U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB

[X]  Annual report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 for the fiscal year ended September 30, 2001

[ ]  Transition report under Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the transition period from      to
                                               ------  ------

                       Commission File Number: 33-19345-LA

                         VPN COMMUNICATIONS CORPORATION
                  --------------------------------------------
                 (Name of small business issuer in its charter)

            Nevada                                        93-0943718
 -----------------------------                  ------------------------------
(State or other jurisdiction of                (I.R.S. Federal Employer ID No.)
 incorporation or organization)

          3941 S. Bristol St. Unit E, Santa Ana, California    92704
                --------------------------------------        -------
               (Address of principal executive offices)      (Zip Code)

                    Issuer's telephone number: (749) 500-8032

         Securities registered under Section 12(b) of the Exchange Act:

    Title of each class              Name of exchange on which registered
    -------------------              ------------------------------------
           N/A                                        N/A

         Securities registered under Section 12(g) of the Exchange Act:
                           Common Stock, $0.001 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 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
                                     -----   -----

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

         The issuer's revenues for its most recent fiscal year: $55,875

    The aggregate market value of voting stock held by non-affiliates of the
registrant as of January 9, 2002:

                    Common stock, $0.001 par value: $202,088

     The number of shares of the registrant's common stock outstanding as
January 9, 2002: 5,787,043 shares

    Documents incorporated by reference: As listed under Item 13(a) Exhibits.

        Transitional Small Business Disclosure Format: Yes     No  X
                                                          -----  -----

<PAGE>


                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS
---------------------------------
History and Organization
------------------------
VPN Communications Corporation, formerly Exhibitronix, Inc., was organized under
the laws of the State of Nevada on September 29, 1986, for the primary purpose
of seeking selected mergers or acquisitions with a small number of business
entitles expected to be private companies, partnerships, or sole
proprietorships. In November of 1988, the Company completed the first of its
three business combination transactions, through a merger with Mimetics, Inc., a
California corporation, following which the Company changed its name to
Exhibitronix, Inc. Thereafter, the Company had a total of three subsidiaries
Tabery Corporation, Shows Up, and Modular Display Systems, Inc. The Company
divested one half of Modular Display Systems, Inc., in 1991; the Tabery
Corporation filed for protection under Chapter 7 or the United Stated Bankruptcy
Code in 1991. During 1990 and 1991, the Company disposed of all of its assets to
satisfy its creditors and, between 1991 and April of 2000 conducted no
operations.

Commencing the first quarter of 1997, the Company began to engage in preliminary
efforts intended to identify possible merger or acquisition "targets." Following
a change of control of ownership, on March 2, 2000 the Company changed its name
to VPN Communications Corporation and a Certificate of Amendment to Articles of
Incorporation was filed with the Secretary of State of Nevada on March 10, 2000.

On April 19, 2000, the Company entered into an Agreement and Plan of
Reorganization with VPNCOM.NET Corporation, a Nevada corporation ("VCNC") and
the stockholders of VCNC, and consummated a transaction with VCNC and its
stockholders, whereby the Company acquired all of the outstanding stock of VCNC,
which became a wholly-owned subsidiary of the Company.

VCNC is a provider of integrated communications involving the provision of
virtual private network and Internet solutions for corporations and
multi-dwelling unit properties and entities. All assets of VCNC, including, but
not limited to, its tangible assets, such as computers, servers, and related
telecommunications equipment, as well as its non-tangible assets such as
contracts, on-going business relationships, and "goodwill," were included in the
acquisition.

In exchange for the stock of VCNC, the Company issued 1,500,000 shares of its
Common Stock to the selling stockholders of VCNC. The valuation of the exchange
was based upon VCNC's historical financial statements, assets and liabilities,
historical operations, and the value of the Common Stock of the Company at the
time negotiations began, with a 15% discount from the then market price of the
Common Stock in consideration of the restricted nature of the securities issued.

E. G. Marchi, Chief Executive Officer, President and a Director of the Company,
received 1,300,000 shares of Common Stock of the Company as a selling
stockholder of VCNC. Theodore A. Bohrer, Secretary, Chief Financial Officer,
Chief Accounting Officer and a Director of the Company, received 100,000 shares
of Common Stock of the Company as a selling stockholder. The remaining selling
stockholder, Richard E. Floegel, a party otherwise unrelated to the Company,
received 100,000 shares of Common Stock of the Company.

VCNC engaged in the business of providing last mile Internet and
telecommunications connectivity to multi-unit residential complexes, hotels, and
convention centers. It developed relationships with complementary suppliers so
that it could provide complete Internet/telecommunications services both
permanently (for apartment complexes) and temporarily (for convention centers).

                                       2

<PAGE>


VCNC engaged in the business of web broadcasting. It developed relationships
with appropriate entities to broadcast National Football League games on the
Internet.

Due to changes on the marketplace and the upheaval surrounding "dot com"
ventures, the Company elected to divest itself of VCNC, it's wholly owned
subsidiary.

On November 6, 2000, VPN Communications Corporation (the Company) entered into
an Enforceable Letter of Intent with Paul Stevens, a related party, to sell to
Mr. Stevens 1,500 shares, which constitutes all of the issued shares, of the
Company's wholly owned Subsidiary VCNC.

On June 13, 20001, the VPN Communications Corporation (the "Company) rescinded
the enforceable letter of intent to divest itself of its wholly owned subsidiary
and only operating unit, VPNCOM.net Corporation.

On August 1, 2001 the Company entered into an agreement to purchase all of the
outstanding shares of Omnetrix International of Colorado (OMXI). The Company
exchanged shares with the shareholders of OMXI on a one for one basis after a
1:9 reverse split of the Company's shares. The Company's common stock was
selling for $0.10 per share on August 8, 2001.

On August 7, 2001 the Company signed an agreement to sell to VCC Corporation, an
unrelated entity, 1,500 shares, which constitutes all of the issued shares, of
the Company's wholly owned Subsidiary VPNCOM.net (the Subsidiary).

The Company received, in exchange for the Subsidiary, $1 and indemnification, by
VCC Corporation, against all claims arising from the outstanding liabilities of
the Subsidiary in the amount of $ 645,079. As of the date of this transaction
the Subsidiary had no on-going revenue and was producing no profit.

On October 25, 20001, VPN Communications Corporation (the "Company") rescinded
the reverse acquisition of Omnetrix International, a Colorado Corporation. All
stock that was issued in connection with the reverse acquisition was cancelled.

As of the filing of this 10K, the Company is actively engaged in efforts
intended to identify new merger or acquisition "targets." It is the Company's
intention to seek these candidates in the areas of technology or
telecommunications. These types of companies, management feels, are in keeping
with the direction the Company has been going and with the expertise it has
developed. Additionally, the company has entered into a joint venture with
Investors Millennium Management, Inc. ("IMM"). This joint venture is engaged in
the business of providing financial resources to emerging companies in the
telecommunications, biotechnology, security, and disaster recovery businesses.
To support this joint venture the Company has issued 3,000,000 shares of its
common stock, $0.001 par value. This stock will be used by the joint venture to
guarantee loans made to unrelated third parties engaged in the targeted
industries.

Plan Of Operations
------------------
The Company has, and expects to have for the foreseeable future, insufficient
capital with which to provide merger or acquisition candidates substantial cash
or other assets. Management believes the Company will offer owners of potential
merger or acquisition candidates the opportunity to acquire a controlling
ownership interest in a public company at substantially less cost than would be
required for them to conduct an initial public offering. A target company will,
however, incur significant post merger or acquisition registration costs in the
event target company shareholders wish to offer a portion of their shares for
subsequent sale.

                                       3

<PAGE>


Further, while target company shareholders will receive "restricted securities"
in any merger or acquisition transaction, those restricted securities will
represent, if a trading market develops for the Company's common stock,
ownership in a "publicly traded" as opposed to a "privately held" company.
Management also believes target company shareholders may benefit in obtaining a
greater ownership percentage in the Company remaining after a merger or
acquisition than may be the case in the event a target company offered it shares
directly for sale to the public. Nevertheless, the officers and directors of the
Company have not conducted market research and are not aware of statistical
data, which would support the perceived benefits of a merger or acquisition
transaction for target company shareholders.

Management has not identified more specifically that mentioned
(telecommunications, biotechnology, security, disaster recovery businesses,
etc.) any particular area of interest within which the Company will concentrate
its efforts.

Management contemplates that the Company will seek to merge with or acquire a
target company with either assets or earnings, or both, and that preliminary
evaluations undertaken by the Company will assist in identifying possible target
companies. The Company has not established a specific level of earnings or
assets below which the Company would not consider a merger or acquisition with a
target company. Moreover, management may identify a target company, which is
generating losses, which it will seek to acquire or merge with the Company. The
merger with or acquisition of a target company which is generating losses or
which has negative shareholders' equity may have a material adverse effect on
the price of the Company's Common Shares.

Plan of Acquisition
-------------------
The Company intends to use the following approach to identify its most suitable
acquisition candidates.

Management intends to concentrate on identifying any number of preliminary
prospects that may be brought to their attention through present associations.
Management will then evaluate the preliminary prospects. Essentially, this will
entail a determination by management whether or not the prospects have potential
for success. During this initial screening process, management will ask and
receive answers to questions framed to provide appropriate threshold
information, depending upon the nature of the prospect's business.

Such evaluation is not expected to be an in depth analysis of the target
company's operations although it will encompass a look at most, if not all, of
the same areas to be examined once one or more target companies are selected for
an in depth review. For instance, at this stage, management may look at a
prospect's unaudited balance sheet. Once a prospect is selected for an in depth
review, management will review the prospect's audited financial statements.
Nevertheless, management anticipates that this evaluation will provide a broad
overview of the business of the target company and should allow a large
percentage of preliminary prospects to be eliminated from further consideration.

Assuming management is able to complete the preliminary evaluation process and
select a limited number of companies for further study, of which there can be no
assurance, the Company may enter into preliminary negotiations with target
company management in order to obtain detailed financial and operational
information. Following the Company's receipt of such information, management
will conduct an in depth analysis of five (5) major areas of concern with
respect of the target company.

Management of the Company will review audited financial statements of the target
company and will also research the background of each director and member of
management of the target company in order to discern whether the stability of
the Company is such that further negotiations are warranted.

Management will research the potential of the target company's industry. The
concern here is whether the industry is in a growth, stagnant or declining
stage.

                                       4

<PAGE>


If the target company is a manufacturer, management will review whether it has
the necessary resources or access to the necessary resources and supplies to
produce a quality product in a timely manner.

Management will review the acceptance of the target company's product in the
market place Management will also review whether or not the product is realistic
(therefore, is there potential for the product to be workable and for to fulfill
its intended purpose.

Management will review the target company's stage of development, e.g., start up
or established company.

The foregoing is an outline of the areas of concern, which most often arise and
merit careful scrutiny by management. Because of the possible varieties of
target companies, which may come to the attention of management, additional
factors will most likely be considered in any given analysis. Also, the
procedures used in such a review are expected to vary depending upon the target
company being analyzed. Management may select a target company for further
negotiations even though the target may not receive a favorable evaluation as to
some of the five areas of concern.

Following the identification of at most one or two target companies which appear
to be suitable merger or acquisition candidates, the Company expects to
commission appraisals, professional studies of reserve and asset reports to be
conducted by outside consultants. The Company has limited funds with which to
engage consultants and, accordingly, management intends to conserve such funds
pending management's evaluation.

Management expects to enter into further negotiations with target company
management following successful conclusion of financial and evaluation studies.
Negotiations with target company management will be expected to focus on the
percentage of the Company which target company shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities, the Company's
stockholders will in all likelihood hold a lesser percentage ownership interest
in the Company following any merger or acquisition. The percentage ownership may
be subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then stockholders.

The final stage of any merger or acquisition to be effected by the Company will
require the Company to retain the services of counsel and a qualified accounting
firm in order to properly effect the merger or acquisition. The Company may be
expected to incur significant legal fees and accounting costs during the final
stages of a merger or acquisition. Also, if the merger or acquisition is
successfully completed, management anticipates that certain costs will be
incurred for public relations, such as the dissemination of information to the
public, to the stockholders and to the financial community. If the Company is
unable to complete the merger or acquisition for any reason, the Company's
capital may be substantially depleted if legal fees and accounting costs have
been incurred. Management intends to retain legal and accounting services only
on an as needed basis in the latter stages of a proposed merger or acquisition.

Management expects that it will be necessary to raise funds at such time as
significant evaluation work is undertaken regarding prospective mergers of
acquisitions. There can be no assurance that funds for such purposes will be
available to the Company on acceptable terms or at all.

Competition
-----------
The Company will remain an insignificant participant among the firms which
engage in mergers with and acquisitions of privately financed entities. There
are many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical expertise
than the Company. In view of the Company's combined limited financial resources
and limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.


                                       5

<PAGE>

Regulation and Taxation
-----------------------
The Company could be subject to regulation under the Investment Company Act of
1940 in the event the Company obtains and continues to hold a minority interest
in a number of entities. However, management intends to seek at most one or two
mergers or acquisitions and management's plan of operation is based upon the
Company obtaining a controlling interest in any merger or acquisition target
company and, accordingly, the Company may be required to discontinue any
prospective merger or acquisition of any company in which a controlling interest
will not be obtained.

The Company could also be required to register under the Investment Company Act
of 1940 in the event the Company comes within the definition of an Investment
Company contained in that Act due to its assets consisting principally of
shareholdings held in a number of subsidiaries. Management intends to seek at
most one or two mergers or acquisitions, which transactions will not result in
the Company holding an interest in any subsidiaries.

Any securities which the Company acquires in exchange for its Common Stock will
be "restricted securities" within the meaning of the Securities Act of 1933 (the
"1933 Act"). If the Company elected to resell such securities, such sale could
not proceed unless a registration statement had been declared effective by the
Securities and Exchange Commission or an exemption from registration was
available. Section 4 (2) of the 1933 Act, which exempts sales of securities not
involving any public offering, would in all likelihood be available since it is
likely that any such sale would be a block sale to a private investor to raise
additional capital.

Although management's plan of operation does not contemplate resale of
securities acquired, in the event such a sale were necessary, the Company would
be required to comply with the provisions of the 1933 Act.

As a condition to any merger or acquisition, it is possible that management of
the target company may request registration of the Company's Common Shares to be
received by target company's shareholders. In such event, the Company could
incur registration costs, and management intends to require the target company
to bear most, if not all, of the cost of any such registration. If the Company
does contribute toward the cost of such registration, its maximum contribution
will be limited to the extent that it can raise capital, on a debt or equity
basis. No such offering is currently planned and there can be no assurance that
any funds will be available for the Company at the time or under terms
acceptable to the Company or at all. Alternatively, the Company may issue
"restricted securities" to any prospective target company, which securities may
be subsequently registered for sale or sold in accordance with Rule 144 of the
Securities Act of 1933.

The Company intends to structure a merger or acquisition in such a manner as to
minimize federal and state tax consequences to the Company and any target
company.

Additional Risk Factors
-----------------------
WE HAVE INCURRED SUBSTANTIAL OPERATING LOSSES AND OUR AUDITORS HAVE ISSUED A
"GOING CONCERN" AUDIT OPINION

     Our financial statements filed with the United States Securities and
Exchange Commission have been prepared assuming that we will continue as a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. Our auditors have expressed
reservations in their audit letter for the fiscal year ended September, 2001
about our ability to continue as a going concern. As discussed in our financial
statements, we have incurred significant operating losses in our most recent
fiscal year and have a working capital deficit and negative tangible net worth.


                                       6

<PAGE>


YOU MAY BE UNABLE TO EFFECTIVELY EVALUATE OUR COMPANY FOR INVESTMENT PURPOSES
BECAUSE OUR BUSINESSES HAVE EXISTED FOR ONLY A SHORT PERIOD OF TIME

     We began our current operations in April 2000. As stated above, we have
recently divested our primary subsidiary, VCNC. As a result, we have no
significant operating history upon which you may evaluate our business and
prospects. In addition, you must consider our prospects in light of the risks
and uncertainties encountered by companies in an early stage of development in
new and rapidly evolving markets. We had no revenues from operations prior to
the acquisition of our VCNC subsidiary, and with its divestiture we again have
no current revenue source. In addition, we have no significant assets or
financial resources The success of the our proposed plan of operation will
depend to a great extent on the operations, financial condition and management
of any future acquisitions and the success of joint ventures into which we
enter. Our ability to integrate subsidiaries' activities into our consolidated
operations is uncertain. The success of joint ventures will be determined by the
abilities of our joint venture partners and the financial marketplace. The
success of our operations may be dependent upon numerous factors beyond our
control.


THE MARKET PRICE OF OUR COMMON STOCK MAY EXPERIENCE FLUCTUATION UNRELATED TO
OPERATING PERFORMANCE, INCLUDING FUTURE PRIVATE OR PUBLIC OFFERINGS OF OUR
CAPITAL STOCK

     The market price of the Common Stock of the Company may experience
fluctuations that are unrelated to the Company's operating performance. In
particular, the Company may increase its capital by making private or public
offerings of its Common Stock, securities convertible into its Common Stock,
preferred stock or debt securities. The actual or perceived effect of such
offerings, the timing of which cannot be predicted, may be the dilution of the
book value or earnings per share of the Common Stock outstanding, which may
result in the reduction of the market price of the Common Stock and affect the
Company's ability to access the capital markets.

BECAUSE OF INTENSE COMPETITION FOR SKILLED PERSONNEL, WE MAY NOT BE ABLE TO
RECRUIT OR RETAIN NECESSARY PERSONNEL ON A COST-EFFECTIVE BASIS

     Our future success will depend in large part upon our ability to identify,
hire, retain and motivate highly skilled employees. We plan to significantly
increase the number of our marketing, sales, customer support and operations
employees to effectively serve the evolving needs of our present and future
customers. Competition for highly skilled employees in our industry is intense.
In addition, employees may leave our company and subsequently compete against
us. Our failure to attract and retain these qualified employees could
significantly harm our business. The loss of the services of any of our
qualified employees, the inability to attract or retain qualified personnel in
the future or delays in hiring required personnel could hinder the development
and introduction of new and enhanced products and harm our ability to sell our
products. Moreover, companies in our industry whose employees accept positions
with competitors frequently claim that their competitors have engaged in unfair
hiring practices. We may be subject to such claims in the future as we seek to
hire qualified personnel, some of whom may currently be working for our
competitors. Some of these claims may result in material litigation. We could
incur substantial costs in defending ourselves against these claims, regardless
of their merits.

THE LOSS OF ANY OF OUR KEY PERSONNEL COULD SIGNIFICANTLY HARM OUR BUSINESS

     Our success depends to a significant degree upon the continuing
contributions of our key management employees. The loss of the services of any
key employee could significantly harm our business, financial condition and
results of operations. There can be no assurance that we will be successful in
retaining our key employees or that we can attract or retain additional skilled
personnel as required. Failure to retain key personnel could significantly harm
our business, financial condition and results of operations.

                                       7

<PAGE>


ANY ACQUISITIONS THAT WE MAY UNDERTAKE COULD BE DIFFICULT TO INTEGRATE, DISRUPT
OUR BUSINESS, DILUTE SHAREHOLDER VALUE AND SIGNIFICANTLY HARM OUR OPERATING
RESULTS

     We expect to review opportunities to buy other businesses or technologies
that would complement our current products, expand the breadth of our markets or
enhance our technical capabilities, or that may otherwise offer growth
opportunities. While we have no current agreements or negotiations underway, we
may buy businesses, products or technologies in the future. If we make any
future acquisitions, we could issue stock that would dilute existing
stockholders' percentage ownership, incur substantial debt or assume contingent
liabilities. We have no experience in acquiring other businesses and
technologies. Potential acquisitions also involve numerous risks, including:
problems assimilating the purchased operations, technologies or products;
unanticipated costs associated with the acquisition; diversion of management's
attention from our core business; adverse effects on existing business
relationships with suppliers and customers; risks associated with entering
markets in which we have no or limited prior experience; and potential loss of
the purchased organization's or our own key employees.

     We cannot assure that we would be successful in overcoming problems
encountered in connection with such acquisitions, and our inability to do so
could significantly harm our business.

CERTAIN "PENNY STOCK" REGULATIONS MAY APPLY TO OUR COMMON STOCK

     Our stock is considered so-called "penny stock." The so called "penny
stock" low-priced securities regulations could affect the resale of our stock.
These regulations require broker-dealers to disclose the risk associated with
buying penny stocks and to disclose their compensation for selling the stock.
They may have the effect of reducing the level of trading activity in the
secondary market for the Common Stock.

WE MAY NEED AND BE UNABLE TO OBTAIN ADDITIONAL FUNDING ON SATISFACTORY TERMS,
WHICH COULD DILUTE OUR STOCKHOLDERS OR IMPOSE BURDENSOME FINANCIAL RESTRICTIONS
ON OUR BUSINESS

     If our capital requirements or revenue vary materially from our current
plans or if unforeseen circumstances occur, we may require additional financing
sooner than we anticipate. This may not be available on a timely basis, in
sufficient amounts or on terms acceptable to us. This financing may also dilute
existing stockholders. Any debt financing or other financing of securities
senior to common stock will likely include financial and other covenants that
will restrict our flexibility. At a minimum, we expect these covenants to
include restrictions on our ability to pay dividends on our common stock. Any
failure to comply with these covenants would have a material adverse effect on
our business, prospects, financial condition and results of operation.

OUR STOCK PRICE MAY BE VOLATILE

     The recent trading volume for our common stock has been small, and the
market for our common stock has been less liquid than that of many other
publicly traded companies. There can be no assurance that a stockholder who
desires to sell shares of common stock can sell all of the shares that the
stockholder desires to sell, either at all or at the desired times or prices.

     Like the stock of other technology companies, the price at which our common
stock will trade is likely to be volatile and may fluctuate substantially due to
factors such as: fluctuations in our quarterly results of operations, trading
volume, the announcement of technological innovations or new products by us or
our competitors, general conditions in the computer hardware and software
industries, economic conditions generally, our ability to successfully increase
its market share with its existing products while expanding its product base
into other markets, the strength of our distribution channels, and variances
between actual results of operations and the results expected by securities
analysts.

                                       8

<PAGE>


OVER THE COUNTER BULLETIN BOARD TRADING

     Our Common Stock is listed on the over-the-counter electronic bulletin
board sponsored by Nasdaq and is not traded on a national securities exchange.
Because of this fact, investors may find it more difficult to trade in our
Common Stock or to obtain accurate, current information concerning market
prices. This could have a substantially negative impact on the trading prices
and the liquidity of the market for our Common Stock. In addition, there may be
a negative perception of our Company by investors, customers and third parties
doing business or considering doing business with us. Also, our Company is
treated less favorably with respect to regulatory requirements that are
dependent upon listing on a national stock exchange, such as an exemption from
state securities registration or qualification requirements.

FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN

     Some statements herein are forward-looking statements. These
forward-looking statements include, but are not limited to, statements about our
industry, plans, objectives, expectations, intentions and assumptions and other
statements that are not historical facts. When used in this Form 10-K, the words
"expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and
similar expressions are generally intended to identify forward-looking
statements. Because these forward-looking statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. We do not intend to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.

Employees
---------
The Company presently has no employees; it's President, E. G. Marchi, will
devote as much time as necessary to the affairs of the Company.

Consultants
-----------
The Company will employ consultants on an as-needed basis to perform services in
addition to those provided by Mr. Marchi.


ITEM 2.   DESCRIPTION OF PROPERTY
---------------------------------
The Company currently rents office space on a month to month basis. The
Company's mailing address is 3941 S. Bristol St. Unit E, Santa Ana, CA 92704.
The Company believes that its facilities are adequate for its current needs.

ITEM 3.   LEGAL PROCEEDINGS
---------------------------
The Company is not a party to any legal proceedings and management is not aware
of any threatened legal proceedings.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
No matters were submitted during the fiscal year ended September 30, 2001, to a
vote of security holders through the solicitation of proxies or otherwise.

                                    PART II


ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
------------------------------------------------------------------
The over-the-counter bulletin board high and low quotations, as provided by
Commodity Systems, Inc. (CSI) and reported on Yahoo.com, for the previous three
fiscal years are included in the tables below.

                                       9

<PAGE>


Fiscal Year Ended September 30, 2001:
-----------------------------------------------
                        High                  Low
1st Quarter             $0.28                 $0.05
2nd Quarter             $0.07                 $0.05
3rd Quarter             $0.09                 $0.03
4th Quarter             $1.01                 $0.03

Fiscal Year Ended September 30, 2000:
-----------------------------------------------
                        High                  Low
1st Quarter             $0.05                 $0.05
2nd Quarter             $0.05                 $0.05
3rd Quarter             $1.50                 $0.75
4th Quarter             $1.25                 $0.05


Fiscal Year Ended September 30, 1999:
-----------------------------------------------
                        High                  Low
1st Quarter             $0.03                 $0.03
2nd Quarter             $0.03                 $0.03
3rd Quarter             $0.03                 $0.03
4th Quarter             $0.03                 $0.03


On December 31, 2001, the closing bid and asked prices of the Common Stock were
$0.13 bid and $0.20 asked per share.

As of December 31, 2001, there were 5,787,043 shares of Common Stock issued and
outstanding which were held by approximately 300 holders of record.

During the fiscal years ended December 31, 1999, September 30, 2000, and
September 30, 2001, the Company has not paid any dividends on its Common Stock
and does not expect to do so in the foreseeable future. The Company intends to
apply its earnings, if any, in expanding its operations and related activities.
The payment of cash dividends in the future will be at the discretion of the
Board of Directors and will depend upon such factors as earnings levels, capital
requirements, the Company's financial condition and other factors deemed
relevant by the Board of Directors.

ITEM 6.   MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-----------------------------------------------------------------
Results of Operations
----------------------

Revenues and Cost of Revenues
Revenues for the year ending September 30, 2001 were $0 compared with $55,875
for the year ending September 30, 2000. This change like a number to be
considered here is reflective of the cessation of operations of the subsidiary,
VPNCOM.NET Corporation (VCNC). Cost of revenue was also $0 for 2001, compared
with $217,425 for 2000. This likewise can be attributed to the cessation of
operations of the subsidiary, VPNCOM.NET Corporation (VCNC). The loss was
thereby reduced by $161,550.

Non-Operating Income (Expense)
Interest expense was $17,576 in the year ended September 30, 2001 compared with
$28,395 in the year ended September 30, 2000. Total Non-Operating Income
(Expense) was ($6,651) in the year ended September 30, 2001 compared with
($95,390) in the year ended September 30, 2000. This reduction in Non-Operating
loss can be attributed to the reduction in business activities necessitated by
the cessation in operations of the subsidiary, VCNC.

The Company had a gain on disposal of the subsidiary VPNCOM.NET Corporation
(VCNC), amounting to $636,200.

Net Loss

Net loss for the year ended September 30, 2001 decreased to $190,886 as compared
to $1,919,973 resulting Earning (loss) per share of ($.08) as compared to
($2.21) for the last year.

Cash Flows Operating Activities
During 2001 Net cash used in operating activities totaled $86,986 compared with
$528,033 in 2000. Large changes occurred in the issuance of stock for consulting
services ($188,578 in 2001 compared with $840,882 in 2000). These changes can be
attributed to the cessation of operating activities of VCNC and its sale.

                                       10

<PAGE>


Cash Flow from Financing Activities
During 2001 cash received from financing activities totaled $85,756 compared
with $657,374 in 2000. The largest change was in proceeds from notes payable
($19,000 in 2001 compared with $540,874 in 2000). There was also a note
receivable that accounted for $103,500 in 2000. The reduction in total cash
received can be attributed to the reduced levels of business activity associated
with the cessation of operations of VCNC.


Due to changes on the marketplace and the upheaval surrounding "dot com"
ventures, the Company elected to divest itself of VCNC, it's wholly owned
subsidiary.

On November 6, 2000, VPN Communications Corporation (the Company) entered into
an Enforceable Letter of Intent with Paul Stevens, a related party, to sell to
Mr. Stevens 1,500 shares, which constitutes all of the issued shares, of the
Company's wholly owned Subsidiary VCNC.

On June 13, 20001, the VPN Communications Corporation (the "Company) rescinded
the enforceable letter of intent to divest itself of its wholly owned subsidiary
and only operating unit, VCNC.

On August 7, 2001 the Company signed an agreement to sell to VCC Corporation, an
unrelated entity, 1,500 shares, which constitutes all of the issued shares, of
the Company's wholly owned Subsidiary VCNC.

The Company received, in exchange for the Subsidiary, $1 and indemnification, by
VCC Corporation, against all claims arising from the outstanding liabilities of
the Subsidiary in the amount of $645,079. As of the date of this transaction the
Subsidiary had no on-going revenue and was producing no profit. The value of the
assets totaled $8,879. This transaction resulted in a net gain to the Company of
$636,200.

Income Taxes
The Company has not generated profit since its inception. No provision for taxes
has been made except for franchise tax required by the State of California. The
net operating loss (NOL) carry forward tax benefit totals $862,714 at the end of
2001. This compares to an NOL carry forward tax benefit of $796,570 at the end
of 2000. The difference reflects the net profit loss in 2001. The Company's
ability to utilize this tax benefit is subject to limitations; there is a 50% or
more change in ownership of the Company.

On November 9, 2001 the company entered into a joint venture to support the
financing and development of emerging companies. The Company owns 50% of the
joint venture: A.M.F.S. Limited. In return for its 50% share the Company
contributed 3,000,000 shares of its common stock, $0.001 par value. This stock
will be used by the joint venture to guarantee loans made to unrelated third
parties engaged in the targeted industries. As discussed earlier in this Form
10KSB the joint venture partner is Investors Millennium Management, Inc.

It is the Company's intention to seek opportunities to form joint ventures with
other individuals or entities for the purpose of assisting in the financial
development of emerging companies.

With the exception of the joint ventures, management does not anticipate the
Company will earn any revenue except a minimal amount of interest until the
conclusion of a merger or acquisition. There can be no assurance that the
Company will enter any such merger or acquisition or that such transaction will
prove profitable to the Company or its stockholders.

Liquidity and Capital Resources
-------------------------------
The Company has virtually no assets and, with the sale of VCNC, few or no
liabilities. As of November 6, 2000 it has been dependent upon its officers for
its minimal cash requirements. Management anticipates operational costs will
remain limited until such time as significant evaluation work is undertaken
regarding prospective mergers or acquisitions. There can be no assurance that
funds for such purposes will be available to the Company on acceptable terms or
at all.

The Company has no long-term capital commitments.

ITEM 7.   FINANCIAL STATEMENTS
------------------------------
Information with respect to this Item is set forth in "Index to Financial
Statements".

                                       11

<PAGE>


ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
--------------------
There have no events or conditions requiring reporting under the requirements of
this item.

                                    PART III

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

The directors and executive officers of the Company, since March 2000, are as
follows:

Name of Individual       Since         Age            Position
------------------    -------------   -----     ----------------------------
E.G. Marchi           March 2000       70       President,Chief Executive
                                                Officer and a Director
Ken Gough             December 2000    62       Director
Henry Smith           April 2001       55       Director

Each of the Company's directors has been elected to serve until the next annual
meeting of stockholders. Except as described below, there are no arrangements or
understandings between any director and any other person pursuant to which any
person was elected or nominated as a director. The Company's executive officers
serve at the discretion of the Board of Directors.

E.G. MARCHI has been President and Director of VPN Communications Corporation
since March 3, 2000. Before acquiring control of the Company, he had been
President, Secretary/Treasurer and sole Director of City Pacific International,
USA, Inc., a wholly owned subsidiary of e-Net Financial.Com corporation since
March 1999. From August 1997 through August 1998, in addition to his executive
consulting business, Mr. Marchi served as Chief Executive Officer of a publicly
held company, Alliance Biotechnology International, where he directed its
activities towards its ultimate sale and merger. From July 1994 through 1997, he
was general partner of American Capital Growth, where he was responsible for its
development as an investment banking organization. Mr. Marchi completed his
undergraduate work in Electrical and Mechanical Engineering at Illinois
Institute of Technology in 1957.

HENRY R. SMITH Ph.D., has been a Director since April of 2001. Dr. Smith has
over 30 years experience in the healthcare industry. He was president and CEO of
Allied Biotechnology, Inc. and was the founder and CEO of Associated Reference
Laboratories., Inc. Dr. Smith received his Ph.D. in Medical Immunology from
Leeds University School of Medicine, England.

KEN GOUGH has been a Director since December of 2000. Mr. Gough has held the
positions of Corporate Director of Administration, Financial Manager,
Developmental Manager, and Operations Manager for a number of corporations. In
these positions Mr. Gough has worked with several governmental agencies: OSHA,
EPA, DOT, FAA, FEMA, DOL, DOD and Department of State. Mr. Gough is a decorated
veteran of Viet Nam and holds a degree in Business Management from the
University of New York - Regents.

To the best of the knowledge of the Company, its directors, officers and 10%
beneficial owners have filed all reports in compliance with the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934 during the
fiscal year ended September 30, 2001.

TEM 10.  EXECUTIVE COMPENSATION TABLE

----------------- ---- ------------- ---------------- ------------ --------
    Name          Year     Salary      Stock Awards      Options     Other
                          Received
----------------- ---- ------------- ---------------- ------------ --------
E. G. Marchi      2001   0             0                0            0
----------------- ---- ------------- ---------------- ------------ --------
E. G. Marchi      2000   0             235,598          0            0
----------------- ---- ------------- ---------------- ------------ --------
Ken Gough         2001   0             0                0            0
----------------- ---- ------------- ---------------- ------------ --------
Ken Gough         2000   0             41,872           0            0
----------------- ---- ------------- ---------------- ------------ --------
Henry Stevens     2001   0             0                0            0
----------------- ---- ------------- ---------------- ------------ --------
Henry Stevens     2000   0             0                0            0
----------------- ---- ------------- ---------------- ------------ --------

                                       12

<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

The following tables set forth certain information regarding the beneficial
ownership of Common Stock as of December 31, 2001, (except as otherwise
indicated by footnote) by (i) each person (including any "group" as that term is
used in Section 13 (d) (3) of the Securities Exchange Act of 1934) known by
management to own beneficially more than five percent of the Company's
outstanding Common Stock, (ii) each of the Company's directors, and (iii) all
executive officers and directors of the Company as a group:

------------------------------ ---------------------- ------------------
Management Shareholders           Shares of Common         Percent of
                                 Stock Beneficially       Outstanding
                                       Owned                 Stock
------------------------------ ---------------------- ------------------
A.M.F.S. Limited
575 Anton Blvd. Suite 300             3,000,000              51.8%
Costa Mesa, CA 92626
------------------------------ ---------------------- ------------------
E.G. Marchi
3941 S. Bristol St. Unit E            1,232,520              21.3%
Santa Ana, CA 92704
------------------------------ ---------------------- ------------------
Guaranteed Financial Trust
1061 E. Flamingo Rd.                   440,373                7.6%
Las Vegas NV 89119
------------------------------ ---------------------- ------------------
Kenneth Gough
3941 S. Bristol St. Unit E                   0                  0%
Santa Ana, CA 92704
------------------------------ ---------------------- ------------------
Henry Smith
3941 S. Bristol St. Unit E                   0                  0%
Santa Ana, CA 92704
------------------------------ ---------------------- ------------------
Directors and officers as a          1,232,520               21.3%
group
------------------------------ ---------------------- ------------------

Except as otherwise noted, it is believed by the Company that all persons have
full voting and investment power with respect to the shares, except as otherwise
specifically indicated. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a "beneficial owner"
of a security if he or she, directly or indirectly, has or shares the power to
vote or to direct the voting of such security, or the power to dispose of or to
direct the disposition of such security. Accordingly, more than one person may
be deemed to be an owner of the same security. A person is also deemed to be a
beneficial owner of any security which that person has the right to acquire
within 60 days, such as warrants or options to purchase the Common Stock of the
Company.

E. G. Marchi, President of the Company, is deemed to be the beneficial owner of
shares of Common Stock of the Company owned by MAI Financial LLC, of which Mr.
Marchi is the sole owner.

Security Ownership of Certain Beneficial Owners

------------------------------- ------------- ------------- --------------------
Name and Address of               Title of    Amount and     Percent of Class of
Beneficial Owner                   Class      Nature  of     Equity Securities
                                              Beneficial
                                              Ownership
------------------------------- ------------- ------------- --------------------
MAI Financial LLC (1)              Common
3200 Bristol Street, Suite 725     Stock      901,488(1)          15.6%
Costa Mesa, CA 92626
------------------------------- --------------------------- --------------------
(1) E. G. Marchi, President of the Company, is deemed to be the beneficial owner
of these shares of Common Stock of the Company owned by MAI Financial LLC, of
which Mr. Marchi is the sole owner.
--------------------------------------------------------------------------------

                                       13

<PAGE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
As of December 31, 2001, no officers or directors were indebted to the Company
in any amount.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------------

The following documents are filed as a part of this report:
(a)  Exhibits

* Exhibits filed herewith. Other exhibits are incorporated by reference to
previous filings.

2.1 Amended and Restated Articles of Incorporation of the Registrant as filed
with the Secretary of State of Nevada on November 28, 1988,filed as Exhibit 3 to
the Registrant's Post-Effective Amendment to the Registration Statement on Form
S-18 filed with the Securities and Exchange Commission on January 26, 1989, and
is incorporated herein by reference.

2.2  By laws of the Registrant as currently in effect, filed as Exhibit 3 to the
     Registrant's Registration Statement on Form S-18 filed with the Securities
     and Exchange Commission on February 24, 1987, and as incorporated herein by
     reference.


(b) Reports on Form 8-K
-----------------------
8K filed on 5/3/2000    - Acquisition of VPNCOM.NET Corporation.

8K filed on 5/30/2000   - Change in Accountant from Schvaneveldt & Company
                          to Kabani & Company.

8K filed on 6/16/2000   - Change in fiscal year end to September 30.

8K/A filed on 6/19/2000 - Audited Financials and Pro Forma of VPNCOM.NET
                          Corporation.

8K/A filed on 6/20/2000 - Adjusted Audited Financials and Pro Forma of
                          VPNCOM.NET Corporation.

8K filed on 11/20/2000  - Sale of subsidiary, VPNCOM.NET Corporation.

8K filed on 8/13/2001   - Rescinding Sale of subsidiary, VPNCOM.NET
                          Corporation and Purchase of Omnetrix.

8K filed on 11/7/2001   - Rescinding Purchase of Omnetrix.


                                       14

<PAGE>


                          Index to Financial Statements

                                                                     Page

Independent Auditors' Report.                                        F-2

     Balance sheet as of September 30, 2001                          F-3

     Statements of operations for each of the years
     in the two-year period ended September  30, 2001                F-4

     Statements of stockholders' equity for each of the years
     in the two-year period ended September  30, 2001                F-5

     Statements of cash flows for each of the years
     in the two-year period ended September  30, 2001                F-6

     Notes to financial statements for each of the years
     in the two-year period ended September  30, 2001                F-7 to F-14

                                       15

<PAGE>


                                   SIGNATURES

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

Dated:  January 9, 2002,                    VPN COMMUNICATIONS CORPORATION.

                                            By:  /s/  E. G. Marchi
                                          -----------------------
                                                      E. G. Marchi, President

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

Signatures                          Title                            Date
- ------------------------     -------------------------         ------------

/s/  E. G. Marchi
--------------------------
     E. G. Marchi              President, Chief Executive       January 9, 2002
                               Officer, and a Director
/s/  Henry Smith
- ------------------------
     Henry Smith               Director                         January 9, 2002

/s/  Ken Gough
- ------------------------
     Ken Gough                 Director                         January 9, 2002


                                       16

<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
VPN Communication Corporation

We have audited the accompanying balance sheet of VPN Communication Corporation,
a Nevada Corporation (the "Company") as of September 30, 2001 and the related
statements of operations, stockholders' deficit and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit 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 audit provides 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 VPN Communication Corporation
as of September 30, 2001 and the results of its operations and its cash flows
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.


The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has accumulated deficit of $2,166,093 and excess of total
liabilities over total assets of $443,415 on September 30, 2001. These factors
as discussed in Note 3 to the financial statements, raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.




/s/  KABANI & COMPANY, INC.
---------------------------
     KABANI & COMPANY, INC.
     CERTIFIED PUBLIC ACCOUNTANTS


Fountain Valley, California
December 6, 2001

                                      F-2

<PAGE>


                         VPN COMMUNICATIONS CORPORATION

                                  BALANCE SHEET

                               SEPTEMBER 30, 2001





                                     ASSETS
                                     ------

CURRENT ASSETS:
           Cash & cash equivalent                                   $       169

                                                                    -----------
OTHER ASSETS:
           Deposit                                                           15
                                                                    -----------
                                                                    $       184
                                                                    ===========


                     LIABILITIES AND STOCKHOLDERS' DEFICIT
                     -------------------------------------




CURRENT LIABILITIES:
           Accounts payable                                         $   351,004
           Accrued expenses                                              46,347
           Notes payable Related parties                                 27,248
           Note payable  Management Company                              19,000
                                                                    -----------
                       Total current liabilities                        443,599





COMMITMENT

STOCKHOLDERS' DEFICIT
           Common stock, $.001 par value;
            50,000,000 shares authorized;
            2,787,043 shares issued and outstanding                       2,787
           Additional paid in capital                                 1,719,891
           Accumulated deficit                                       (2,166,093)
                                                                    -----------
                       Total stockholders' deficit                     (443,415)
                                                                    -----------
                                                                    $       184
                                                                    ===========


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

                                      F-3

<PAGE>


                         VPN COMMUNICATIONS CORPORATION

                            STATEMENTS OF OPERATIONS

                 FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000



                                                         2001           2000
                                                     -----------    -----------

Net revenue                                          $      --      $    55,875

Cost of revenue                                             --          217,425

Gross loss                                                  --         (161,550)
                                                     -----------    -----------
Total Operating Expenses                                 568,106      1,662,233

                                                     -----------    -----------
Loss from Operations                                    (568,106)    (1,823,783)

Non-Operating Income (expense):
         Interest expense                                (17,576)       (28,395)
         Other income                                     41,534          2,820
         Gain on sale of assets                            5,821
         Loss on retirement of assets                    (30,609)       (75,636)
                                                     -----------    -----------
Total Non-Operating Income (Expenses)                     (6,651)       (95,390)

Net loss before income tax and gain (loss) on               --             --
    discontinued segments and extraordinary item        (574,757)    (1,919,173)

Provision for income taxes                                 1,600            800

                                                     -----------    -----------
Net Loss before gain (loss) on disposal of
    segments and extraordinary item                     (576,357)    (1,919,973)

Disposal of segments                                     636,200           --
                                                     -----------    -----------
Net income (loss) before extraordinary item               59,843     (1,919,973)

Extraordinary item  Loss on settlement
    of a note payable                                   (250,729)          --
                                                     -----------    -----------
Net loss                                             $  (190,886)   $(1,919,973)
                                                     ===========    ===========
Basic & diluted weighted average number of
    common stock outstanding*                          2,389,188        867,651
                                                     ===========    ===========
Basic and diluted net Loss per share                 $     (0.08)   $     (2.21)
                                                     ===========    ===========


     *    The Basic and diluted weighted average number of common stock
          outstanding have been adjusted retroactively to effect
          recapitalization upon reverse merger on April 19, 2000 and 9:1 reverse
          stock split on September 14, 2001.


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

                                      F-4

<PAGE>
<TABLE>
<CAPTION>


                                            VPN COMMUNICATIONS CORPORATION

                                          STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE YEARS ENDED SEPTEMBER 30, 2001 & 2000



                                                           Common Stock
                                             -----------------------------------------                      Total
                                              Number of                     Additional    Accumulated   Stockholders'
                                                Shares         Amount     paid in capital    Deficit       Deficit
                                             -----------    -----------    -----------    -----------    -----------
<S>                                          <C>            <C>            <C>            <C>            <C>
Balance, September 30, 1999                          111    $    40,675    $      --      $   (55,234)   $   (14,559)

Recapitalization upon reverse merger             714,120        (34,247)       (41,175)          --          (75,422)

Issuance of shares for consulting services       505,943          4,554        836,328           --          840,882

Issuance of shares for cash                        1,926             17         12,983           --           13,000

Net loss for the year                               --             --             --       (1,919,973)    (1,919,973)
                                             -----------    -----------    -----------    -----------    -----------
Balance, September 30, 2000                    1,222,253    $    10,999    $   808,136    $(1,975,207)   $(1,156,072)

Effect of reverse stock split 9:1                   --          (22,296)        22,296           --             --

Cancellation of shares                           (11,596)          (104)       (65,362)          --          (65,466)

Stock issued for cancellation of debts           861,967          7,758        708,433           --          716,191

Issuance of shares for cash                      162,222          1,460         62,780           --           64,240

Issuance of shares for consulting services       552,196          4,970        183,608           --          188,578

Net loss for the year                               --             --             --         (190,886)      (190,886)
                                             -----------    -----------    -----------    -----------    -----------
Balance, September 30, 2001                    2,787,043    $     2,787    $ 1,719,891    $(2,166,093)   $  (443,415)
                                             ===========    ===========    ===========    ===========    ===========


All the shares have been retroactively restated to reflect a 9:1 reverse stock
split.


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

                                                          F-5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                VPN COMMUNICATIONS CORPORATION

                                   STATEMENTS OF CASH FLOWS

                        FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000



                                                                 September 30,  September 30,
                                                                     2001           2000
                                                                 -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
     <S>                                                         <C>            <C>
     Net Loss                                                    $  (190,886)   $(1,919,973)
     Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities:
              Depreciation and amortization                           39,524         26,529
              Issuance of shares for consulting services             188,578        840,882
              Disposal of segment                                   (636,200)          --
              Extraordinary item  Loss on settlement of debt         250,729           --
              Cancellation of shares issued for compensation         (65,466)          --
              Recapitalization of the company                           --          (75,422)
              (Gain) loss on disposal of equipment                    30,609         (5,821)
              (Increase) / decrease of:
                       Prepaid expenses                               46,040        (46,040)
                       Deposit                                           (15)          --
              Increase of accounts payable & accrued expenses        250,101        651,812
                                                                 -----------    -----------
              Net cash used in operating activities                  (86,986)      (528,033)
                                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
              Net proceeds from notes payable                         19,000        540,874
              Payments of notes payablerelated party                   2,516           --
              Proceeds from sale of common stock                      64,240         13,000
              Note receivable                                           --          103,500
                                                                 -----------    -----------
              Net cash provided by financing activities               85,756        657,374
                                                                 -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
              Acquisition of property & equipment                       --         (137,311)
                                                                 -----------    -----------

NET DECREASE IN CASH & CASH EQUIVALENTS                               (1,230)        (7,970)

CASH & CASH EQUIVALENTS, BEGINNING                                     1,399          9,369
                                                                 -----------    -----------
CASH & CASH EQUIVALENTS, ENDING                                  $       169    $     1,399
                                                                 ===========    ===========
SUPPLEMENTAL INFORMATION:

     CASH PAID FOR INTEREST                                      $      --      $      --
                                                                 ===========    ===========
     CASH PAID FOR INCOME TAXES                                  $      --      $      --
                                                                 ===========    ===========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITY

(1)  On April 19, 2000 the company acquired all the outstanding shares of
     VPNCOM.Net in exchange for 1,500,000 ordinary shares of the company.

(2)  The company issued 4,570,824 shares for consulting services of $840,882 for
     the year ended September 30, 2000.

(3)  The company issued 552,196 shares for consulting services of $188,578 and
     861,967 shares for cancellation of debts amounting $716,191 for the year
     ended September 30, 2001.

(4)  The Company returned property and equipment acquired through capital leases
     to the lessor for $36,735 during the year ended September 30, 2001.


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

                                               F-6
</TABLE>

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000




1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Organization and Nature of Operation


The Company was organized November 29, 1986, under the laws of the state of
Nevada, as Fernwood Financial, Inc. In 1988, the Company merged with Mimetics,
Inc., a California Corporation and changed its name to Exhibitronix, Inc. In
1990-1991, the Company became insolvent and disposed of all of its assets to
satisfy its creditors. From 1991 until June 30, 2000 the Company had no
operations. On March 14, 2000, the Company changed its name from Exhibitronix,
Inc. to VPN Communications Corporation. Pursuant to a reorganization agreement
dated April 19, 2000, the Company acquired one hundred percent (100%) of the
common shares of VPNCOM.Net Corporation (VPN).


VPNCOM.Net Corporation, formerly "City Pacific International USA., Inc.", was
incorporated in the state of Nevada on July 15,1997 to provide
telecommunications products and services for commercial and residential
customers and clientele, directly or through joint ventures with strategic
partners. VPN's activities from inception until 1998 consisted primarily of
reviewing possible business opportunities and acquisitions, and maintaining the
business entity.

On August 7, 2001, the Company sold the its subsidiary, VPN, for $1.00 with an
agreement that the purchaser will assume any obligations, debts and liabilities
of VPN.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its 100% wholly owned subsidiary, VPN, through August 7, 2001 (date
of disposal of VPN). All significant inter-company accounts and transactions
have been eliminated in consolidation. The acquisition of VPN (on April 19,
2000) has been accounted for as a purchase and treated as a reverse acquisition
since the former owners of VPNCOM.Net controlled 100% of the total shares of
common stock of the Company outstanding immediately following the acquisition.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or
less from the date of purchase that are readily convertible into cash to be cash
equivalents.

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Income taxes

Deferred income tax assets and liabilities are computed annually for differences
between the financial statements and tax basis of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted laws
and rates applicable to the periods in which the differences are expected to
affect taxable income (loss). Valuation allowance is established when necessary
to reduce deferred tax assets to the amount expected to be realized.

                                      F-7

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000



Basic and diluted net loss per share

Net loss per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per
share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.

Stock-based compensation

The Company has adopted the disclosure provisions only of SFAS 123 and continues
to account for stock based compensation using the intrinsic value method
prescribed in accordance with the provisions of APB No. 25, Accounting for Stock
Issued to Employees, and related interpretations. Common stock issued to
employees for compensation is accounted for based on the market price of the
underlying stock, generally the average low bid price.

The Company accounts for stock-based compensation issued to non-employees and
consultants in accordance with the provisions of SFAS 123 and the Emerging
Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". Common stock issued to
non-employees in exchange for services is accounted for based on the fair value
of the services received.

Fair value of financial instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial instruments, requires that the Company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.

Comprehensive income

Statement of financial accounting standards No. 130, Reporting comprehensive
income (SFAS No. 130), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity, except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in
financial statements that are displayed with the same prominence as other
financial statements. The Company adopted this standard in 1998 and the
implementation of this standard did not have a material impact on its financial
statements.

Reporting segments

Statement of financial accounting standards No. 131, Disclosures about segments
of an enterprise and related information (SFAS No. 131), which superceded
statement of financial accounting standards No. 14, Financial reporting for
segments of a business enterprise, establishes standards for the way that public
enterprises report information about operating segments in annual financial

                                      F-8

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000



statements and requires reporting of selected information about operating
segments in interim financial statements regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performances. The Company
adopted this standard in 1998 and the implementation of this standard did not
have a material impact on its financial statements.



Pension and other benefits

In February 1998, the Financing accounting standards board issued statement of
financial accounting standards No. 132, Employers' disclosures about pension and
other post-retirement benefits (SFAS No. 132), which standardizes the disclosure
requirements for pension and other post -retirement benefits. The Company
adopted this standard in 1998 and the implementation of this standard did not
have any impact on its financial statements.



Costs of start-up activities

In April 1998, the ASEC of AICPA issued SOP No. 98-5, "Reporting on the costs of
start-up activities", effective for fiscal years beginning after December 15,
1998. SOP 98-5 requires the costs of start-up activities and organization costs
to be expensed as incurred. The Company adopted this standard in fiscal 1999 and
the implementation of this standard did not have a material impact on its
financial statements.

Research and Development

Expenditures for software development costs and research are expensed as
incurred. Such costs are required to be expensed until the point that
technological feasibility is established. The period between achieving
technological feasibility and the general availability of such software has been
short. Consequently, costs otherwise capitalizable after technological
feasibility is achieved are generally expensed because they are insignificant.

Revenue
-------


Revenue represents estimated net realizable amounts from clients, third-party
payers and others for services rendered and products sold. Revenue was
recognized when services were performed or products were delivered to the
customers.


Advertising

The Company expenses advertising costs as incurred.

Reclassifications

         Certain items in the prior year financial statements have been
  reclassified for comparative purposes to conform with the presentation in the
  current period's presentation. These reclassifications have no effect on the
                       previously reported income (loss).

                                      F-9

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000



Recent Pronouncements:

On July 20, 2001, the FASB issued SFAS No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets." These statements make
significant changes to the accounting for business combinations, goodwill, and
intangible assets.

SFAS No. 141 establishes new standards for accounting and reporting requirements
for business combinations and will require that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001.
Use of the pooling-of-interests method will be prohibited. This statement is
effective for business combinations completed after June 30, 2001.

SFAS No. 142 establishes new standards for goodwill acquired in a business
combination and eliminates amortization of goodwill and instead sets forth
methods to periodically evaluate goodwill for impairment. Intangible assets with
a determinable useful life will continue to be amortized over that period. This
statement becomes effective January 1, 2002.

Management is in the process of evaluating the requirements of SFAS No. 141 and
142, but does not expect these pronouncements will materially impact the
Company's financial position or results of operations.

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset
Retirement Obligations". SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. This Statement is effective for financial
statements issued for fiscal years beginning after June 15, 2002. The impact of
the adoption of SFAS 143 on the Company's reported operating results, financial
position and existing financial statement disclosure is not expected to be
material.

In August 2001, Statement of Financial Accounting Standards No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), was issued.
This statement addresses financial accounting and reporting for the impairment
or disposal of long-lived assets and broadens the definition of what constitutes
a discontinued operation and how the results of a discontinued operation are to
be measured and presented. The provisions of SFAS 144 are effective for
financial statements issued for fiscal years beginning after December 15, 2001.
The impact of the adoption of SFAS 144 on the Company's reported operating
results, financial position and existing financial statement disclosure is not
expected to be material.

In January 2001, the Financial Accounting Standards Board Emerging Issues Task
Force issued EITF 00-27 effective for convertible debt instruments issued after
November 16, 2000. This pronouncement requires the use of the intrinsic value
method for recognition of the detachable and imbedded equity features included
with indebtedness, and requires amortization of the amount associated with the
convertibility feature over the life of the debt instrument rather than the
period for which the instrument first becomes convertible. Management is in the
process of evaluating the requirements of EITF 00-27, but does not expect this
pronouncement will materially impact the Company's financial position or results
of operations.


3.  GOING CONCERN UNCERTAINTY


The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
company as a going concern. However, the Company has incurred net losses from

                                      F-10

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000


inception to September 30, 2001 of $2,166,093. The continuing losses have
adversely affected the liquidity of the company. Losses are expected to continue
for the immediate future. The Company's total liabilities exceed its total
assets by $443,415. The Company faces continuing significant business risks,
including, but not limited to, its ability to maintain vendor and supplier
relationships by making timely payments when due.





In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded asset amounts shown in the accompanying balance
sheet it dependent upon continued operations of the company, which in turn is
dependent upon the Company's ability to raise additional capital, obtain
financing and succeed in its future operations, The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.





Management has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. The Company is actively pursuing
additional funding and potential merger or acquisition candidates and strategic
partners which would enhance stockholders' investment. In that regard, the
Company disposed of its subsidiary VPN on August 7, 2001. Management believes
that the above actions will allow the Company to continue operations through the
next fiscal year.




4.  DISPOSAL OF SUBSIDIARY





On August 7, 2001, the Company sold its subsidiary, VPNCOM.NET to VCC
Corporation for $1.00. The purchaser agreed to assume all obligations, debts and
liabilities. The total value of the assets was $8,879 and the total liability
was $645,079 for VPNCOM.NET as of August 7, 2001. VPN did not generate any
revenue in the current fiscal year. The disposal of subsidiary resulted in a net
gain of $636,200.





5.  ACCRUED EXPENSES





Accrued expenses as of September 30, 2001 consists of the following:


              Professional fees                $  15,000
              Accrued interest                     4,487
              Other accruals                      26,860
                                               ---------
                                               $  46,347
                                               =========


                                      F-11

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000



6.   NOTES PAYABLE - RELATED PARTIES





Notes payable consist of amounts payable to affiliated companies and
shareholders. Notes are due on demand, unsecured and carry the interest rates of
10% or 12% per year. Interest expenses for the period ended September 30, 2001
and 2000 was $ 17,576 and $28,395, respectively.



During the year ended September 30, 2001, the Company issued 861,967 shares of
common stock in exchange of notes payable amounting $716,191. The valuation of
shares was based upon market value of the shares at the time of the consummation
of the transaction.





7.    PAYABLE TO THE MANAGEMENT COMPANY



The Company has a note payable amounting $19,000 to the management Company. The
note is due by June 15, 2002, bears an interest rate of 10% per annum and is
unsecured. Included in accounts payable is $316,000 due to the management
Company for the services performed.


8.       COMMON STOCK



During the year ended September 30, 2001, the Company issued 861,967 shares of
common stock for cancellation of debts amounting $716,191, and 162,222 shares
for cash amounting $64,240. The Company also issued 552,196 shares of common
stock for services amounting $188,578 and cancelled 11,596 shares of previously
issued common stock for compensation.




On September 14, 2001 the board of directors approved the 9:1 reverse stock
split for the outstanding shares of the Company. All share and per share data
have been retroactively restated to reflect these stock split.




9.  INCOME TAXES




Since the Company has not generated taxable income since inception, no provision
for income taxes has been provided (other than minimum franchise taxes paid to
the State of California). Differences between income tax benefits computed at
the federal and state statutory rate and reported income taxes for the periods
ended September 30, 2001 and 2000 are primarily attributable to the valuation
allowance for net operating losses (NOL).


                                      F-12

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000



The net deferred tax (benefit) due to NOL carried forward, as of September 30,
2001 and 2000, consisted of the following:


                                       September 30, 2001    September 30, 2000
                                       ------------------    ------------------

Deferred tax asset                     $          862,714    $          796,570


Deferred tax asset valuation allowance           (862,714)             (796,570)
                                       ------------------    ------------------


     Balance                           $             --      $             --
                                       ==================    ==================



A 100% valuation allowance has been established against the deferred tax assets,
as the utilization of the loss carryforwards cannot reasonably be assured.




Through September 30, 2001, the Company incurred net operating losses for
federal tax purposes of approximately $2,254,000. The net operating loss
carryforwards may be used to reduce taxable income through the year 2015. Net
operating loss for carryforwards for the State of California are approximately
$1,070,000 and are generally available to reduce taxable income through the year
2005. The availability of the Company's net operating loss carryforwards are
subject to limitation since there is a 50% or more positive change in the
ownership of the Company. The provision for income taxes consists of the
California state minimum taxes imposed on corporations.




10.   EXTRAORDINARY ITEM




The Company settled debts amounting $465,462 by issuing 861,967 shares of common
stock valued at the market price on the date of the consummation of the
transaction for $716,191, resulting in an extraordinary loss of $250,729.





11.   COMMITMENT





The Company has entered into agreements with Securities Compliance Control, LLC
(SCC), a related party, whereby, SCC agrees to provide certain consulting
services for a term of three years beginning on July 1, 2000 and ending on July
1, 2003. SCC was paid a retainer of $25,000 plus 20,000 shares of the company's
common stock. Future compensation will be paid based upon number of hours of
services provided at a predetermined rate plus 20,000 shares of the company's
Common stock registered under S-8 registration, per month for the duration of
the contract. The S-8 stock will be nondilutive, regardless of recapitalization,
reconstruction or reorganization.


                                      F-13

<PAGE>


                  VPN COMMUNICATIONS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000



SCC may elect to receive compensation in all or in part, in the form of stock at
85% of the trading price of each share as of one week prior to submission of
monthly invoice to the Company.




12.       SUBSEQUENT EVENT




On August 1, 2001 the Company entered into an agreement to purchase all of the
outstanding shares (12,000,000 shares of common stock) of Omnetrix International
of Colorado (OMXI). The Company was to exchange shares with the shareholders of
OMXI on a one for one basis after a 9:1 reverse split of the Company's shares is
accomplished. On October 25, 20001, the Company rescinded the reverse
acquisition of Omnetrix International, a Colorado Corporation. All the stock
that were to be issued to the shareholders of OMXI and were held by the stock
transfer agent of the Company, in connection with the acquisition were
cancelled.


                                      F-14