U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                FORM 10-KSB/A #1

         [X]      Annual report under Section 13 or 15 (d) of the Securities
                  Exchange Act of 1934 (No fee required, effective October 7,
                  1996.)

                   For the fiscal year ended December 31, 2001

         [ ]      Transition report under Section 13 or 15(d) of the Securities
                  Exchange Act of 1934 (No fee required)

         For the transition period from _____________ to _____________ .

                         Commission file number 33-20582

                      Equity Technologies & Resources, Inc.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


               Delaware                                  75-2276137
   --------------------------------                 --------------------
   (State or Other Jurisdiction of                    (I.R.S. Employer
    Incorporation or Organization)                   Identification No.)

1050 Chinoe Road, Suite 304, Lexington, Kentucky            40502
------------------------------------------------          ----------
   (Address of Principal Executive Offices)               (Zip Code)

                              (859) 268-4446
              ----------------------------------------------
             (Issuer's Telephone Number, Including Area Code)


       Securities registered under Section 12(b) of the Exchange Act: None

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

                 Class A Common Stock, par value $.001 per share
                ------------------------------------------------
                                (Title of Class)

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. [ ]

The issuer's revenues for the year ended December 31, 2001 were $0.

The aggregate market value of the voting stock held by non-affiliates computed
by reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of December 31, 2001 was $1,812,881.

The number of shares outstanding of the issuer's common equity, as of December
31, 2001 was 48,566,620 shares.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]

<PAGE>

Explanatory Note:
-----------------
The Registrant, pursuant to Rule 12b-15 under the Securities Exchange Act of
1934, is hereby filing, under the cover of Form 10-KSB/A, Amendment No. 1, to
its Consolidated Financial Statements for the year ended December 31, 2001, for
the purpose of the following:

1.       Common stock - As of December 31, 2000, the number of shares of common
         stock outstanding were understated by 6,000,000 shares. The December
         31, 2000 10KSB has been amended and this report has been revised for
         the change.
2.       Accrued expenses - Certain amounts included in accounts payable of
         $82,193 and accrued liabilities of $570,000 at December 31, 2000, and
         certain amounts included in accounts payable of $22,911 for the
         quarters ended March 31, 2001, June 30, 2001, September 30, 2001, and
         December 31, 2001, have been reclassified as a capital contribution.
         The quarterly reports for March 31, 2001, June 30, 2001, and September
         30, 2001, have been amended and this report has been revised for the
         change.
3.       Preferred stock dividend - This annual report has been revised for the
         omission of the Series A preferred stock dividend approved on June 28,
         2001 for holders of record as of July 16, 2001.
4.       Purchase commitment - The annual report has been revised to disclose in
         Note 3 to the financial statements the purchase commitment dated July
         19, 2001, for Medturf appliances with MB Software, Inc., including
         related consulting agreement dated August 1, 2001, with HEB, LLC
         entered in connection with the Medturf transaction.

Previously reported loss per share amounts and weighted shares have been
revised. There was no effect on previously reported results of operations.

                                       1
<PAGE>

                                TABLE OF CONTENTS

                                     PART I


Item 1.       Description of Business..........................................3

Item 2.       Description of Property..........................................3

Item 3.       Legal Proceedings................................................3

Item 4.       Submission of Matters to a Vote of Security-Holders..............3


                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters.........4

Item 6.       Management's Discussion and Analysis or Plan of Operation........4

Item 7.       Financial Statements.............................................5

Item 8.       Changes in and Disagreements With Accountants on
              Accounting and Financial Disclosure..............................5

                                    PART III

Item 9.       Directors and Executive Officers.................................6

Item 10.      Executive Compensation...........................................6

Item 11.      Security Ownership of Certain Beneficial Owners
              and Management...................................................7

Item 12.      Certain Relationships and Related Transactions...................7

Item 13.      Exhibits, List and Reports on Form 8-K...........................8

              Signature........................................................8


                                       2
<PAGE>

                                     PART I

Item 1. Business.

GENERAL

Equity Technologies & Resources, Inc. ("Equity", or "the Company") is a Delaware
corporation, the successor to Equity AU, Inc., which was engaged in the
exploration and mining of certain minerals in Arkansas. The principal corporate
offices are now located at 1050 Chinoe Road, Suite 304, Lexington, Kentucky
40502 and its telephone number is (859) 268-4446. Equity AU, Inc. ceased all
mining activity in December 1996. The corporation changed its name to Equity
Technologies & Resources, Inc. in 2000 which was an integral part of the change
in focus of the Company. In December 2000 Verified Prescription Safeguards, Inc.
was acquired by Equity Technologies & Resources, Inc. Verified Prescription
Safeguards, Inc., intends to develop an electronic system to provide solutions
for the prescription drug and healthcare industry.

HISTORY AND CURRENT ACTIVITY

In February of 1995, then Chairman of the Company, James Arch ("Mr. Arch")
reached an agreement with a shareholder and investor, Stephen Guarino, to invest
significant equity capital into the Company. Mr. Arch thereafter granted full
management and financial control to Mr. Guarino. The then current President,
Kingman L. Hitz resigned, and all operations were moved to Mena, Arkansas.
Director Gail W. Holderman resigned shortly thereafter. Mr. Guarino was
appointed with the official title of President in May of 1995, and was also
appointed as a Director, along with William Hanlon and Roger Tichenor. Kingman
Hitz had not received notice of any meetings, and subsequently resigned as a
director in July of 1995. In early 1996, a partnership controlled by Mr. Arch
foreclosed on the Company's property and equipment which had been pledged for
loans received from the partnership.

In June of 1996, Mr. Guarino, Mr. Hanlon, and Mr. Tichenor resigned all of their
positions with the Company, and Mr. Arch entered into agreements with Mr.
Guarino and Mr. Tichenor to purchase all of the Class A Common shares which had
been previously issued to them.

Mr. Arch elected to resume operations at Mena, Arkansas on June 1, 1996. Ore
production was commenced in early September, 1996. Management determined that
the operation could not be profitable and operations were terminated.

In November 1998 Frank G. Dickey, Jr. became President of Equity AU, Inc. Unable
to find a suitable company for merger or acquisition, the Company changed its
name to Equity Technologies & Resources, Inc. and continued to seek a merger or
acquisition candidate. In December, 2000 Verified Prescription Safeguards, Inc.
was acquired. It intends to develop an electronic system to provide solutions
for the prescription drug and healthcare industry.

Item 2. Properties.

The Company's executive offices are located at 1050 Chinoe Road, Suite 304,
Lexington, Kentucky 40502. It's telephone number is (859) 268-4446.

Title to certain tracts of land in Polk County, Arkansas are still registered to
Equity AU, Inc.

Item 3. Legal Proceedings.

There are no pending legal proceedings in which the Company is involved.

Item 4. Submission of Matters to a Vote of Security Holders.

No matter was submitted to a vote of the security holders, through the
solicitation of proxies or otherwise, during the fourth quarter ended December
31, 2001.

Item 5. Market for Common Equity & Related Stockholder Matters.

The Company's common stock is quoted on the Over the Counter Bulletin Board, a
service maintained by the National Association of Securities Dealer, Inc. under
the symbol, "ETCR.OB". Trading in the common stock in the over-the-counter
market has been limited and sporadic and the quotations set forth below are not
necessarily indicative of actual market conditions. Further, these prices
reflect inter-dealer prices without retail mark-up, mark-down, or commission,
and may not necessarily reflect actual transactions. The high and low bid prices
for the common stock for each quarter of the years ended December 31, 2001 and
2000 are as follows:

                                       3
<PAGE>

                                                         High         Low
                                                       -------      -------
Fiscal 2000:
Quarter Ended March 31, 2000                              (1)          (1)
Quarter Ended June 30, 2000                               (1)          (1)
Quarter Ended September 30, 2000                          (1)          (1)
Quarter Ended December 31, 2000                         $1.25        $0.19

Fiscal 2001:
Quarter Ended March 31, 2001                            $0.33        $0.05
Quarter Ended June 30, 2001                             $0.32        $0.04
Quarter Ended September 30, 2001                        $0.37        $0.03
Quarter Ended December 31, 2001                         $0.07        $0.02

(1) no available data

As of March 18, 2002, there were approximately 800 record holders of the common
stock representing 43,516,620 shares outstanding. The Company has not paid any
cash dividends on its Common Stock, and it currently intends to retain any
future earnings to fund the development and growth of its business.

The Company has paid no dividends to date and does not anticipate paying any for
the foreseeable future.

As of the date hereof, the Company has not paid or declared any cash dividends.
The Company can give no assurance that it will generate future earnings from
which cash dividends can be paid. Future payment of dividends by the Company, if
any, is at the discretion of the Board of Directors and will depend, among other
criteria, upon the Company's earnings, capital requirements, and its financial
condition as well as other relative factors. Management has followed the policy
of retaining any and all earnings to finance the development of its business.
Such a policy is likely to be maintained as long as necessary to provide working
capital for the Company's operations.

Item 6. Management's Discussion & Analysis of Financial Condition & Results of
Operations.

Statements made or incorporated in this report include a number of
forward-looking statements within the meaning of Section 27(a) of the Securities
Act of 1933 and Section 21(e) of the Securities Exchange Act of 1934.
Forward-looking statements include, without limitation, statements containing
the words "anticipates", "believes", "expects", "intends", "future", and words
of similar import which express management's belief, expectations or intentions
regarding the Company's future performance or future events or trends. Reliance
should not be placed on forward-looking statements because they involve known
and unknown risks, uncertainties and other factors, which may cause actual
results, performance or achievements of the Company to differ materially from
anticipated future results, performance or achievements expressly or implied by
such forward-looking statements. In addition, the Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.

RESULTS OF OPERATIONS

For the Year Ended December 31, 2001 compared to the Year Ended December 31,
2000.

During the year ended December 31, 2001 the Company had no operations. General
and administrative expenses were $4,474,923 for the year of 2001. Expenses
include the rental of office space, system development, and consulting fees to
keep the corporation current. The Company recorded a net loss of $4,548,218 in
2001, compared to $3,213,113 in 2000. This increase was the result of the number
of shares of common stock issued for services rendered.

For the Year Ended December 31, 2001 compared to the Year Ended December 31,
2000. During the year ended December 31, 2001 the Company had no operations.
General and administrative expenses increased $1,306,449, or 29%, to $4,474,923
during fiscal 2001 from $3,168,474 during fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2001, the Company had $612 in assets and total stockholders
deficit of $(762,754) compared with total assets of $4,712 and total
stockholders deficit of $(1,259,303) at December 31, 2000. The Company borrowed
$5,300 from the President and $51,000 from other sources for general operating
expenses. The President and others have been paying the expenses of the Company
until the company or its subsidiary can commence business. There is no assurance
that the President and others can or will, continue to fund the company and no
assurance as to when or if the company or its subsidiary will be able to begin
operations.

The Independent Auditor's Report for the year ending December 31, 2001
("Report") states that the uncertainty of certain conditions raise substantial
doubt about the ability of the company to continue as a going concern. With
regard to this issue, the "Report" cites past losses, lack of revenue and
working capital and whether the company will be able to raise sufficient funds
to achieve profitable status. It is the position of the Company that it will
generate resources sufficient to fund all costs associated with the development
of Verified Prescription Safeguards, Inc. electronic system. It is further
believed that a consistent revenue stream will be in place during calendar year
2002.

                                       4
<PAGE>

Item 7. Financial Statements and Supplementary Data.

The Following financial statements and documents are filed herewith on the pages
listed below beginning on page F-1, as part of Item 7 of this report.

Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

On July 27, 2001, Equity Technologies & Resources, Inc. (the "Company")
dismissed HJ & Associates, L.L.C. as its independent public accountants. The
dismissal was approved by the Board of Directors. HJ & Associates, L.L.C. issued
an unqualified audit opinion on the 2000 and 1999 year-end financial statements,
modified as to an uncertainty regarding the ability of the Company to continue
as a going concern. The Company has engaged Clancy and Co., P.L.L.C. as its new
independent public accountants effective as of the date of the dismissal of its
former accountants.

During the two most recent fiscal years, the Company has not had any
disagreements on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure with either of its
independent accountants.

ITEM 9: Directors and Executive Officers of the Registrant

The following table sets forth certain information regarding the Directors and
Executive Officers of the Company:

                                                                     Year First
Name                       Age       Position                         Elected
----                       ---       --------                         -------
Frank G. Dickey, Jr.       58        President/CFO, Director            1998

James K. Millard           53        Vice-President                     2000

Laura G. White             64        Vice-President,                    2000
                                      Ass't. Sec., Director

James Arch                 78        Director                           1996

Executive Officers are elected on an annual basis and serve at the discretion of
the Board of Directors unless otherwise provided by contract. Directors are
elected on an annual basis.

Frank G. Dickey, Jr., President/CFO and Director has been with the Company since
1998. Mr. Dickey is also Chairman of the Board of Directors and CEO of Verified
Prescription Safeguards, Inc. He is an attorney with the firm of Frank G.
Dickey, Jr. and Associates, in Lexington, Kentucky.

James K. Millard, Vice President, has been with the Company since 2000. Mr.
Millard is also Vice-President of Verified Prescription Safeguards, Inc. He was
formerly with e-Corp, Inc. and WKYT-TV, both located in Lexington, Kentucky.

Laura G. White, Vice President, Assistant Secretary, and Director has been with
the Company since 1999. She is also Assistant Secretary and a Vice President of
Verified Prescription Safeguards, Inc. She was formerly employed as Director of
Media Relations with the Commonwealth of Kentucky, Transporation Cabinet and the
Kentucky Association of Realtors.

James Arch has been a Director of the Company since 1996 when the Company was
known as Equity AU, Inc.

ITEM 10: Executive Compensation

All officers have had employment contracts and have current employment
contracts, however, none have received any compensation. The following table and
the accompanying notes provide summary information for each of the last three
fiscal years concerning cash and non-cash compensation paid or accrued by the
Company's current and past officers over the past three years. Until the company
has funds or revenue, the officers will not draw any compensation nor receive
any other benefits. The following are the annual salaries of the officers. The
company has not adopted any insurance, retirement, pension, profit sharing or
other similar program.

The company may offer stock bonuses, stock options, profit sharing or pension
plans to key employees or executive officers of the Company in such amounts and
upon such conditions as the Board of Directors may, in its sole discretion,
determine.

                                       5
<PAGE>
<TABLE>
<CAPTION>
                                              SUMMARY COMPENSATION TABLE

                                             Annual Compensation                            Long Term Compensation
                                                                                        Awards                     Payouts
                                                                Other      -----------------------------  ------------------------
                                                                Annual       Restricted     Securities      LTIP       All Other
                                                             Compensation  Stock Award(s)   Underlying     payouts   Compensation
Name and Principal Position     Year     Salary($)  Bonus($)     ($)          ($)(3)     Options SARs(#)    ($)           ($)
---------------------------     ----    ----------- -------- ------------- ------------- ---------------  ---------  -------------
<S>                             <C>      <C>         <C>       <C>           <C>            <C>           <C>          <C>
Frank G. Dickey, Jr.            2001        -          -          -          $1,209,080          -            -           -
President                       2000     $150,000      -          -            $840,000          -            -           -
                                1999     $150,000      -          -              -               -            -           -
Frank G. Dickey, Jr.            2001        -          -          -              -               -            -           -
Chief Financial Officer         2000     $60,000       -          -              -               -            -           -
                                1999     $60,000       -          -              -               -            -           -
James Milliard (1)              2001        -          -          -           $175,000           -            -           -
Vice President                  2000        -          -          -              -               -            -           -
                                1999        -          -          -              -               -            -           -
Laura White (2)                 2001        -          -          -              -               -            -           -
Secretary/V.P. Investor         2000     $90,000       -          -              -               -            -           -
  Relations                     1999     $60,000       -          -              -               -            -           -
-------------------------
(1)      Only been with the company since 2000
(2)      Only been with the company since 1999
(3)      Represents the amount of restricted common stock issued at the fair market value of the shares on the date of issuance.
</TABLE>

ITEM 11: Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of December 31, 2001, regarding
the beneficial ownership of capital stock of the Company by: (1) Each person
known by the Company to beneficially own more than 5% of the outstanding shares
of Common Stock; (2) each director of the Company; (3) the President of the
Company; and (4) the directors and executive officers of the Company as a group.
The persons named in the table have sole voting and investment power with
respect to all shares of capital stock owned by them, unless otherwise noted.

Name of Beneficial                  Amount and Nature                  Percent
Owner of Group (1)               of Beneficial Ownership              of Class
-------------------              ------------------------             ---------
Frank G. Dickey, Jr.                    7,946,450                      16.1%

James K. Millard                        1,000,000                       2.0%

Laura G. White                             48,240                        *

James Arch                              1,000,000                       2.0%

Kentrust, Inc.                          5,161,000                      10.48%

All Directors and Executive
Officers as a Group                     9,994,690                      20.3%
(four in number)

* Less than .01%.

(1) The address for each person or entity listed above is 1050 Chinoe Road,
Suite 304, Lexington, Kentucky 40502.

As of April 16, 2002, there were 49,266,620 shares of common stock issued and
outstanding.

                                       6
<PAGE>

ITEM 12: Certain Relationships and Related Transactions

During 2001, Kentrust, Inc., an entity whose CEO is Frank G. Dickey, Jr., a
director and current President of the Company, loaned the Company an additional
$41,400, which is accruing interest at 10% per annum, with repayment due on or
before December 31, 2001.

On December 23, 1998, the Company borrowed $61,000 from Kentrust, Inc. The note
carried a 10% interest rate, and was due on December 23, 1999. In 1999, the
Company borrowed an additional $104,500 from Kentrust at 10%. During 2000, the
entire $165,500 became overdue and began accruing interest at a rate of 12% per
annum. A $16,550 penalty for late payment was also levied against the Company.
The note does not have any new repayment date.

The principal balance for both of these notes was at December 31, 2001 was
$206,900. Accrued interest on these notes as of December 31, 2001 and 2000 was
$57,176 and $37,316, respectively.

ITEM 13: Exhibits and Reports on Form 8-K

1. Reports on Form 8-K - None

2. Exhibits - None


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                          EQUITY TECHNOLOGIES & RESOURCES, INC.
                                          (Registrant)

                                          BY:  /s/  Frank G. Dickey, Jr.
                                              ---------------------------------
                                              Frank G. Dickey, Jr., President


Dated: August 22, 2002

                                       7
<PAGE>

                                TABLE OF CONTENTS


Independent Auditors' Report................................................ 2

Independent Auditors' Report................................................ 3

Consolidated Balance Sheet at December 31, 2001............................. 4

Consolidated Statements of Operations for the Years Ended
December 31, 2001 and 2000 and for the Period From Inception
of the Development Stage (January 1, 1994) to December 31, 2001............. 5

Consolidated Statements of Stockholders' Equity (Deficit) for
the Period From Inception of the Development Stage
(January 1, 1994) to December 31, 2001................................... 6-11

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2001 and 2000 and for the Period From Inception
of the Development Stage (January 1, 1994) to December 31, 2001..........12-13

Notes to the Financial Statements....................................... 14-24

                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
Equity Technologies & Resources, Inc. and Subsidiary

We have audited the accompanying consolidated balance sheet of Equity
Technologies & Resources, Inc. and Subsidiary (a Development Stage Company)
("the Company") as of December 31, 2001 and the related consolidated statements
of operations, stockholders' equity and cash flows for the year then ended and
for the period from inception of the development stage on January 1, 1994
through December 31, 2001. 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. The related consolidated statements of
operations, stockholders' equity, and cash flows of the Company from inception
of the development stage on January 1, 1994 through December 31, 2000 were
audited by other auditors' whose reports expressed an unqualified opinion with a
going concern modification on those statements. Our opinion on the consolidated
statements of operations, stockholders' equity and cash flows from inception of
the development stage on January 1, 1994 through December 31, 2001, insofar as
it relates to amounts for prior periods through December 31, 2000, is based
solely on the report of other auditors.

We conducted our audit in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall consolidated financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
Company as of December 31, 2001, and the consolidated results of their
operations and their cash flows for the year then ended, in conformity with
generally accepted accounting principles in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2, the
Company is a development stage company with recurring losses since its inception
on January 1, 1994, which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regards to these matters are discussed
in Note 2. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

/s/ Clancy and Co., P.L.L.C.

Clancy and Co., P.L.L.C.
Phoenix, Arizona
April 8, 2002

                                      F-2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors
Equity Technologies & Resources, Inc. and Subsidiary
(A Development Stage Company)
Lexington, Kentucky

We have audited the accompanying consolidated statements of operations,
stockholders' equity, and cash flows of Equity Technologies & Resources, Inc.
and Subsidiary (a development stage company) for the year ended December 31,
2000 and from inception of the development stage on January 1, 1994 through
December 31, 2000. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. The related
consolidated statements of operations, stockholders' equity, and cash flows of
Equity Technologies & Resources, Inc. and Subsidiary (a development stage
company) from inception of the development stage on January 1, 1994 through
December 31, 1995 were audited by other auditors whose report dated July 3,
1996, expressed an unqualified opinion on those statements. Our opinion on the
consolidated statements of operations, stockholders equity and cash flows from
inception of the development stage on January 1, 1994 through December 31, 2000
insofar as it relates to amounts for prior periods through December 31, 1995 is
based solely on the report of other auditors.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects the financial position of Equity Technologies &
Resources, Inc. and Subsidiary (a development stage company) as of December 31,
2000 and the consolidated results of their operations and their cash flows for
the year ended December 31, 2000 and from inception of the development stage on
January 1, 1994 through December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 7 to the 2000
consolidated financial statements, (not presented separately herein), the
Company had no operations and limited capital which together raised substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to this matter were also described in Note 7. The consolidated financial
statements did not include any adjustments that might result from the outcome of
this uncertainty.

/s/ HJ & Associates, LLC

HJ & Associates, LLC
Salt Lake City, Utah
April 14, 2001

                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                  (A Development Stage Company)
                                   CONSOLIDATED BALANCE SHEET
                                        DECEMBER 31, 2001

ASSETS                                                                              2001
                                                                                ------------
<S>                                                                             <C>
Current Assets
   Cash                                                                         $        612
   Prepaid Expenses                                                                        0
                                                                                ------------
Total Current Assets                                                                     612
                                                                                ------------

Total  Assets                                                                   $        612
                                                                                ============

LIABILITIES AND  STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
   Accounts Payable                                                             $     51,754
   Accrued Expenses                                                                  169,962
   Dividends Payable (Note 5)                                                         40,750
   Notes Payable (Note 4)                                                            131,500
   Notes Payable - Related Party (Note 4)                                            369,400
                                                                                ------------
Total Current Liabilities                                                            763,366
                                                                                ------------

Total Liabilities                                                                    763,366

Stockholders' Equity (Deficit)

Preferred Stock, Class A, $1.00 Par Value, 2,000,000 shares   authorized,
    63,169 shares issued and outstanding                                              63,169
Preferred Stock, Class B, $1.00 Par Value, 300,000 shares authorized,
    70,000 shares issued and outstanding                                              70,000
Preferred Stock, Class C, $1.00 Par Value, 100,000 shares authorized, -0-
    shares issued and outstanding                                                          -
Common Stock, Class A, $0.001 Par Value, 99,900,000 shares authorized,
    48,566,620 issued and outstanding                                                 48,567
Common Stock, Class B, $0.01 Par Value, 100,000 shares authorized, 100,000
    issued and outstanding                                                             1,000
Additional Paid in Capital                                                        19,583,883
Accumulated Deficit Prior to the Development Stage                                (8,390,740)
Deficit Accumulated During the Development Stage                                 (12,138,633)
                                                                                ------------
Total Stockholders' Equity (Deficit)                                                (762,754)
                                                                                ------------
Total Liabilities and Stockholders' Equity                                      $        612
                                                                                ============


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

                                              F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                              EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                          (A Development Stage Company)
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                               FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000, AND
                                FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT
                                  STAGE (JANUARY 1, 1994) TO DECEMBER 31, 2001

                                                                                                              Deficit
                                                                                                            Accumulated
                                                                          Year Ended       Year Ended        During the
                                                                          December 31,     December 31,      Development
                                                                             2001             2000              Stage
                                                                         ------------     ------------      -------------
<S>                                                                      <C>              <C>               <C>
Revenues                                                                 $          -     $          -      $           -

General and Administrative Expenses                                         4,474,923        3,168,474          8,057,818
                                                                         ------------     ------------      -------------

Loss From Operations                                                       (4,474,923)      (3,168,474)        (8,057,818)

Other Income (Expense)
   Interest Expense                                                           (73,295)         (44,700)          (148,828)
   Interest Income                                                                  0               59                 59
                                                                         ------------     ------------      -------------
Total Other Income (Expense)                                                  (73,295)         (44,641)          (148,769)
                                                                         ------------     ------------      -------------

Loss From Continuing Operations                                            (4,548,218)      (3,213,115)        (8,206,587)

Loss on Discontinued Operations (Note 7)                                            -                -         (3,837,987)
                                                                         ------------     ------------      -------------


Net Loss Available to Common Stockholders                                $ (4,548,218)    $ (3,213,115)     $ (12,044,574)
                                                                         ============     ============      =============

Dividends on Preferred Stock (Notes 5 and 7)                             $          -     $          -      $     (32,517)
                                                                                                            =============
Basic and Diluted Loss Per Share of Common Stock:
   Loss from Continuing Operations                                        $    (0.17)      $    (1.05)      $       (0.31)
                                                                         ============     ============
   Loss from Discontinued Operations                                                                                (0.14)
                                                                                                            -------------
   Net Loss                                                              $     (.0.17)    $      (1.05)     $       (0.45)
                                                                         ============     ============      =============

Weighted Average Number of Common Shares Outstanding
   Basic and Diluted                                                       26,593,076        3,074,174         26,593,076
                                                                         ============     ============      =============


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

                                                         F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                                  (A Development Stage Company)
                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                     FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                             (JANUARY 1, 1994) TO DECEMBER 31, 2001

                                             Preferred     Preferred      Preferred      Preferred        Preferred        Preferred
                                               Stock         Stock          Stock          Stock            Stock            Stock
                                              Class A       Class A        Class B        Class B          Class C          Class C
                                               Shares        Amount         Shares         Amount           Shares           Amount
                                              --------      --------      ---------      ---------         --------        --------
<S>                                            <C>         <C>            <C>            <C>              <C>              <C>
Balance, January 1, 1994                       148,000     $ 148,000         78,500      $  78,500                -        $      -
Preferred Stock Issued for Cash at $1.00
  Per Share                                          -             -        203,500        203,500            6,000           6,000
Preferred Stock Issued for Services at
  $1.00 Per Share                                    -             -          6,200          6,200            4,200           4,200
                                              --------      --------      ---------      ---------         --------        --------
Balance, December 31, 1994, 1995,
  and 1996                                     148,000       148,000        288,200        288,200           10,200          10,200
Shares Converted to Class A Common Stock
                                                     -             -         (5,000)        (5,000)               -               -
Shares Converted to Class A Common Stock
                                                     -             -        (11,000)       (11,000)               -               -
Canceled Shares                                (98,000)      (98,000)      (272,200)      (272,200)         (10,200)        (10,200)
                                              --------      --------      ---------      ---------         --------        --------
Balance, December 31, 1997, 1998,
  and 1999                                      50,000        50,000              -              -                -               -
Shares Issued as Consideration for
  Purchase of Subsidiary (Note 1)                    -             -         40,000         40,000                -               -
                                              --------      --------      ---------      ---------         --------        --------
Balance, December 31, 2000                      50,000        50,000         40,000         40,000                -               -
Preferred Stock Dividend (Note 5)                    -        13,169              -              -                -               -
Shares Issued in Exchange for 300,000
  shares of Growth Fund Partnership, Inc.            -             -         30,000         30,000                -               -
                                              --------      --------      ---------      ---------         --------        --------
Balance, December 31, 2001                      63,169      $ 63,169         70,000         70,000                -               -
                                              ========      ========      =========      =========         ========        ========


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

                                                                  F-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                                  (A Development Stage Company)
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                             (JANUARY 1, 1994) TO DECEMBER 31, 2001


                                             Common        Common           Common      Common
                                             Stock          Stock           Stock        Stock       Additional
                                            Class A        Class A         Class B      Class B        Paid In       Accumulated
                                             Shares         Amount          Amount      Amount         Capital         Deficit
                                           ----------     ---------        -------     ---------     -----------    -------------
<S>                                        <C>            <C>              <C>         <C>           <C>            <C>
Balance, January 1, 1994                       11,425     $      12        100,000     $   1,000     $11,217,192    $  (8,390,740)
                                           ----------     ---------        -------     ---------     -----------    -------------
Common Stock Issued for Services at
     $135.87 Per Share                            700             1              -             -          95,105                -
Common Stock Issued for Services at
     $499.70 Per Share                             92             -              -             -          45,979                -
Common Stock Issued for Services at
     $553.66 Per Share                             32             -              -             -          17,717               -
Net Loss, Year Ended December 31, 1994              -             -              -             -               -       (3,563,526)
                                           ----------     ---------        -------     ---------     -----------    -------------

Balance December 31, 1994                      12,249            13        100,000         1,000      11,375,993      (11,954,266)
Common Stock Issued for Cash at $34.02
     Per Share                                  5,416             5              -             -         184,295                -
Common Stock Issued for Services at
     $52.50 Per Share                             500             -              -             -          26,250                -
Common Stock Issued for Dividends at
     $553.66 Per Share                             32             -              -             -          17,717          (17,717)
Common Stock Issued for Dividends at
     $548.15 Per Share                             27             -              -             -          14,800          (14,800)
Net Loss, Year Ended December 31, 1995              -             -              -             -               -         (212,633)
                                           ----------     ---------        -------     ---------     -----------    -------------

Balance, December 31, 1995                     18,224            18        100,000         1,000      11,619,055      (12,199,416)
Net Loss, Year Ended December 31, 1996              -             -              -             -               -          (61,828)
                                           ----------     ---------        -------     ---------     -----------    -------------

Balance, December 31, 1996                     18,224            18        100,000         1,000      11,619,055      (12,261,244)
Common Stock Issued in Exchange for
     Preferred Series B Stock at $312.50
     Per Share                                     16             -              -             -           5,000                -
Fractional Shares Issued                            6             -              -             -               1                -
Common Stock Issued for Services at $3.00
     Per Share                                  4,000             4              -             -          11,996                -
Common Stock Issued for Debt at $10.00
     Per Share                                  5,150             5              -             -          51,495                -
Common Stock Issued for Services at $4.95
     Per Share                                 20,590            21              -             -         101,979                -
Common Stock Issued for Services at $3.00
     Per Share                                    400             -              -             -           1,200                -
Common Stock Issued in Exchange for
     Preferred Series B Stock at $343.75
     Per Share                                     32             -              -             -          11,000                -
Capital Contribution-Cancellation of
     shares                                      (168)            -              -             -         388,793                -
Net Loss, Year Ended December 31, 1997              -             -              -             -               -         (115,504)
                                           ----------     ---------        -------     ---------     -----------    -------------

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

                                                                       F-7
<PAGE>
<CAPTION>
                                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                                  (A Development Stage Company)
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                             (JANUARY 1, 1994) TO DECEMBER 31, 2001


                                             Common        Common           Common      Common
                                             Stock          Stock           Stock        Stock       Additional
                                            Class A        Class A         Class B      Class B        Paid In       Accumulated
                                             Shares         Amount          Amount      Amount         Capital         Deficit
                                           ----------     ---------        -------     ---------     -----------    -------------
<S>                                        <C>            <C>              <C>         <C>           <C>            <C>
Balance, December 31, 1997                     48,250            48        100,000         1,000      12,190,519      (12,376,748)
Reversal of Cancellation of Common A
  Shares                                        4,280             4              -             -              (4)               -
Common Stock Issued at $3.15 Per Share to
  Repay Note Payable                            1,737             2              -             -           5,468                -
Common Stock Issued to Officer at $3.15
  Per Share for Consulting Services               137             -              -             -             431                -
Common Stock Issued to Officer at $3.15
  Per Share for Consulting Services            22,480            22              -             -          71,132                -
Common Stock Issued to Officer at $3.15
  Per Share for Consulting Services             2,563             3              -             -           8,080                -
Common Stock Issued to Officer to Payoff
  Note Payable for Consulting Services        120,000           120              -             -          58,338                -
Net Loss, Year Ended December 31, 1998              -             -              -             -               -         (150,873)
                                           ----------     ---------        -------     ---------     -----------    -------------
Balance, December 31, 1998                    199,447           199        100,000         1,000      12,333,964      (12,527,621)
Net Loss, Year Ended December 31, 1999              -             -              -             -               -         (178,877)
                                           ----------     ---------        -------     ---------     -----------    -------------
Balance, December 31, 1999                    199,447           199        100,000         1,000      12,333,964      (12,706,498)
Common Stock Issued at $7.00 Per Share
  for Services Rendered                       166,628           168              -             -       1,166,230                -
Common Stock Issued at $0.14 Per Share
  for Services Rendered                       550,000           550              -             -          76,450                -
Common Stock Issued at $0.14 Per Share
  For Services Rendered                     6,000,000         6,000              -             -         834,000                -
Common Stock Canceled                        (120,000)         (120)             -             -         (58,338)         (61,542)
Fractional Shares Issued                          832             -              -             -               -                -
Common Stock Issued for Services at $0.14
  Per Share for Services Rendered             800,000           800              -             -         111,200                -
Common Stock Canceled                        (100,000)         (100)             -             -             100                -
Common Stock Issued for Services at $0.29
  Per Share                                   275,000           275              -             -          79,475                -
Preferred Shares Issued as Consideration
  for Purchase of Subsidiary                        -             -              -             -         (40,000)               -
Common Stock Issued for Cash at $0.25 Per
  Share                                        90,000            90              -             -          22,410                -
Common Stock Issued for Services at $0.375
  Per Share                                   100,000           100              -             -          37,399                -


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

                                                                      F-8
<PAGE>
<CAPTION>
                                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                                  (A Development Stage Company)
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                             (JANUARY 1, 1994) TO DECEMBER 31, 2001


                                             Common        Common           Common      Common
                                             Stock          Stock           Stock        Stock       Additional
                                            Class A        Class A         Class B      Class B        Paid In       Accumulated
                                             Shares         Amount          Amount      Amount         Capital         Deficit
                                           ----------     ---------        -------     ---------     -----------    -------------
<S>                                        <C>            <C>              <C>         <C>           <C>            <C>
Common Stock Issued for Services at
  $0.375 Per Share                            160,000           160              -             -          59,840                -
Net Loss, Year Ended December 31, 2000              -             -              -             -               -       (3,213,115)
                                           ----------     ---------        -------     ---------     -----------    -------------
Balance, December 31, 2000                  8,121,907         8,122        100,000         1,000      14,622,730      (15,981,155)
Common Stock Issued for Cash at $0.20 Per
  Share, February 23, 2001                      2,500             3              -             -             497                -
Common Stock Issued for Cash at $0.25 Per
  Share, January 5, 2001                       45,000            45              -             -          11,205                -
Common Stock Issued for Services at $0.20
  Per Share, January 4, 2001                  600,000           600              -             -         119,400                -
Common Stock Issued for Services at $0.28
  Per Share, March 6, 2001                    200,000           200              -             -          55,800                -
Common Stock Issued for Services at $0.06
  Per Share, March 23, 2001                   200,000           200              -             -          11,800                -
Common Stock Canceled, March 28, 2001        (100,000)         (100)             -             -             100                -
Correction in Common Stock Issued at $0.20
  Per Share, April 2, 2001                   (100,000)         (100)             -             -         (19,900)               -
Common Stock Issued for Services at $0.05
  Per Share, April 5, 2001                     50,000            50              -             -           2,450                -
Common Stock Issued for Services at $0.10
  Per Share, April 10, 2001                   350,000           350              -             -          34,650                -
Common Stock Issued for Services at $0.05
  Per Share, April 30, 2001                   100,000           100              -             -           4,900                -
Common Stock Issued for 100% Ownership of
  Newly Formed Subsidiary, May 9, 2001
                                            7,200,000         7,200              -             -          (7,200)               -
Common Stock Issued for Services at $0.04
  Per Share, May 11, 2001                     400,000           400              -             -          15,600                -
Common Stock Issued for Services at $0.11
  Per Share, May 15, 2001                     600,000           600              -             -          65,400                -
Common Stock Issued for Services at $0.09
  Per Share, May 21, 2001                     400,000           400              -             -          35,600                -
Common Stock Issued for Services at $0.16
  Per Share, May 31, 2001                     550,000           550              -             -          87,450                -
Common Stock Issued for Services at $0.16
  Per Share, June 18, 2001                    500,000           500              -             -          79,500                -
Common Stock Issued for Services at $0.15
  Per Share, June 20, 2001                  2,150,000         2,150              -             -         320,350                -
Common Stock Issued for Services at $0.17
  Per Share, June 5, 2001                     200,000           200              -             -          33,800                -
Common Stock Issued for Cash at $0.001
  Per Share, July 12, 2001                     10,000            10              -             -             990                -


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

                                                                    F-9
<PAGE>
<CAPTION>
                                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                                  (A Development Stage Company)
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                             (JANUARY 1, 1994) TO DECEMBER 31, 2001


                                             Common        Common           Common      Common
                                             Stock          Stock           Stock        Stock       Additional
                                            Class A        Class A         Class B      Class B        Paid In       Accumulated
                                             Shares         Amount          Amount      Amount         Capital         Deficit
                                           ----------     ---------        -------     ---------     -----------    -------------
<S>                                        <C>            <C>              <C>         <C>           <C>            <C>
Common Stock Issued for Services at
   $0.24 Per Share, July 12, 2001           2,579,500         2,579              -             -         616,501                -
Common Stock Issued for Services at
   $0.24 Per Share, July 12, 2001           1,800,000         1,800              -             -         430,200                -
Common Stock Issued for Services at
   $0.20 Per Share, July 24, 2001           6,450,000         6,450              -             -       1,283,550                -
Common Stock Issued for Services at
   $0.20 Per Share, July 24, 2001             800,000           800              -             -         159,200                -
Common Stock Issued for Services at
   $0.14 Per Share, August 15, 2001           700,000           700              -             -          97,300                -
Common Stock Issued as Collateral for
   Loans, (August 4, 2000)                  5,927,713         5,928              -             -          (5,928)               -
Common Stock Issued for Services at
   $0.09 Per Share, August 31, 2001           150,000           150              -             -          13,350                -
Common Stock Issued for Services at
   $0.08 Per Share, September 4, 2001         500,000           500              -             -          39,500                -
Common Stock Issued for Services at
   $0.06 Per Share, September 6, 2001         500,000           500              -             -          29,500                -
Common Stock Issued for Services at
   $0.03 Per Share, September 24, 2001        500,000           500              -             -          14,500                -
Common Stock Canceled                      (7,200,000)       (7,200)             -             -           7,200                -
Common Stock Canceled                       (500,000)         (500)              -             -             500                -
Shares Issued in Exchange for 300,000
   Shares of Growth Fund Partnership,Inc.           -             -              -             -         (30,000)               -
Common Stock Issued for Insurance
   Guarantee at $0.03 Per Share,
   October 17, 2001                         2,500,000         2,500              -             -          72,500                -
Common Stock Issued for Services at
   $0.07 Per Share, October 19, 2001          130,000           130              -             -           8,970                -
Common Stock Issued for Collateral on
   Loan at $0.07 Per Share,
   October 19, 2001                         4,800,000         4,800              -             -         331,200                -



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

                                                                F-10
<PAGE>
<CAPTION>
                                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                                  (A Development Stage Company)
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                             (JANUARY 1, 1994) TO DECEMBER 31, 2001


                                             Common        Common           Common      Common
                                             Stock          Stock           Stock        Stock       Additional
                                            Class A        Class A         Class B      Class B        Paid In       Accumulated
                                             Shares         Amount          Amount      Amount         Capital         Deficit
                                           ----------     ---------        -------     ---------     -----------    -------------
<S>                                        <C>            <C>              <C>         <C>           <C>            <C>
Common Stock Issued for Services
     Rendered at $0.07 Per Share,
     October 25, 2001                         750,000           750              -             -          51,750                -
Common Stock Issued for Services at
     $0.5 Per Share, November 6, 2001
                                            2,000,000         2,000              -             -          98,000                -
Common Stock Issued for Collateral on
     Loan at $0.03 Per Share, November
     12, 2001                               1,200,000         1,200              -             -          34,800                -
Common Stock Issued for Services
     Rendered at $0.03 Per Share,
     November 12, 2001                      1,500,000         1,500              -             -          43,500                -
Common Stock Issued for Insurance
     Guarantee at $0.03 Per Share,
     November 12, 2001                        500,000           500              -             -          14,500                -
Common Stock Issued for Services at
     $0.06 Per Share, November 19, 2001
                                              200,000           200              -             -          11,800                -
Common Stock Issued for Services at
     $0.04 Per Share, December 12, 2001
                                              600,000           600              -             -          23,400                -
Common Stock Issued for Services at
     $0.04 Per Share, December 19, 2001
                                              200,000           200              -             -           7,800                -
Common Stock Issued for Services at
     $.05 Per Share, December 31, 2001
                                              500,000           500              -             -          24,500                -
Preferred Stock Dividend (Note 5)                                                                        (13,169)
Accounts payable and accrued expenses
     converted to capital                                                                                743,837
Net Loss, Year Ended December 31, 2001              -             -              -             -               -       (4,548,218)
                                           ----------     ---------        -------     ---------     -----------    -------------

Balance, December 31, 2001                 48,566,620     $  48,567        100,000     $   1,000     $19,583,883    $ (20,529,373)
                                           ==========     =========        =======     =========     ===========    =============

Accumulated Deficit:
   Prior to the Development Stage                                                                                   $  (8,390,740)
                                                                                                                    =============

   During the Development Stage                                                                                     $ (12,138,633)
                                                                                                                    =============

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

                                                                    F-11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                              EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                          (A Development Stage Company)
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000, AND FOR THE
                                 PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                     (JANUARY 1, 1994) TO DECEMBER 31, 2001



                                                                      Year Ended       Year Ended       Loss Accumulated
                                                                     December 31,     December 31,         During the
                                                                         2001             2000          Development Stage
                                                                     -------------    ------------      -----------------
<S>                                                                   <C>              <C>               <C>
Cash Flows From Operating Activities
Net Loss                                                              $  (4,548,218)   $  (3,213,115)    $ (12,138,633)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating
Activities:
     Common Stock Issued for Services                                     4,288,180        2,372,646         6,945,643
     Preferred Stock Issued for Services                                          -                -            10,400
     Depreciation and Amortization                                                -                -            70,532
     Bad Debt Expense                                                         4,059            7,000           140,299
     Loss on Disposal of Assets and Partnership Interests                         -                -         2,364,508
     Discontinued Operations                                                      -                -           456,078
Changes in Assets and Liabilities
   (Increase) Decrease in Accounts Receivable                                     -                -            20,921
    Increase (Decrease) in Accounts Payable                                 122,007          659,160           874,185
    Increase (Decrease) in Accrued Expenses                                  59,881           40,410           162,554
                                                                      -------------    -------------     -------------
Total Adjustments                                                         4,474,127        3,079,216        11,045,120
                                                                      -------------    -------------     -------------
Net Cash Flows Used In Operating Activities                                 (74,091)        (133,899)       (1,093,513)

Cash Flows From Investing Activities
   Increase in Notes Receivable                                                   -          (11,059)          (11,059)
   Sale of Land                                                                   -                -            (3,201)
   Other                                                                          -                -            64,000
                                                                      -------------    -------------     -------------
Net Cash Flows Provided By (Used in) Investing Activities                         -          (11,059)           49,740

Cash Flows From Financing Activities
   Sale of Common Stock for Cash                                             12,750           22,500           323,050
   Sale of Preferred Stock for Cash                                               -                -           209,500
   Proceeds from Long-Term Debt                                              61,300          132,100           527,335
   Principle Payments on Long-Term Debt                                           -          (10,000)          (15,500)
                                                                      -------------    -------------     -------------
Net Cash Flows Provided By Financing Activities                              74,050          144,600         1,044,385
                                                                      -------------    -------------     -------------

Increase (Decrease) in Cash and Cash Equivalents                                (41)            (358)              612
Cash and Cash Equivalents, Beginning of Year                                    653            1,011                 -
                                                                      -------------    -------------     -------------
Cash and Cash Equivalents, End of Year                                $         612    $         653     $         612
                                                                      =============    =============     =============
Cash paid for:
   Interest                                                           $      28,000    $           -     $      36,509
                                                                      =============    =============     =============
   Income Taxes                                                       $           -    $           -     $           -


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

                                                                       F-12
<PAGE>
<CAPTION>
                                      EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                                                  (A Development Stage Company)
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000, AND FOR THE
                                         PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                                             (JANUARY 1, 1994) TO DECEMBER 31, 2001



                                                                      Year Ended       Year Ended       Loss Accumulated
                                                                     December 31,     December 31,         During the
                                                                         2001             2000          Development Stage
                                                                     -------------    ------------      -----------------
<S>                                                                   <C>              <C>               <C>
Supplemental noncash investing and financing activities:
   Accounts payable and accrued expenses converted to capital
                                                                      $     743,837                -     $     743,837
                                                                      =============                      =============
   Common Stock Issued for Services                                   $   4,288,180    $   2,372,646     $   6,945,643
                                                                      =============    =============     =============
   Preferred Stock Issued for Services                                            -                -     $      10,400
                                                                                                         =============
   Common Stock Issued for Dividends                                              -                -     $      50,234
                                                                                                         =============
   Paid-in Capital Through Cancellation of Preferred Stock                        -                -     $     380,400
                                                                                                         =============
   Common Stock Issued for Debt                                                   -                -     $     115,428
                                                                                                         =============


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

                                                               F-13
</TABLE>
<PAGE>

              EQUITY TECHNOLOGIES & RESOURCES, INC. AND SUBSIDIARY
                          (A Development Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements presented are those of Equity Technologies
& Resources, Inc. and its wholly-owned subsidiary, Verified Prescription
Safeguards, Inc. Collectively, they are referred to herein as "the Company."

Organization and Nature of Operations.

Organization - The Company was organized on March 4, 1988 as a Delaware
corporation under the name Sherry Lynn Corporation. The Company was organized as
a public company for the purpose of finding a suitable combination partner.

On December 6, 1988, the Company changed its name to Equity Gold, Inc. The
number of shares of common stock authorized to be issued changed from 50,000,000
to 150,000,000 with a par value of $0.001 per share of common stock.

On December 14, 1989, the Company merged with Gold Equity, Inc., a Delaware
corporation. The surviving corporation was Equity Gold, Inc.

On February 7, 1989, the Company changed its name to Equity AU, Inc.

On April 14, 1989, the Company changed the number of authorized shares of common
stock to 99,900,000.

On November 7, 1991, the Company authorized 2,000,000 shares of preferred stock
with a par value of $1.00 each.

On February 19, 1992, the Company authorized 99,900,000 shares of Class A common
shares with a par value of $0.001 per share. The Company authorized 100,000
shares of Class B common shares with a par value of $0.01 per share.

From the original inception of the Company to the inception of the development
stage on January 1, 1994, the Company was heavily involved in mining and
exploration activities principally in Arkansas. The Company generated an
accumulated deficit of $8.4 million prior to the Company entering the
development stage.

In January 2000, the Company elected to change its official name from Equity AU,
Inc. to Equity Technologies & Resources, Inc.

The Company engaged in research and development of a process to extract gold and
other precious metals on various real properties located in Arkansas.
Partnerships were formed prior to 1994 by the Company or by affiliates of the
Company to raise working capital, acquire mineral claims, rights, facilities and
equipment and to explore for precious metals. In 1994, the Company was notified
by general partners of the partnerships that they were terminated and dissolved.
As a result of the dissolution of the partnerships the Company ceased its
operations and entered the development stage as per SFAS No. 7. See Note 2.

                                      F-14
<PAGE>

On December 15, 2000, the Company acquired all the issued and outstanding common
stock of Verified Prescription Safequards, Inc. ("VPS") in exchange for 40,000
shares of the Company's Class B voting preferred stock. The acquisition of VPS
was accounted for as a purchase per Accounting Principles Board No. ("APB") 16.
At the time the purchase was consummated, VPS held no assets or liabilities. The
consolidated entity elected to change its business plan toward the development
and marketing of Internet prescription drug technology. Management intends to
use the majority of funds obtained toward this development. The purchase price
of the acquired subsidiary was determined among the parties to be 40,000 shares
of Class B preferred stock redeemable at $500 per share ($20,000,000). The
preferred shares issued are redeemable for cash only at $500 per share payable
from 50% of net revenues of the subsidiary for the next seven years. The
conversion feature of the issued preferred shares allows them to be converted
into cash, pursuant to future revenues, but does not allow them to be converted
into common stock at any time

In May 2001, the Company acquired a newly formed wholly-owned subsidiary, ETCR
M&A, Inc. ("ETCR"), a Florida corporation, in exchange for 7,200,000 shares of
the Company's common stock. ETCR held no assets or liabilities at the time of
purchase and thus, the acquisition was recorded at $0 value. In November 2001,
these shares were canceled and the Company does not currently hold any interest
in ETCR.

The Company engaged in research and development of a process to extract gold and
other precious metals on various real properties located in Arkansas.
Partnerships were formed prior to 1994 by the Company or by affiliates of the
Company to raise working capital, acquire mineral claims, rights, facilities and
equipment and to explore for precious metals. In 1994, the Company was notified
by general partners of the partnerships that they were terminated and dissolved.

The Company has had no significant operations since August 1993 and entered the
development stage on January 1, 1994. During September 1996, the Company resumed
operations and again suspended operations in December 1996. The Company can make
no assumptions as to if and when operations will resume again.

Summary of Significant Accounting Policies.

Accounting Method - The Company's consolidated financial statements are prepared
using the accrual method of accounting. The Company has elected a December 31
year-end.

Principles of Consolidation - The accompanying consolidated financial statements
include those of Equity Technologies & Resources, Inc. and its wholly-owned
subsidiary, Verified Prescription Safeguards, Inc. All intercompany accounts and
transactions have been eliminated.

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.

Cash and Cash Equivalents - The Company considers all highly liquid investments
with a maturity of three months or less, from the date of purchase to be cash
equivalents.

Income Taxes - The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 109 "Accounting for
Income Taxes." Under SFAS No. 109, deferred income tax assets and liabilities
are computed for differences between the financial statements and tax bases of

                                      F-15
<PAGE>

assets and liabilities that will result in taxable or deductible amounts in the
future, based on enacted tax laws and rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances are
established when necessary, to reduce deferred income tax assets to the amount
expected to be realized. No deferred tax asset has been recognized for the
operating loss carryforward as it is more likely than not that all or a portion
of the net operating loss will not be realized and any valuation allowance would
reduce the benefit to zero.

Intangible Assets - Intangible assets represent patents and are recorded at cost
in accordance with Accounting Principles Board ("APB") Opinion No. 17,
"Intangible Assets." The Company amortizes the intangible assets using the
straight-line method over the term of the specific agreements. Continually, the
Company evaluates whether the estimated useful life used to amortize an
intangible asset is appropriate due to changing facts and circumstances
resulting in increases or decreases in the asset's estimated useful life, and
records the change prospectively.

Long-Lived Assets - The Company records impairment losses on long-lived assets
used in operation when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the assets'
carrying amount.

Earnings Per Share - Basic earnings or loss per share is based on the weighted
average number of common shares outstanding. Diluted earnings or loss per share
is based on the weighted average number of common shares outstanding and
dilutive common stock equivalents. Basic earnings/loss per share is computed by
dividing income/loss (numerator) applicable to common stockholders by the
weighted average number of common shares outstanding (denominator) for the
period. All earnings or loss per share amounts in the financial statements are
basic earnings or loss per share, as defined by SFAS No. 128, "Earnings Per
Share." Diluted earnings or loss per share does not differ materially from basic
earnings or loss per share for all periods presented. Convertible securities
that could potentially dilute basic loss per share such as preferred stock,
including preferred dividends, are not included in the computation of diluted
loss per share because to do so would be antidilutive. All per share and per
share information are adjusted retroactively to reflect stock splits and changes
in par value.

Comprehensive Income - The Company includes items of other comprehensive income
by their nature in a financial statement and displays the accumulated balance of
other comprehensive income separately from retained earnings and additional paid
in capital in the equity section of the balance sheet.

Capital Structure - The Company discloses its capital structure in accordance
with SFAS No. 129, "Disclosure of Information about Capital Structure," which
establishes standards for disclosing information about an entity's capital
structure.

Recent Accounting Pronouncements - The Financial Accounting Standards Board
("FASB") has issued the following pronouncements, none of which are expected to
have a significant affect on the financial statements:

SFAS No.141, "Business Combinations." SFAS No. 141 requires that all business
combinations be accounted for under the purchase method of accounting. SFAS No.
141 also changes the criteria for the separate recognition of intangible assets
acquired in a business combination. SFAS No. 141 is effective for all business
combinations initiated after June 30, 2001.

SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 addresses
accounting and reporting for intangible assets acquired, except for those
acquired in a business combination. SFAS No. 142 presumes that goodwill and

                                      F-16
<PAGE>

certain intangible assets have indefinite useful lives. Accordingly, goodwill
and certain intangibles will not be amortized but rather will be tested at least
annually for impairment. SFAS No. 142 also addresses accounting and reporting
for goodwill and other intangible assets subsequent to their acquisition. SFAS
No. 142 is effective for fiscal years beginning after December 15, 2001.

SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. SFAS No. 143 is effective for financial statements issued for fiscal
years beginning after June 15, 2002.

FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." This statement addresses financial accounting and reporting
for the impairment or disposal of long-lived assets. SFAS No. 144 is effective
for financial statements issued for fiscal years beginning after December 15,
2001, and interim periods within those fiscal years.

Pending Accounting Pronouncements - It is anticipated that current pending
accounting pronouncements will not have an adverse impact on the financial
statements of the Company.

NOTE 2 - GOING CONCERN

The Company has limited operations and has not been able to develop an ongoing,
reliable source of revenues to fund its existence. The Company's day-to-day
expenses have been covered by cash obtained from the issuance of stock and by
proceeds from notes payable. The adverse effect on the Company's results of
operation due to its lack of capital resources can be expected to continue until
such time as the Company is able to generate additional capital from other
sources.

These conditions raise substantial doubt about the Company's ability to continue
as a going concern. Management has implemented, or developed plans to implement,
a number of actions to address these conditions including the acquisition of
Verified Prescription Safeguards, Inc., which management believes will provide
opportunities for growth within the prescription drug and healthcare industry.

Management's plans include obtaining working capital funds by seeking additional
funding from shareholders, debt financing, and private placements of its common
stock to meet such needs. The Company relies on one of its majority shareholders
to fund working capital to meet operating needs. Therefore, for at least the
next twelve months the Company has viable plans to continue as a going concern.
Additional funding will be necessary for the Company's development plans. There
can be no assurance that additional funding will be available when needed or, if
available, that the terms of such financing will not adversely affect the
Company's results from operations.

The consolidated financial statements do not include any adjustment to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.

The continuation of the Company as a going concern is dependent upon the success
of the Company in obtaining additional funding or the success of its future
operations. The Company's ability to achieve these objectives cannot be
determined at this time. The accompanying financial statements should not be
regarded as typical for normal operating periods.

NOTE 3 - CONTINGENCIES AND COMMITMENTS

The Company owed approximately $65,000 in federal taxes and is included in
accrued expenses and is classified as a current liability. Penalties and
interest continue to accrue. Unless the Company obtains adequate funding or
financing or establishes a profitable business, the Company will have to make
plans to pay the taxes, which could have a significant impact on the Company's
business or results of operations.

                                      F-17
<PAGE>

On December 31, 1997, the Company canceled 168 Class A shares of common stock.
These shares had been authorized for issue during prior years. No details were
available as to whom the shares should be issued to. Management canceled these
shares, which resulted in contributed capital of $8,394.

On December 31, 1997, the Company canceled 98,000 shares of Class A preferred
stock, 272,200 shares of Class B preferred stock, and 10,200 shares of Class C
preferred stock. No record of owners of these shares could be determined. The
results of the cancellation of these shares was contributed capital of $380,400.
All dividends associated with the canceled shares were also canceled. The
Company may be liable to the owners of these shares, should the owners of these
shares be identified.

At December 31, 1998, a creditor made a claim for approximately $20,000.
Management contends the amount is not owed due to non-performance by the Lessor.
The amount has been due since February 1994.

At December 31, 1998, a creditor made a claim for approximately $19,000.
Management contends the amount is not owed due to non-performance by the
creditor. The amount has been due since June 1996. During the year ended
December 31, 2000, the Company received a loan from an unrelated party for
$75,000. As part of the agreement, the Company guaranteed payment from a third
party to the same creditor for an additional $75,000. Should the third party
default on the loan, the Company may be held liable for the $75,000 plus
interest.

On July 19, 2001, the Company signed a purchase order to purchase 1,000
MEDTURFTM appliances over the next 24 months from MB Software Corporation at
$450 per unit. The Company agreed to pay $7,250 to MB Software, Inc. within ten
days of the date of the purchase order and the letter of intent between Medeway,
Inc. ("Medeway") and the Company (also dated July 19, 2001), which represented
one-half of the total amount payable for 10 appliances and programming work to
be performed, with the balance of $7,250 to be paid upon the delivery of said
appliances. The MEDTURF appliance is a combination of a computer appliance and
point of sale device, and is designed for physician practices, pharmacies, and
home use. The MEDTURF appliance has a proprietary 'touchscreen' application
installed. Medeway is the owner of the intellectual property, which is being
used by over 4,500 physicians under contract with Medeway and/or its affiliates.
The Company plans to install the patent-pending system of Verified Prescription
Safeguards, Inc. ("VPS"), the Company's subsidiary which is developing a system
for electronically transmitting prescriptions using the Internet. The Company's
future minimum purchase commitments over the next twenty-four months are
$450,000. As of December 31, 2001, the Company has paid $7,250 to MB Software,
Inc.

On August 1, 2001, the Company entered into an agreement for consulting services
with HEB, LLC, a Nevada limited liability company, based on a one-year term and
a fee of $100,000, payable upon services rendered and presentation of an
invoice. The consulting services included organizing and assisting the Company,
including any subsidiaries or affiliates, in areas including, but not limited
to, identifying and implementing appropriate incentive participation programs
for prescribing physicians, pharmacies, pharmaceutical companies, HMO's and
insurers. As of December 31, 2001, no amount has been provided for in these
financial statements as no services have been rendered.

During August 2001, the Company entered into an agreement for consulting
services and issued 250,000 shares of common stock as payment of services
rendered. The balance due under the agreement is $70,000, however, the
consultant has not performed any work and the Company contends the consultant is
in breach of contract due to non-performance. No accrual has been provided for
in these financial statements.

                                      F-18
<PAGE>

NOTE 4 - NOTES PAYABLE

Notes payable of the Company are as follows at December 31, 2001:

Unsecured notes payable to a related
party, $165,500 past due, bearing interest at
12%;  $41,400 due in one year, bearing 10% interest.             $    206,900

Unsecured promissory notes bearing interest at 10%.
Interest payable annually in either stock or cash,
or both. The lenders may earn bonus distributions based
on the productivity of mining operations. Due on demand.                6,000

Non-interest bearing notes payable to various parties,
secured by guarantees of common stock. Due on demand.                  125,500

Unsecured, non-interest bearing notes payable
to various related parties. Due on demand.                            157,500
                                                                 ------------

Total                                                                 495,900
Less related party notes                                             (364,400)
                                                                 ------------
Total notes payable                                                   131,500
Less current portion                                                 (131,500)
                                                                 ------------
Total Long-Term Debt                                             $          -


NOTE 5 - CAPITAL STOCK

Preferred Stock - Series A
The Company is authorized to issue 2,000,000 shares of non-voting preferred
shares, at a par value of $1.00 per share. These shares accrue a 10% dividend
annually. The cumulative amount of dividend was $35,000 and $30,000 at December
31, 2001 and 2000, respectively. These preferred shares are convertible into
Class A common stock at a conversion rate of 5.5 common shares for each
preferred share. There were 50,000 shares issued and outstanding at December 31,
2001 and 2000, respectively.

Dividends paid during 1995 amounted to $17,717 for 1993 and $14,800 for 1994. No
dividends have been paid since 1995.

On June 28, 2001, the Board of Directors of the Company approved a preferred
stock dividend for the benefit of the Company's common stockholders. One share
of Class A, non-voting, convertible preferred stock, with a face value of
$500.00 was issued for every 500 shares of common stock to shareholders of
record on July 16, 2001. The preferred stock is convertible into common stock
during the thirty-day period immediately following the one-year anniversary of
the record date, July 16, 2002. Each share of preferred stock is convertible
into common stock with a total value of $500 at the conversion rate of 90% of
the average of the closing bid and asking price for the common stock of the
Company during the twenty days immediately preceding the specific date the
preferred shareholder gives notice to convert. No officers, directors, or
holders of fewer than 500 shares, or fraction thereof, were eligible for the
preferred stock dividend or conversion. There were 13,169 total preferred shares
issued in connection therewith. The fair market value of the preferred stock
dividend was determined to be zero because the Company is a development stage
company with no significant assets and no cash flows from operating activities
since inception. Accordingly, the preferred stock dividend was accounted for by
transferring $13,169 from additional paid in capital to preferred stock.

                                      F-19
<PAGE>

Preferred Stock - Class B
The company is authorized to issue 300,000 shares of voting preferred shares, at
a par value of $1.00 per share. These shares accrue a 10% dividend payable
annually on June 30 of each year. The cumulative amount of dividend was $4,000
at December 31, 2001. In December 2000, the Company issued 40,000 shares of
voting, Class B preferred stock in exchange for all the outstanding shares of
Verified Prescription Safeguards, Inc. (Note 1) These preferred shares are not
convertible into shares of common stock.

In June 2001, the Company issued 30,000 shares of voting, Class B preferred
stock in exchange for 300,000 shares of Growth Fund Partnership, Inc. ("Growth
Fund") common stock. The Company agreed to pay a dividend on the Class B
preferred stock on June 1, 2003 in cash equal to two percent of the value of the
Class B Preferred Stock, or in restricted Class A common stock equal to three
percent of the value of the Class B Preferred Stock. Additionally, in the event
the Company uses the common stock of Growth Fund to anchor or establish a credit
facility in its favor, the Company agrees to pay Growth Fund one-half of the
cash dividend referred to above, or one percent of the value of the Class B
Preferred Stock at closing of the credit facility, notice of which shall be
given by the Company to Growth fund at least ten days prior thereto. The
acquisition was recorded at $0.

The cumulative amount of dividends was $1,750 at December 31, 2001. As of
December 31, 2001, there were 70,000 shares outstanding.

Preferred Stock - Class C
The Company is authorized to issue 100,000 shares of non-voting preferred shares
at a par value of $1.00 per share. These shares accrue a 10% dividend annually.
The cumulative amount of dividend was $0 at December 31, 2001. These preferred
shares are convertible into Class A common stock at a conversion rate of 12
common shares for each preferred share. There were $-0- shares issued and
outstanding at December 31, 2001. Management canceled all outstanding shares and
related dividends payable in 1997.

Common Stock - Class A
The Company is authorized to issue 99,900,000 Class A common shares, at a par
value of $0.001 per share. These shares have full voting rights.

In October 1997, the Company issued 1,830 post-split shares of Class A common
stock for cash and mining rights. These shares were canceled due to
non-performance of the terms of the agreements. 297 shares were used to settle
debt of the Company. 1,503 shares were returned in June 1998. At December 31,
1999, 25 remained outstanding.

In September 1997, the Company authorized a reverse stock split of 100-for-1.
Shares outstanding have retroactively been restated.

The Company issued 32 and 27 shares as dividends in 1995 for 1993 and 1994
dividends accrued.

In May 1995, the Company issued in error 1,923 shares to a related party that
were returned to the Company and canceled during 1996. There was no
consideration exchanged in the issuance or cancellation of these shares.

In June 2000, the Company issued 166,628 shares of its series A common stock to
related parties at $0.14 per share as consideration for services rendered. The
shares were valued at fair market value at the time of the issuance.

                                      F-20
<PAGE>

In July 2000, the Company elected to reverse-split its series A common shares on
a 1:50 basis, leaving 366,900 shares issued and outstanding after the split. All
previously issued shares have been retroactively restated in the accompanying
statement of stockholders' equity to reflect this stock split.
In August 2000, the Company reacquired 6,000,000 shares of common stock from a
director in exchange for a promissory note for $120,000 payable to the director.
The promissory note for $120,000 is included in notes payable-related party and
is classified as a current liability. The 6,000,000 (120,000 post-split) shares
were subsequently canceled.

On August 7, 2000, the Company issued 6,000,000 shares of Class A common stock
(par value $0.001) to the President of the Company for consulting services
rendered, valued at the fair market value on the date of issuance of $0.14 per
share. The shares were exempt from registration pursuant to Sections 4(2) or
3(b) under the Securities Act. No underwriting or other commissions were paid in
connection with the issuance of these shares.

In August 2000, the Company issued 1,350,000 post-split shares of Series A
common stock for services rendered. The shares were valued at $0.14 per share,
which was the fair market value of the shares at the date of the issuance.

In October 2000, the Company elected to cancel 100,000 shares of its Series A
common stock.

In November and December of 2000, the Company issued 535,000 shares in exchange
for services rendered. The shares were valued at $0.25 - $0.38 per share based
upon the market value of the stock at the issuance dates.

In November 2000, the Company issued 90,000 shares of its common stock for
$22,500 in cash.

On February 23, 2001, the Company issued 2,500 shares of common stock at $0.20
per share for cash. The shares were valued at the fair market rate on the date
of issuance.

On January 5, 2001, the Company issued 45,000 shares of common stock at $0.25
per share for cash. The shares were valued at the fair market rate on the date
of issuance.

On January 4, 2001, the Company issued 600,000 shares of common stock at $0.20
per share for services rendered.

On March 6, 2001, the Company issued 200,000 shares of common stock for services
rendered $0.28 per share. The shares were valued at the fair market value on the
date of issuance.

On March 23, 2001, the Company issued 200,000 shares of common stock for
services rendered at $0.06 per share. The shares were valued at the fair market
value on the date of issuance.

On March 28, 2001, the Company canceled 100,000 shares of common stock.

On April 2, 2001, the Company canceled 100,000 shares of common stock previously
issued for services rendered.

On April 5, 2001, the Company issued 50,000 shares of common stock at $0.05 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On April 10, 2001, the Company issued 350,000 shares of common stock at $0.10
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

                                      F-21
<PAGE>

On April 30, 2001, the Company issued 100,000 shares of common stock at $0.05
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On May 9, 2001, the Company issued 7,200,000 shares of common stock at$ 0 for
100% acquisition of ECTR M&A, Inc., a newly formed subsidiary with no assets or
liabilities. These shares were canceled in November 2001 and the Company does
not currently hold any interest in ETCR.

On May 11, 2001, the Company issued 400,000 shares of common stock at $0.04 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On May 15, 2001, the Company issued 600,000 shares of common stock at $0.11 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On May 21, 2001, the Company issued 400,000 shares of common stock at $0.09 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On May 31, 2001, the Company issued 550,000 shares of common stock at $0.16 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On June 18, 2001, the Company issued 500,000 shares of common stock at $0.16 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On June 20, 2001, the Company issued 2,150,000 shares of common stock at $0.15
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On June 5, 2001, the Company issued 200,000 shares of common stock at $0.17 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On July 12, 2001, the Company issued 10,000 shares of common stock at $.001 per
share for cash of $1,000.

On July 12, 2001, the Company issued 4,379,500 shares of common stock at $0.24
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On July 24, 2001, the Company issued 6,450,000 shares of common stock at $0.20
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On July 24, 2001, the Company issued 800,000 shares of common stock at $0.20 per
share for services rendered. The shares were valued at the fair market value on
the date of issuance.

On August 15, 2001, the Company issued 700,000 shares of common stock at $0.14
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

In August 2001, 5,927,713 additional shares were issued representing post-split
shares from August 2000 that never got issued.

On August 31, 2001, the Company issued 150,000 shares of common stock at $0.09
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On September 4, 2001, the Company issued 500,000 shares of common stock at $0.08
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

                                      F-22
<PAGE>

On September 6, 2001, the Company issued 500,000 shares of common stock at $0.06
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On September 24, 2001, the Company issued 500,000 shares of common stock at
$0.03 per share for services rendered. The shares were valued at the fair market
value on the date of issuance.

October 17, 2001, the Company issued 2,500,000 shares of common stock at $0.03
per share for an insurance guarantee on a policy. The shares were valued at the
fair market value on the date of issuance.

On October 19, 2001, the Company issued 4,930,000 shares of common stock at
$0.07 per share for services rendered and as collateral on a related party loan.
The shares were valued at the fair market value on the date of issuance.

On October 25, 2001, the Company issued 750,000 shares of common stock at $0.07
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On November 6, 2001, the Company issued 2,000,000 shares of common stock at
$0.05 per share for services rendered. The shares were valued at the fair market
value on the date of issuance.

On November 12, 2001, the Company issued 3,200,000 shares of common stock at
$.03 per share for services rendered, collateral on a related party loan, and an
insurance guarantee. The shares were valued at the fair market value on the date
of issuance.

On November 19, 2001, the Company issued 200,000 shares of common stock at $0.06
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On December 12, 2001, the Company issued 600,000 shares of common stock at $0.04
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On December 19, 2001, the Company issued 200,000 shares of common stock at $0.04
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

On December 31, 2001, the Company issued 500,000 shares of common stock at $0.05
per share for services rendered. The shares were valued at the fair market value
on the date of issuance.

Common Stock - Class B
The Company is authorized to issue 100,000 shares of its Class B common shares
at a par value of $0.01 per share. The Class B shares have the right to elect a
majority of the Board of Directors of the Company. There were 100,000 shares
issued and outstanding as of September 30, 2001. All Class B shares of common
stock are held by a director at December 31, 2001.

NOTE 6 - RELATED PARTY TRANSACTIONS

Arkansas American Mining and Exploration, Inc. (AAME) was owned and controlled
by the founders of the Company. In 1988, AAME exchanged mining claims, milling
facility and a core drilling rig, for the Company's common stock.

In 1994, Arkansas Mineral Partners Ltd., a partnership owed by James Arch, a
former President of the Company, loaned the Company $152,000 secured by the
Company's land, buildings, and equipment. This note, plus interest, was due in
the fourth quarter of 1996. The Company defaulted on the note. The property and
equipment were claimed by the note holder and written off by the Company. All
obligations of the Company have been fully satisfied.

                                      F-23
<PAGE>

During 1995, the Company paid $25,000 for services rendered by Stephen Guarino,
former Director, President & CEO of the Company, and issued 2,500,000 shares of
Class A common stock for additional services valued at $26,225.

During 1997, the Company issued 1,029,500 shares of common A stock to James
Arch, a former President of the Company for services valued at $102,000. An
agreement has been made with this former officer for continued consulting
services which agreement is no longer in effect.

On December 23, 1998, the Company borrowed $61,000 from Kentrust, Inc., an
entity whose CEO is Frank G. Dickey, Jr., a director and current President of
the Company. The note carried a 10% interest rate, and was due on December 23,
1999. In 1999, the Company borrowed an additional $104,500 from Kentrust at 10%.
During 2000, the entire $165,500 became overdue and began accruing interest at a
rate of 12% per annum. A $16,550 penalty for late payment was also levied
against the Company. The note does not have any new repayment date. During 2001,
Kentrust loaned the Company an additional $41,400, which is accruing interest at
10% per annum, with repayment due on or before December 31, 2001. The principal
balance on this note outstanding at December 31, 2001 was $206,900. Accrued
interest on these notes as of December 31, 2001 was $57,176.

Included in accrued expenses at December 31, 2000, was $570,000 representing
amounts due to certain officers pursuant to various employment contracts as
follows: the President and majority stockholder, Frank Dickey, Jr., for his
services provided during the period November 1, 1998 through December 31, 2000
as President ($300,000) and during the period January 1, 1999 through December
31, 2000 as Chief Financial Officer ($120,000); and Laura G. White, Vice
President for her services provided during the period January 1, 2000 through
December 31, 2000 ($90,000) for Vice President and Investor Relations, and
during the period January 1, 1999 to December 31, 1999 for her services as
Secretary ($60,000). The employment contracts expire in December 2002. During
2001, management terminated the contracts due to lack of working capital and
converted the payroll liabilities to additional paid in capital. Additionally,
the Company converted accrued expenses of $173,837 to additional paid in
capital, which represented the balance of unpaid expenses incurred for the lease
of office space, furniture and equipment, and vehicle at $7,637 per month for
the period of January 1, 2000 to December 31, 2001, from its president. The
Company continues to charge $7,637 per month for these incidental expenses,
which are reflected as a charge to the statement of operations with an offset to
additional paid in capital.

                                      F-24
<PAGE>

NOTE 7 - DISCONTINUED OPERATIONS

In June 1995, the Company suspended its mining research activities and
development work in Arkansas. The following is a summary of the loss from
discontinued operations resulting from the suspended operations of its mining
operations located in Arkansas. The consolidated financial statements have been
retroactively restated to reflect this event. There was no activity during the
years ended December 31, 2001 and 2000. Loss from discontinued operations for
the period from inception of the development stage on January 1, 1994 through
December 31, 2001 is as follows:

SALES                                                           $            -

COST OF SALES                                                           33,817
                                                                --------------

GROSS MARGIN                                                           (33,817)
                                                                --------------

OPERATING EXPENSES                                                   1,399,405
                                                                --------------

LOSS FROM OPERATIONS                                                (1,433,222)
                                                                --------------

OTHER INCOME (EXPENSE)
  Other income                                                              41
  Interest expense                                                     (40,953)
  Other expense                                                        (30,185)
  Gain on sale of land                                                  30,840
  Loss on disposal of assets                                           (75,667)
  Loss on partnership interests                                     (2,288,841)
                                                                --------------
     Total Other Income (Expense)                                   (2,404,765)
                                                                --------------

LOSS BEFORE INCOME TAX EXPENSE                                      (3,837,987)
                                                                --------------

INCOME TAX EXPENSE                                                           -
                                                                --------------

LOSS FROM DISCONTINUED OPERATIONS                               $   (3,837,987)
                                                                ==============

DIVIDEND ON PREFERRED STOCK                                     $      (32,517)
                                                                ==============

                                      F-25