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

                                   FORM 10-KSB

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

                  For the Fiscal Year Ended December 31, 2001

                         Commission File Number: 0-27862

                            REALITY INTERACTIVE, INC.

       NEVADA                                            80-0028196
------------------------                  -------------------------------------
 State of Incorporation                   I.R.S. Employer Identification Number

                               2200 Phoenix Tower
                             3200 Southwest Freeway
                                Houston, TX 77027
                                  713-521-0221

Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK,
$.01 PAR VALUE

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulations S-B contained  herein,  and no disclosure will be contained,  to the
best of registrants  knowledge,  in definitive  proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form  10-KSB.  [ X ] The  Company's  revenues  for the  Fiscal  Year  Ended
December  31,  2000  totaled $0. As of May 1, 2002,  the Company had  27,124,927
shares of Common Stock outstanding.  The aggregate market value of the 2,114,927
shares of Common Stock held by  non-affiliates of the Company was $169,194 based
on the closing bid price of $.08 on May 6, 2002 on the Over The Counter Bulletin
Board.

Transitional small business disclosure format:    Yes         No   X


<PAGE>

                                FORM 10-KSB INDEX
                                                                          PART I
                                                                          ------

Item 1.   Description of Business............................................  4
Item 2.   Description of Property............................................  4
Item 3.   Legal Proceedings..................................................  4
Item 4.   Submission of Matters to a Vote of Security Holders................  5

PART II

Item 5.   Market for Common Equity and Related Stockholder  Matters..........  5
Item 6.   Management's Discussion and Analysis of Financial Condition and
          Results of Operation.... ........Y.................................  5
Item 7.   Financial Statements Index.........................................  7
Item 8.   Changes and Disagreements with Accountants on Accounting
          and Financial Disclosure...........................................  7

PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act; Audit Committee
          Report; Audit Fees; Financial Information Systems Design and
          Implementation Fees; All Other Fees...............................   7
Item 10.  Executive Compensation............................................   8
Item 11.  Security Ownership of Certain Beneficial Owners and
          Management........................................................  10
Item 12.  Certain Relationships and Related Transactions....................  10
Item 13.  Exhibits and Reports on Form 8-K..................................  10
SIGNATURES    ..............................................................  14

EXHIBIT INDEX...............................................................
FINANCIAL STATEMENTS........................................................ F-1


<PAGE>

         This Annual Report on Form 10-KSB contains  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
forward-looking  statements  involve risks and uncertainties  that may cause the
Company's actual results to differ  materially from the results discussed in the
forward-looking statements.

         On April 27, 1999,  the Company  announced  that it would cease current
business operations effective April 30, 1999. Management of the Company believes
this action was necessary in light of the Company's  current liquidity needs and
lack of short-term revenue opportunities.

         Since April 30, 1999, the Company had been exploring  potential uses of
its public  shell.  On December 31, 2001,  the Company  executed a  subscription
agreement and letter of Investment Intent with International Venture Capital and
Advisory, Inc. which purchased 66,667 post reverse split shares of the Company=s
common stock at a price of $3.00 per share.  The Company used these  proceeds of
this share sale to pay its outstanding liabilities and accrued expenses.

            On January 23, 2002, Reality  Interactive,  Inc. was incorporated in
the State of Nevada as a wholly-owned  subsidiary of the Company. On January 23,
2002, the Company was merged into Reality Interactive, Inc. a Nevada corporation
(the ASurviving  Company@).  Prior to the merger,  there were 12,491,574  shares
outstanding of the Company.  Upon completion of the merger,  shareholders of the
Company were  entitled to exchange one share of the Company for one share of the
Surviving  Company.  On January 24, 2002, the Surviving Company effected a 1:100
reverse stock split and re-authorized  100,000,000 shares of common stock having
a par value of $.001 per share and 5,000,000  shares of preferred stock having a
par value of $.001 per share.  On February 1, 2002,  acquired  all of the issued
and outstanding shares of Bright Europe Tech, Inc. (Bright),  a British Columbia
Canada  corporation  in exchange for  12,500,000  shares of its common stock and
acquired all of the issued and outstanding shares of Faster Cash ATM, Inc. (ATM)
also a British Columbia Canada  corporation in exchange for 12,500,000 shares of
its common stock.  Bright will operate gaming and lottery  concessions while ATM
will operate  automatic  teller  machines in Eastern  Europe.  As of February 1,
2002,  the Surviving  Company=s  new trading  symbol is RLTI.  Accordingly,  all
references to the number of shares of common stock and to per share  information
in the  financial  statements  have been  adjusted to reflect the reverse  stock
split on a retroactive basis.

            On  February  15,  2002,   the   Surviving   Company  filed  an  S-8
Registration  Statement with the Securities and Exchange  Commission to register
5,000,000  shares of common  stock,  $.001 par value.  The Common  Stock will be
issued by the Surviving  Company pursuant to its Stock Incentive Plan, which has
been  approved by the Board of Directors  of the  Surviving  Company.  The Stock
Incentive  Plan is hoped to  provide  a method  whereby  current  employees  and
officers and non employee  directors and consultants may be stimulated and allow
the Surviving Company to secure and retain highly qualified employees, officers,
directors and  non-employee  directors and  consultants,  thereby  advancing the
interests of the Surviving Company, and all of its shareholders.


                                       3
<PAGE>

                                    PART I

ITEM 1.     DESCRIPTION OF BUSINESS

GENERAL

            Reality  Interactive,  Inc. (the "Company") was  incorporated on May
24, 1994 for the purpose of developing  technology-based knowledge solutions for
the  industrial  marketplace.  On April 30, 1999,  the Company  ceased  business
operations,  sold  substantially  all of its  assets and  terminated  all of its
employees. Management of the Company believes this action was necessary in light
of the Company's liquidity needs and lack of short-term revenue opportunities.

            Since April 30, 1999, the Company has been exploring  potential uses
of its public shell. Until a suitable acquisition candidate can be found for the
public shell, the Company intends to comply with all SEC reporting  requirements
in order to maintain its status as a public  company.  On February 1, 2002,  the
Company acquired all of the issued and outstanding shares of Bright Europe Tech,
Inc. and Faster Cash ATM,  Inc. The future  business of the Company will be from
operating  gaming and lottery  concession  and from operating  automated  teller
machines in Eastern Europe.

            The  Company has  incurred  operating  losses in each  period  since
inception, and has an accumulated deficit of $15,740,617.

            The  Company's  Common  Stock is  currently  traded  on the Over the
Counter  Bulletin Board under the symbol "RLTI".  The Company is not required to
deliver  an annual  report to its  shareholders  and will not  deliver an annual
report to the shareholders.

            You may read and copy any materials  filed with the  Securities  and
Exchange  Commission  ("SEC") by the Company at the SEC's Public  Reference Room
located at 450 Fifth Street N.W.,  Washington,  D.C.  20549, or by logging on to
the  SEC's  website  (http://www.sec.gov),  which  contains  reports,  proxy and
information  statements  and  other  information  regarding  the  Company  filed
electronically.  You may  obtain  information  on the  operation  of the  Public
Reference Room by calling the SEC at 1-800-SEC-0330.

ITEM 2.      DESCRIPTION OF PROPERTY

            The  Company's  executive  office is located  at the law  offices of
Sullins Johnson Rohrback & Magers in Houston,  TX which provides such facilities
at no charge to the Company.

ITEM 3.      LEGAL PROCEEDINGS

             NONE.

                                       4
<PAGE>

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

             NONE.


                                     PART II

ITEM 5.      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

             A.   MARKET PRICE OF COMMON STOCK

            The Company's  common stock trades on the Over the Counter  Bulletin
Board (OTC BB) under the symbol RLTI.  Shares of the Company's  Common Stock are
held by approximately 95 shareholders of record.  The following table sets forth
the high and low prices of the Company's  Common Stock for each calendar quarter
for the past two years.

         Year Ended December 31, 2000          Year Ended December 31, 2001
      Quarter       High          Low       Quarter         High          Low
      -------      ------        -----      --------        -----        -----
     First        $ 0.31           .09       First            .24          .06
     Second       $ 0.15           .03       Second           .12          .06
     Third        $ .013           .06       Third            .09          .05
     Fourth       $  013           .03       Fourth           .06          .03

             The Company has never paid cash  dividends  on its common stock and
does not anticipate paying cash dividends in the foreseeable future.

       B.    CHANGES IN SECURITIES

     On January 24,  2002,  the Company  effected a 1:100  reverse  split of its
shares and re-authorized the par value of $.001, per share.

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION.

            The following  presentation of management's  discussion and analysis
of the Company's  financial condition and results of operation should be read in
conjunction with the Company's  financial  statements and notes contained herein
for the years ended December 31, 200 and 2000.


                                       5
<PAGE>

RESULTS OF OPERATIONS

REVENUES.  Revenues  were $0 for both the  years  ended  December  31,  2000 and
December 31, 2001. This resulted because of 1999 the Company's decision to cease
its business operations effective April 30, 1999.

COST OF REVENUES. Cost of revenues were $0 for both the years ended December 31,
2000 and December 31, 2001. This resulted  because of the Company's  decision to
cease business operations effective April 30, 1999.

OPERATING EXPENSES. The Company's operating expenses for the year ended December
31,  2001 were  $294,705,  compared to  operating  expenses of $52,413 for 2000.
Operating  expenses for 2000 relate  primarily  to costs  incurred to maintain a
small  administrative  office in addition to the costs related to  maintaining a
fully reporting  status with the Securities and Exchange  Commission.  Operating
expenses  for the year ended  December 31, 2001 relate to  consulting  services,
costs  incurred  to maintain a small  administration  office,  costs  related to
maintaining  company and costs  associated  with resolving  certain  outstanding
corporate issues.

            The  Company  expects  that it will  continue  to incur  general and
administrative  expenses  for the year 2001 as it  continues to maintain a small
administrative  office, pursues opportunities for its public shell and maintains
its  status  as a fully  reporting  company  with the  Securities  and  Exchange
Commission.

         GAIN  ON  SALE OF  INTELLECTUAL  PROPERTY.  During  2000,  the  Company
received  $13,105  in  connection  with the sale of one of its  Internet  domain
names.  There  was no gain on the sale of  intellectual  property  or any  other
similar gain for the year ended December 31, 2001.

            INTEREST INCOME. The Company's interest income was $578 for the year
ended  December 31, 2000  compared to interest  income of $15 for the year ended
December 31, 2001. For each year, interest income consisted entirely of interest
earned  on  short-term  investments,  with  the  decrease  between  years  being
attributed to declining cash reserves.

            NET  LOSS.  Net  loss  for the  year  ended  December  31,  2001 was
$294,687,  compared  to a net loss of $38,730  for 2000.  Since the  Company has
ceased business operations,  it does not expect to incur additional  substantial
losses in 2001, except for expenses relating to the operation of a small office,
pursuing opportunities for its public shell and SEC public filing requirements.

LIQUIDITY AND CAPITAL RESOURCES

            The Company's cash and cash equivalents were $266 as of December 31,
2001,  compared to $7,620 as of December 31, 2001 which was partially  offset by
the sale of stock and the payment of stock for certain consulting services. This
decrease in cash was due primarily to the net loss from  operations for the year
ended December 31, 2000.

                                       6
<PAGE>

            The Company  has  sufficient  cash  balances to allow it to meet its
minimal operating  expenditures for the current year.  Therefore,  the Company's
ability to fund future  operations is dependent on the  Company's  identifying a
suitable acquisition candidate or receive proceeds from shareholder loans or the
sale of its common stock.  Without the foregoing,  the Company will be unable to
continue as a going concern.

ITEM 7.     FINANCIAL STATEMENTS

                         INDEX TO FINANCIAL STATEMENTS

                                                                        Page
                                                                        -----

                 Report of Independent Accountants...................    F-2

                 Balance Sheets......................................    F-3

                 Statements of Operations............................    F-4

                 Statements of Stockholders' Equity (Deficit)........    F-5

                 Statements of Cash Flows............................    F-6

                 Notes to Financial Statements...................F-7 to F-11

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

            Virchow, Krause & Company LLP is a successor entity to the Company's
accountants formerly named Lund Koehler Cox and Arkema LLP.
PART III

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

                        DIRECTORS AND EXECUTIVE OFFICERS

     Information regarding the Directors of the Company is set forth below:

         Name                 Age            Offices
         Brian Koehn          53         Chairman of the Board, President and
                                         Chief Executive Officer

                                       7
<PAGE>

Brian  Koehn.  Mr. Koehn  became the Chief  Executive  Officer of the Company in
January  2002.  Since 1990,  he has been a director of  International  Sales and
Marketing of PSI  Services,  Inc. a company which assists small and medium sized
companies with international sales and marketing. Over the past 12 months he has
also worked with a group of Vancouver, British Columbia funeral homes developing
markets for prepaid funerals, insurance and annuity programs.

MEETINGS OF THE BOARD OF DIRECTORS

            During the fiscal year ended December 31, 2001,  there were no Board
of Directors  meetings.  The Board of Directors and its committees also act from
time to time by written consent in lieu of meetings.  The Company currently does
not have an audit, compensation or nominating committee.

See the biographical information for Mr. Koehn under the section ADirectors@.

             SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

            Section  16(a)  of the  Securities  Exchange  Act of  1934  requires
executive  officers and directors and persons who beneficially own more than 10%
of the Company's  Common Stock to file initial  reports of ownership and reports
of changes in ownership  with the Securities  and Exchange  Commission  ("SEC").
Such persons are required by SEC  regulations to furnish the Company with copies
of all Section 16(a) forms they file.

            Based solely on a review of the copies of such Section 16(a) reports
filed by the  Company's  directors,  executive  officers  and  greater  than 10%
shareholders  and written  representations  from such reporting  persons that no
other reports were required to be filed,  the Company  believes that all Section
16(a) filing requirements were met in a timely manner for the fiscal year ending
December 31, 2001.

                             AUDIT COMMITTEE REPORT

         The Company currently does not have a standing audit committee.

ITEM 10.    EXECUTIVE COMPENSATION

            The following table sets forth the compensation awarded to or earned
in fiscal years 1999, 2000 and 2001 by the Company's Chief Executive Officer. No
other  executive  officer of the  Company  earned  salary and bonus in excess of
$100,000 during 2000.

                                       8
<PAGE>

                           SUMMARY COMPENSATION TABLE

                                                        Annual Compensation
Name                          Fiscal Year    Salary (1)       Bonus
Paul J. Wendorf                  2001           $ 0           $ 0
Former President
and Chief Executive Officer      2000             0             0
                                 1999        48,442             0

None of the new officers or directors received compensation of any.

(1)  The  compensation to Mr. Wendorff for fiscal year 1999 represents  payments
     made through April 30, 1999, the effective date of the Company's  cessation
     of business operations.

                                       9
<PAGE>

(2)  All options granted to Mr. Wendorff for the years indicated  presented have
     expired.

                        OPTION GRANTS IN LAST FISCAL YEAR

     No options  were  granted to the  executive  officer  named in the  Summary
Compensation Table above during fiscal year 2000.

OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES

     No options were  exercised by the  executive  officer  named in the Summary
Compensation Table above during fiscal year 2001. The executive officer named in
the Summary  Compensation  Table does not hold any options to purchase shares of
the Company's Common Stock.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                             PRINCIPAL SHAREHOLDERS

The following  table sets forth certain  information  with respect to beneficial
ownership of the Company's  Common Stock as of May 1, 2002 by: (i) each director
of the Company,  (ii) each executive officer of the Company named in the Summary
Compensation Table, (iii) all directors and executive officers of the Company as
a group and (iv) each person or entity known by the Company to own  beneficially
more than 5% of the Company's  Common Stock.  Unless noted below, the address of
each of the following shareholders is the same as the Company.
                                                                Beneficial Owner
Name and Address of Beneficial Owner                   Shares        Percentage
-------------------------------------                 ---------     ------------
Bright Europe Tech, Inc.                              12,500,000       46.08%
Faster Cash ATM, Inc.                                 12,500,000       46.08%
Brian Koehn                                               10,000        .037%

All directors and executive officers as a group
(1 persons)                                               10,000        .037%

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Index of Exhibits

                                       10
<PAGE>

     Exhibit
     Number       Description
     ------       ----------------------------------------------------------
       3.1(1)     Articles of Incorporation of the Company
       3.2(1)     Amended and Restated Articles of Incorporation of the Company
       3.3(1)     Bylaws of the Company
       3.4(1)     Amended Bylaws of the Company
       4.1(1)     Specimen form of the Company's Common Stock Certificate
       4.2(1)     Warrant Agreement (including Form of Redeemable Warrant)
       4.3(1)     Form of Bridge Loan Agreement, dated January 19, 1996,
                  between the Company and various investors (including form
                  of Bridge Note and Bridge Warrant)
       4.4(1)     Canceled Promissory Note in favor of Brightstone Fund VI
                  in the amount of $200,000
       4.5(1)     Canceled Promissory Note in favor of Wyncrest Capital,
                  Inc. in the amount of $120,000
       4.6(1)     Warrant in favor of Brightstone Fund VI for 43,109 shares
       4.7(1)     Warrant in favor of Wyncrest Capital, Inc. for 25,188
                  shares
      10.1(1)     ISO 9000 Content Agreement between Reality Interactive,
                  Inc. and Process Management International, dated August 4,
                  1994
      10.2(1)     Joint Marketing and Distribution Agreement between Reality
                  Interactive, Inc. and American Society for Quality
                  Control, Inc., dated May 10, 1995
      10.3(1)     Agreement for Consulting Services between Reality
                  Interactive, Inc. and Steven W. McClernon, dated January
                  15, 1996
      10.4(1)     Sublease Agreement between Reality Interactive, Inc. and
                  Collopy Saunders Real Estate, Inc., dated December 15,
                  1994
      10.5(1)     Subject Matter Expert Agreement between Reality
                  Interactive, Inc. and The Third Generation, Inc., dated
                  January 6, 1996
      10.6(1)     Subject Matter Expert Agreement between Reality
                  Interactive, Inc. and WRITAR, dated February 1, 1996
      10.7(1)     Reality Systems, Inc. 1994 Stock Incentive Plan, as
                  amended (including form of Stock Option Agreement)
      10.8(1)     Form of Non-Statutory Directors' Option Agreement (issued
                  to certain non-employee directors or affiliates of
                  non-employee directors in 1994 and 1995)

                                       11
<PAGE>

     10.9(1)     Reality Interactive, Inc. 1996 Directors Stock Option Plan
                 (including form of Directors Stock Option Agreement)

     10.10(1)    Form of Shrink-Wrap License Agreement
     10.11(1)    Form of Enterprise License Agreement
     10.12(1)    Form of Volume Discount Agreement
     10.13(1)    ISO 9000/QS-9000 Addendum, dated March 13, 1996, between
                 the Company and Process Management Institute, Inc.,
                 amending the agreement dated August 4, 1994
     10.14(1)    Form of Lock-Up Agreement
     10.15(1)    Independent Software Vendor Agreement between the Company
                 and Hewlett Packard
     10.16(1)     Master Equipment Lease Agreement, dated June 15, 1995, and
                  Amendment No. 1 to Master Equipment Lease Agreement, dated
                  July 1995, each between the Company and Carlton Financial
                  Corporation
     10.17(1)     Lease Agreement, dated January 30, 1996, between the
                  Company and Lease Finance Group, Inc.
     10.18(1)     Irrevocable  Letters  of Credit,  dated June 20,  1995 and
                  August  1,  1995,  from  BankWindsor  in favor of  Carlton
                  Financial  Corp. and Irrevocable  Letter of Credit,  dated
                  December 27, 1995, in favor of Lease Finance Group, Inc.
     10.19(2)     First Amendment to Joint Marketing and Distribution
                  Agreement between Reality Interactive, Inc. and American
                  Society for Quality Control, Inc., dated May 1, 1996
     10.20(2)     Joint Marketing and Distribution Agreement between Reality
                  Interactive, Inc. and American Society for Quality
                  Control, Inc., dated May 17, 1996
     10.21(3)     Equipment Lease between Reality Interactive, Inc. and
                  Dexxon Capital Corporation Dated June 3, 1996
     10.22(4)     Copyright License Agreement between Reality Interactive,
                  Inc. and the American National Standards Institute dated
                  August 30, 1996, including Modifying Agreement
     10.23(4)     ISO 14000 Marketing and Promotion Agreement between
                  Reality Interactive, Inc. and the American National
                  Standards Institute dated September 20, 1996
     10.24(4)     ISO 14000 Marketing and Promotion Agreement between
                  Reality Interactive, Inc. and the Global Environment and
                  Technology Foundation dated September 6, 1996

                                       12
<PAGE>

     10.25(4)     Distribution Agreement between Reality Interactive, Inc.
                  and Futuremedia PLC dated July 12, 1996
     10.26(5)     Sublease Agreement between Reality Interactive, Inc. and
                  IVI Publishing, Inc., dated September 17, 1996
     10.27(5)     Distribution Agreement between Reality Interactive, Inc.
                  and Lasermedia (Deutschland) GMBH, dated October 9, 1996

     10.28(5)     Amendment No. 2, dated December 9, 1996, to Master
                  Equipment Lease Agreement, dated July 1995, each between
                  the Reality Interactive, Inc. and Carlton Financial
                  Corporation
     10.29(5)     Irrevocable Letter of Credit, dated December 9, 1996, from
                  BankWindsor in favor of Carlton Financial Corp.
     10.30(6)     Master Distribution Agreement between Reality Interactive,
                  Inc. and Interactive Media Communications, dated February
                  24, 1997
     10.31(6)     Multinational Copyright Exploitation Agreement between
                  Reality Interactive, Inc. and the International
                  Organization for Standardization, dated February 17, 1997
     10.32(6)     Multinational Copyright Exploitation Agreement between
                  Reality Interactive, Inc. and the International
                  Organization for Standardization, dated February 17, 1997
     10.33(7)     Asset Purchase Agreement between Reality Interactive, Inc.
                  and VirtualFund.com, Inc., dated June 18, 1999
     10.34(7)     Credit Agreement between Reality Interactive, Inc. and
                  VirtualFund.com, Inc., dated May 28, 1999
     10.35(7)     Form of Demand Note between Reality Interactive, Inc. and
                  VirtualFund, Inc., dated May 28, 1999
     10.36(7)     Security Agreement between Reality Interactive, Inc. and
                  VirtualFund, Inc., dated May 28, 1999
     23.1         Consent of Virchow, Krause & Company, LLP
     99.1         Cautionary Statement

(1)  Incorporated by reference to Amendment No. 2 to the Company's  Registration
     Statement on Form SB-2 (File No. 333-01508C),  as filed with the Securities
     and Exchange Commission on April 9, 1996.

(2)  Incorporated  by  reference  to the  Company's  Form 10-QSB for the quarter
     ended March 31, 1996.

                                       13
<PAGE>

(3)  Incorporated  by  reference  to the  Company's  Form 10-QSB for the quarter
     ended June 30, 1996.

(4)  Incorporated  by  reference  to the  Company's  Form 10-QSB for the quarter
     ended September 30, 1996.

(5)  Incorporated  by reference to the Company's  Form 10-KSB for the year ended
     December 31, 1996.

(6)  Incorporated  by  reference  to the  Company's  Form 10-QSB for the quarter
     ended March 31, 1997.

(7)  Incorporated  by reference to the  Company's  Preliminary  Proxy  Statement
     filed June 28, 1999.

(b)      Reports on Form 8-K

         NONE.

                                   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.

                                                 REALITY INTERACTIVE, INC.

Dated:   May 7, 2002                      By  /s/ Brian Koehn
                                             --------------------------------
                                                 Brian Koehn
                                                 Chief Executive Officer and
                                                 Chief Financial Officer

            Pursuant to the requirements of 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.

        Name                  Title                                  Date
       ------                --------                               -------

                          Chief Executive Officer,
------------------------  President, Secretary / Treasurer       May ___, 2002
Brian Koehn               and Director


                                       14
<PAGE>


ITEM 7.     FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page
                                                                           -----

   Report of Independent Accountants...................................      F-2

   Balance Sheets.....................................................       F-3

   Statements of Operations...........................................       F-4

   Statements of Stockholders' Equity (Deficit).......................       F-5

   Statements of Cash Flows...........................................       F-6

   Notes to Financial Statements.....................................F-7 to F-11


                                       15
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Reality Interactive, Inc.:

We have audited the accompanying balance sheets of Reality Interactive,  Inc. as
of  December  31,  2001 and 2000,  and the  related  statements  of  operations,
stockholders'  deficit 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 audits.

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 Reality Interactive, Inc. as of
December 31, 2001 and 2000, 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.

The accompanying  financial  statements have been prepared assuming that Reality
Interactive,  Inc. will continue as a going  concern.  As discussed in Note 1 to
the  financial  statements,  Reality  Interactive,  Inc. has suffered  recurring
losses from  operations  and has a significant  accumulated  deficit that raises
substantial doubt about its ability to continue as a going concern. Management's
plans  in  regard  to  these  matters  are  also  described  in Note 1. The 2001
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


                                                VIRCHOW, KRAUSE & COMPANY, LLP



Minneapolis, Minnesota
March 14, 2002



                                       F-2

<PAGE>

                           DECEMBER 31, 2001 AND 2000
<TABLE>

                                                                    2001          2000
                                                                   ------        ------
<S>                                                                <C>          <C>

              ASSETS
Current assets:
  Cash                                                           $      266   $    7,620
  Other current assets                                                    0          895
    Total current assets                                                266        8,515
                                                                 $      266   $    8,515
                                                                  ==========   ==========
         LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable                                               $    8,867   $    13,026
  Accrued liabilities                                                     0         7,953
    Total current liabilities                                         8,867        20,979
Stockholders' deficit:
  Common stock, $.001 par value, 100,000,000 shares authorized,
   124,916 and 46,774 shares issued and outstanding                       125          47
  Additional paid-in capital                                       15,731,891  15,433,419
  Accumulated deficit                                             (15,740,617)(15,445,930)
    Total stockholders' deficit                                        (8,601)    (12,464)
                                                                 $        266  $    8,515
                                                                  ============ ============
</TABLE>


                 See accompanying notes to financial statements.
                                      F-3
<PAGE>

                            REALITY INTERACTIVE, INC.
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

                                                          2001       2000
                                                         ------     ------
Revenues                                              $       0   $      0
Cost of revenues                                              0          0
                                                       ---------   --------
Gross profit                                                  0          0
                                                       ---------   --------
Operating expenses:
  General and administrative                            294,705     52,413
                                                       ---------   --------
    Total operating expenses                            294,705     52,413
                                                       ---------   --------
Loss from operations                                   (294,705)   (52,413)
                                                       ---------   --------
 Gain on sale of intellectual property                        0     13,105
  Interest income                                            18        578
                                                       ---------   --------
    Total other income (expense)                             18     13,683
                                                       ---------   --------
Net loss                                              $(294,687)  $(38,730)
                                                       =========   ========
Basic and diluted loss per share                      $   (5.36)  $  (0.83)
                                                       =========   ========
Weighted average common shares outstanding               54,974     46,774
                                                       =========   ========


                 See accompanying notes to financial statements.
                                      F-4
<PAGE>

                            REALITY INTERACTIVE, INC.
                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
<TABLE>


                                                                           Additional
                                                      Common Stock          Paid-in          Accumulated
                                                   Shares      Amount       Capital            Deficit          Total
                                                  ---------   --------    ------------      -------------      -------
<S>                                               <C>         <C>         <C>               <C>                <C>

Balance - December 31, 1999                       46,774     $      47    $15,433,419     $ (15,407,200)   $    26,266

  Net loss                                            --           --              --           (38,730)       (38,730)
Balance - December 31, 2000                       46,774            47     15,433,419       (15,445,930)       (12,464)
  Common stock issued for consulting services     11,475            11         98,539                           98,550
  Common stock sold in a private placement        66,667            67        199,933                          200,000
  Net loss                                            --           --              --          (294,687)      (294,687)
Balance - December 31, 2001                      124,916     $     125    $15,731,891     $ (15,740,617)   $    (8,601)
                                                =========    ==========  =============     =============    ===========
</TABLE>



       See accompanying notes to financial statements.
                                      F-5
<PAGE>

                            REALITY INTERACTIVE, INC.
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

                                                            2001         2000
                                                           ------       -------
Cash flows from operating activities:
Net loss                                               $ (294,687)   $  (38,730)
Adjustments to reconcile net loss to cash flows from
  operating activities:
     Common stock issued for consulting services           98,550             0
     Gain on disposal of intellectual property                  0       (13,105)
  Changes in operating assets and liabilities:
     Other current assets                                     895         2,026
     Accounts payable                                      (4,159)        3,338
     Accrued liabilities                                   (7,953)            0
      Cash flows from operating activities               (207,354)      (46,471)
Cash flows from investing activities:
  Proceeds from sale of intellectual property                   0        13,105
      Cash flows from investing activities                      0        13,105
Cash flows from financing activities:
  Proceeds from sale of common stock                      200,000             0
      Cash flows from financing activities                200,000             0
Decrease in cash                                           (7,354)      (33,366)
Cash, beginning of year                                     7,620        40,986
Cash, end of year                                      $      266    $    7,620
                                                        ==========     =========


                    See accompanying notes to financial statements.
                                      F-6

<PAGE>

REALITY INTERACTIVE, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000


1.   Organization and Status

     Reality Interactive,  Inc. (the "Company") was incorporated in Minnesota on
     May 24,  1994 for the  purpose  of  developing  technology-based  knowledge
     solutions for the corporate marketplace.

     On April 30, 1999,  the Company ceased  business  operations and terminated
     all  remaining  employees.  This  action  was  necessary  in  light  of the
     Company's liquidity needs and lack of revenue opportunities.

     On December 31, 2001,  the Company  executed a  Subscription  Agreement and
     Letter of Investment Intent (the "Investment")  with International  Venture
     Capital and Advisory, Inc. (the "Investor"), whereby the Investor agreed to
     purchase  66,667 shares of the  Company's  common stock at a price of $3.00
     per share. As a result of the  Investment,  the Investor owns 53.37% of the
     Company's  issued  and  outstanding  common  stock.  The  Company  used the
     proceeds of the Investment to pay its  outstanding  liabilities and accrued
     expenses. Currently, the Investor is exploring potential uses of the public
     shell. As the controlling  shareholder of the Company, the Investor intends
     to comply with all future SEC reporting  requirements  in order to maintain
     the Company's status as a public company.


2.   Summary of Significant Accounting Policies

     Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  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 revenue and expenses during the reporting period. Actual results
     could differ from those estimates.

     Cash

     The  Company  maintains  its cash in bank  deposit  accounts at a financial
     institution  with high credit quality.  The balances,  at times, may exceed
     federally insured limits.

     Income Taxes

     The Company  utilizes the liability  method of accounting for income taxes.
     Deferred tax assets and  liabilities are recognized for the expected future
     tax  consequences   attributable  to  temporary   differences  between  the
     financial   statement  and  income  tax  reporting   bases  of  assets  and
     liabilities.


                                       F-7
<PAGE>


     Net Loss Per Share

     The Company  accounts  for loss per share as required  under  Statement  of
     Financial  Accounting  Standards  No. 128,  "Earnings  Per Share" (SFAS No.
     128). SFAS No. 128 requires dual presentation of basic and diluted loss per
     share for entities with complex  capital  structures.  Basic loss per share
     includes no dilution  and is computed  by dividing  net loss  available  to
     common  stockholders  by the  weighted  average  number  of  common  shares
     outstanding  for the period.  Diluted loss per share reflects the potential
     dilution of securities that could share in the earnings of an entity and is
     similar to the former  fully  diluted loss per share  calculation.  For the
     years ended  December  31, 2001 and 2000,  basic and diluted loss per share
     for the Company is the same  because the Company has no  outstanding  stock
     options and warrants.

     Fair Value of Financial Instruments

     The carrying amounts for all financial instruments  approximate fair value.
     The carrying  amounts for cash and cash  equivalents,  accounts payable and
     accrued liabilities approximate fair value because of the short maturity of
     these instruments.

     New accounting pronouncements

     SFAS  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
     Activities,"  as amended,  is effective for years  beginning after June 15,
     2000. SFAS No. 133 establishes accounting and reporting standards requiring
     that every derivative instrument,  including certain derivative instruments
     embedded in other contracts,  be recorded in the balance sheet as either an
     asset or liability  measured at its fair value.  SFAS No. 133 requires that
     changes in the derivative's fair value be recognized  currently in earnings
     unless specific hedge criteria are met.  Special  accounting for qualifying
     hedges allows a derivative's  gains or losses to offset related  results on
     the hedged item in the statement of operations  and requires that a company
     must  formally   document,   designate  and  assess  the  effectiveness  of
     transactions  that receive hedge  accounting.  The adoption of SFAS No. 133
     did not have a  material  effect on the  Company's  financial  position  or
     results of operations.

     In June 2001, the Financial  Accounting  Standards Board (FASB) issued SFAS
     No.   141   "Business   Combinations."   SFAS  No.   141   eliminates   the
     pooling-of-interests  method of accounting for business combinations except
     for qualifying  business  combinations that were initiated prior to July 1,
     2001. In addition, SFAS No. 141 further clarifies the criteria to recognize
     intangible  assets  separately from goodwill.  The requirements of SFAS No.
     141  are  effective  for  any  business  combination  accounted  for by the
     purchase  method  that is  completed  after June 30,  2001.  The Company is
     evaluating the impact of this new accounting standard.

     In June 2001, the FASB issued SFAS No. 142,  "Goodwill and Other Intangible
     Assets." SFAS No. 142 discontinues  the  amortization of recorded  goodwill
     for fiscal years beginning after December 15, 2001. In the future, goodwill
     will be reduced based upon an impairment analysis of the amount recorded on
     the Company's books. To the extent it has been determined that the carrying
     value of goodwill  is not  recoverable  and is in excess of fair value,  an
     impairment  loss  will be  recognized.  Impairment  will be  reviewed  on a
     periodic basis based on its fair value.  Currently the adoption of SFAS No.
     142 will not have an impact of the Company's  financial position or results
     of operations.


                                       F-8
<PAGE>

     In June  2001,  the  FASB  issued  SFAS  No.  143.  "Accounting  for  Asset
     Retirement  Obligations."  SFAS  No.  143 is  effective  for  fiscal  years
     beginning  after June 15, 2002.  The Company  believes the adoption of SFAS
     No. 143 will not have a material effect on the Company's financial position
     or results of operations.

     In  October  2001,  the  FASB  issued  SFAS  No.  144  "Accounting  for the
     Impairment or Disposal of Long-Lived  Assets." SFAS No. 144 supercedes SFAS
     No. 121. SFAS 144 primarily  addresses  significant  issues relating to the
     implementation  of SFAS 121 and  develops  a single  accounting  model  for
     long-lived  assets to be disposed of, whether primarily held, used or newly
     acquired.  The  provisions  of SFAS 144 will be effective  for fiscal years
     beginning after December 15, 2001. The provisions of SFAS No. 144 generally
     are to be applied prospectively.  The Company believes the adoption of SFAS
     No. 144 will not have a material effect on the Company's financial position
     or results of operations.

3.   Income Taxes

     Significant components of the Company's deferred tax assets are as follows:


                                                           December 31,
                                                       2001             2000
                                                       ----             ----

       Deferred tax assets:
         Net operating loss carryforwards         $  6,300,000  $  6,150,000
         Other                                               -        50,000
                                                  ------------   -------------
              Total deferred tax assets              6,300,000     6,200,000

       Less valuation allowance                     (6,300,000)   (6,200,000)
                                                  ------------   -------------
       Net deferred tax assets                    $          -  $          -
                                                  ============  ==============

     At December 31, 2001, the Company had net operating loss  carryforwards  of
     approximately  $15,650,000 for income tax purposes.  The net operating loss
     carryforwards expire in 2009 through 2021 if not previously utilized.

     The Company has  determined,  based on the weight of available  evidence at
     December 31, 2001,  that it is more likely than not the Company's  deferred
     tax assets will not be realized.  Accordingly,  a valuation  allowance  has
     been established for the tax benefits of these items. Future utilization of
     the available net operating loss  carryforwards  may be limited due to past
     changes in  ownership  under  Internal  Revenue Code Section 382 and future
     significant changes in ownership.

4.   Commitment

     Leases

     During 2001, the Company leased office space and equipment under short-term
     operating lease agreements.  At December 31, 2001, the Company's  operating
     lease agreements had expired.

     Rent  expense  was  approximately  $10,446  and $13,419 for the years ended
     December 31, 2001 and 2000, respectively.


                                       F-9
<PAGE>

5.   Stockholders' Equity

     Common Stock Issued

     The holders of Common  Stock are entitled to one vote for each share on all
     matters  submitted to a vote of stockholders.  Holders of Common Stock have
     no  preemptive,   subscription  or  conversion  rights  and  there  are  no
     redemption or sinking fund provisions  applicable thereto.  The outstanding
     shares of Common Stock are fully paid and nonassessable.

     On April 24,  2001,  the Company  issued  10,305  shares of common stock to
     Knowledge Integrators,  Inc. as payment for consulting services provided to
     the Company. Knowledge Integrators, Inc. is 100% owned by Paul J. Wendorff,
     who is also the  Company's  Chief  Executive  Officer  and a  Director.  In
     addition,  on April 24,  2001,  the Company  issued  1,170 shares of common
     stock to Wesley W. Winnekins as payment for consulting services provided to
     the  Company.  Wesley W.  Winnekins is currently a Director of the Company.
     The value of the  services  provided by  Knowledge  Integrators,  Inc.  and
     Wesley W. Winnekins was $98,550 based on the fair value of the common stock
     issued.

     On December 31, 2001, the Company issued 66,667 shares of common stock at a
     price of $3.00 per share in connection with the execution of a Subscription
     Agreement and Letter of Investment  Intent. As a result of this Investment,
     the Investor owns 53.37% of the  Company's  issued and  outstanding  common
     stock.

     Warrants

     A summary of the Company's warrant activity is as follows:

                                                          Exercise
                                             Number        Price     Expiration
                                            --------      ---------  ----------

       Outstanding at December 31, 1999      27,983      $240-$800    2000-2001

       Expired                              (27,983)     $240-$800     4/10/00
                                         -----------

       Outstanding at December 31, 2000           0
                                         ===========

       Outstanding at December 31, 2001           0
                                         ==========

       The Company  issued such  warrants in connection  with various  financing
       transactions.  The holders of these  warrants  are not  entitled to vote,
       receive  dividends or exercise any other rights until such  warrants have
       been duly  exercised and payment of the purchase price has been made. All
       warrants were expired as of December 31, 2000.



                                      F-10

<PAGE>

       Stock Options

       At  December  31,  2001,  the Company  had 7,000  shares of common  stock
       reserved  under its 1994 Stock  Incentive  Plan.  The plan  provides  for
       grants of incentive and nonqualified stock options to officers, employees
       and  independent   contractors.   Furthermore,   the  Company  may  grant
       nonqualified  options outside of this plan. These stock options generally
       vest  evenly over a three to four year  period and are  exercisable  over
       periods up to five years from date of grant. In addition, the Company had
       4,000 shares of common stock  reserved  under its 1996  Directors'  Stock
       Option Plan.  This plan provides for annual grants of options to purchase
       100  shares of Common  Stock per  director  per year and vests six months
       from the date of grant.

       The Board of  Directors  establishes  all terms  and  conditions  of each
       grant.  Stock  options  are  granted  at or above  fair  market  value as
       determined by the Board of Directors at each grant date.

       For the years ended  December  31,  2001 and 2000,  there were no options
       granted or outstanding under the plans. As a result,  the Company has not
       recognized  any  compensation   expense  for  the  periods  presented  as
       prescribed by SFAS No. 123, "Accounting for Stock-Based Compensation."

6.     Subsequent Events

       On January 23, 2002,  Reality  Interactive,  Inc. was incorporated in the
       State of Nevada as a wholly-owned  subsidiary of the Company.  On January
       23, 2002, the Company was merged into Reality Interactive, Inc., a Nevada
       corporation (the "Surviving  Company").  Prior to the merger,  there were
       12,491,574  shares  outstanding  of the Company.  Upon  completion of the
       merger,  shareholders  of the Company were entitled to exchange one share
       of the Company  for one share of the  Surviving  Company.  On January 24,
       2002,  the  Surviving  Company  effected a 1:100  reverse stock split and
       re-authorized  100,000,000  shares of common  stock having a par value of
       $.001 per share and  5,000,000  shares of  preferred  stock  having a par
       value of $.001 per share. As of February 1, 2002, the Surviving Company's
       new trading symbol is RLTI. Accordingly,  all references to the number of
       shares of common  stock and to per  share  information  in the  financial
       statements  have been  adjusted to reflect  the reverse  stock split on a
       retroactive basis.

       On February 15, 2002,  the Surviving  Company  filed an S-8  Registration
       Statement  with  the  Securities  and  Exchange  Commission  to  register
       5,000,000 shares of common stock,  $.001 par value. The Common Stock will
       be issued by the Surviving  Company pursuant to its Stock Incentive Plan,
       which  has been  approved  by the  Board of  Directors  of the  Surviving
       Company.  The Stock  Incentive  Plan is hoped to provide a method whereby
       current employees and officers and non employee directors and consultants
       may be stimulated  and allow the  Surviving  Company to secure and retain
       highly  qualified  employees,   officers,   directors  and  non  employee
       directors  and  consultants,  thereby  advancing  the  interests  of  the
       Surviving Company, and all of its shareholders.

                                      F-11