===========

Loss per common share:
   Continuing operations                           $     (0.23)   $     (0.86)
   Discontinued operations                               (0.02)             -
                                                   -----------    -----------

                                                   $     (0.25)   $     (0.86)
                                                   ===========    ===========

Weighted average shares outstanding                 12,894,186      7,188,095
                                                   ===========    ===========




            See notes to condensed consolidated financial statements

                                       11
<PAGE>


                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

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

Sales                                           $   772,515    $   457,764

Cost of goods sold                                  545,060        443,155
                                                -----------    -----------

Gross profit                                        227,455         14,609
                                                -----------    -----------

Operating expenses:
   Selling and promotional                          408,164        313,205
   General and administrative                       344,062        518,886
   Research and development                         109,954         63,092
   Depreciation and amortization                     74,618         28,116
   Interest and other                                 7,464         16,738
                                                -----------    -----------

                                                    944,262        940,037
                                                -----------    -----------

Loss from operations before stock-based
   Compensation                                    (716,807)      (925,428)
                                                -----------    -----------

Operating expenses paid in stock and warrants:
   Fees and commissions                             835,000              -
                                                -----------    -----------

Loss from continuing operations                  (1,551,807)      (925,428)

Discontinued operations                                   -              -
                                                -----------    -----------

Net loss                                        $(1,551,807)   $  (925,428)
                                                ===========    ===========

Loss per common share:
   Continuing operations                        $     (0.10)   $     (0.12)
   Discontinued operations                                -              -
                                                -----------    -----------

                                                $     (0.10)   $     (0.12)
                                                ===========    ===========

Weighted average shares outstanding              14,926,675      7,555,880
                                                ===========    ===========



            See notes to condensed consolidated financial statements


                                       12

<PAGE>

<TABLE>

                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<CAPTION>
                                                                  Six-month period
                                                                   ended June 30,
                                                              ------------------------
                                                                  2001        2000
                                                              -----------  -----------
<S>                                                           <C>          <C>
Cash flows from operating activities:
   Net loss                                                   $(3,173,100) $(6,172,022)
   Adjustments to reconcile net loss to net cash
      used in operating activities:
         Bad debts                                                 29,000            -
         Depreciation and amortization                            109,630       56,232
         Fees and commissions paid in stock and warrants          850,000       19,158
         Litigation settlement paid in stock and warrants               -    4,410,000
         Debt incurred in litigation settlement                         -      195,000
         Factory closing charges                                  102,643            -
         Changes in operating assets and liabilities:
            (Increase) decrease in accounts receivable           (446,751)    (167,715)
            (Increase) decrease in inventories                    (63,445)     (12,766)
            (Increase) decrease in prepaid expenses
               and other current assets                          (566,742)     (37,993)
            (Increase) decrease in security deposits                8,938        5,050
            Increase (decrease) in accounts payable
               and accrued expenses                               119,260      167,506
                                                              -----------  -----------


                  Net cash used in operating activities        (3,030,567)  (1,537,550)
                                                              -----------  -----------

Cash flows from investing activities:
   Capital expenditures for equipment,
     patents and trademarks                                      (116,613)     (44,001)
   Expenditures from business combination                        (150,000)           -
                                                              -----------  -----------

                 Net cash used in investing activities           (266,613)     (44,001)
                                                              -----------  -----------

Cash flows from financing activities:
   Proceeds from notes payable                                          -      570,000
   Proceeds from shareholder loans                                      -      150,000
   Principal payments under loan agreements                      (119,098)    (164,641)
   Proceeds from issuance of common stock                       4,194,733      131,100
   Proceeds from issuance of preferred stock                            -      913,208
   Purchase of treasury stock                                      (4,540)           -
                                                              -----------  -----------

                 Net cash provided by financing activities      4,071,095    1,599,667
                                                              -----------  -----------

Net increase in cash                                              773,915       18,116

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

Cash, end of period                                            $1,483,266  $   178,302
                                                               ==========  ===========

            See notes to condensed consolidated financial statements

</TABLE>

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<PAGE>


                                V-FORMATION, INC.
                                AND SUBSIDIARIES

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

                                  June 30, 2001


1.   Basis of presentation

     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.  This information should
     be read in  conjunction  with the Company's  Form 8-K filed March 16, 2001.
     The results of operations for the six-month periods ended June 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.   Business combination

     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 business  combination  was accounted for as a
     purchase based on the value of the consideration paid by V-Formation.

                                       14
<PAGE>

5.   Equity transactions

     During  the  six-month  period  ended June 30,  2001,  in  addition  to the
     business combination 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 330,000 shares of common stock as compensation
               for assets and services valued at $990,000.

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

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

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.













                                       15
<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:  August 17, 2001


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




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