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

                                   FORM 10-KSB





ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF
1934 For the fiscal year ended December 31, 2000
                               -----------------

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from                    to
                                      ------------------     -------------------

Commission File Number:  000-31799
                        ------------

                                   Spruce Corp.
             (Exact name of registrant as specified in its charter)
Nevada                                                                33-0927947
                                                                      ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

23 Corporate Plaza, Suite 180, Newport Beach, California                   92663
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

                                 (949) 720-7320
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

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


 Title of Each Class                              Name of Each Exchange on which
 to be so Registered:                            Each Class is to be Registered:
 --------------------                            -------------------------------
         None                                           None

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

Common Stock, Par Value $.001                   Preferred Stock, Par Value $.001
-----------------------------                   --------------------------------
(Title of Class)                                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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. (X)Yes ( )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.( )

State issuer's revenues for its most recent fiscal year. $0.00

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) As of March 30, 2001, approximately $0.00.

As of March 30, 2001, there were 5,000,000 shares of the issuer's $.001 par
value common stock issued and outstanding.

Documents incorporated by reference. There are no annual reports to security
holders, proxy information statements, or any prospectus filed pursuant to Rule
424 of the Securities Act of 1933 incorporated herein by reference.

Transitional Small Business Disclosure format (check one):

                            Yes  ( )           No  (X)


                                       1
<PAGE>


                                     PART I

Item 1. Description of Business.



Our Background. Spruce Corp., a Nevada corporation, was incorporated in the
State of Nevada on or about September 8, 2000. Our executive offices are located
at 23 Corporate Plaza, Suite 180, Newport Beach, California. Our telephone
number is 949.720.7320.

Our Business. We were incorporated as a development stage or shell corporation
that seeks to identify and complete a merger or acquisition with a private
entity whose business presents an opportunity for our shareholder. We will
review and evaluate business ventures for possible mergers or acquisitions. We
have not yet entered into any agreement, nor do we have any commitment or
understanding to enter into or become engaged in a transaction. Further, our
objectives, discussed herein, are extremely general and are not intended to
restrict our discretion.

A decision to participate in a specific business opportunity will be made based
upon our analysis of the quality of the prospective business opportunity's
management and personnel, assets, the anticipated acceptability of products or
marketing concepts, the merit of a proposed business plan, and numerous other
factors which are difficult, if not impossible, to analyze using any objective
criteria.

We have no plans or arrangements proposed or under consideration for the
issuance or sale of additional securities, prior to the identification of a
business opportunity. Consequently, we anticipate that we will initially be able
to participate in only one business opportunity, due primarily to our limited
capital. The resulting lack of diversification should be considered a
substantial risk, as we will not be able to offset potential losses from one
venture against gains from another.

Potential Target  Companies.  A business entity, if any, which may be interested
in a business combination with us may include the following:

o        a company  for which a primary  purpose of  becoming  public is the use
         of its securities for the acquisition of assets or businesses;
o        a company  which is  unable to find an  underwriter  of its  securities
         or is unable to find an underwriter of securities on terms acceptable
         to it;
o        a company which wishes to become public with less dilution of its
         common stock than would occur upon an initial public offering;
o        a company which believes that it will be able to obtain investment
         capital on more favorable terms after it has become public;
o        a foreign  company  which may wish an initial  entry  into the  United
         States securities market;
o        a special  situation  company,  such as a company  seeking a public
         market to satisfy redemption requirements under a qualified Employee
         Stock Option Plan; or
o        a company  seeking one or more of the other  perceived  benefits of
         becoming a public company.

A business combination with a target company will normally involve the issuance
to the target company of the majority of our issued and outstanding common
stock, and the substitution by the target company of its own management and
board of directors.

We cannot assure you that we will be able to enter into a business combination,
as to the terms of a business combination, or as to the nature of the target
company.

The proposed business activities described herein classify us as a "blank check"
company. The Securities and Exchange Commission and certain states have enacted
statutes, rules and regulations limiting the sale of securities of blank check
companies. We will not issue or sell additional shares or take any efforts to
cause a market to develop in our securities until such time as we have
successfully implemented our business plan and we are no longer classified as a
blank check company.

Government Regulation. It is impossible to anticipate government regulations, if
any, to which we may be subject until we have acquired an interest in a
business. The ownership or use of assets to conduct a business which we may
acquire could subject us to environmental, public health and safety, land use,
trade, or other governmental regulations and state or local taxation. In
selecting a business in which to acquire an interest, we will endeavor to
ascertain, to the extent of our limited resources, the effects of such
government regulation on our prospective business. In certain circumstances,


                                       2
<PAGE>


however, such as the acquisition of an interest in a new or start-up business
activity, it may not be possible to predict with any degree of accuracy the
impact of government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will make the
acquisition of an interest in such business a greater risk.

Competition. We will be involved in intense competition with other business
entities, many of which will have a competitive edge over us by virtue of their
stronger financial resources and prior experience in business. We cannot assure
you we will be successful in obtaining suitable business opportunities.

Employees. We are a development stage company and currently have no employees.
Our executive officers will devote only such time to our affairs as they deem
appropriate, which is estimated to be approximately five (5) hours per month. We
expect to use consultants, attorneys, and accountants, as necessary, and do not
anticipate a need to engage any full-time employees so long as we are
identifying and evaluating businesses. The need for employees and their
availability will be considered in connection with a decision whether or not to
acquire or participate in a specific business venture.

Item 2.  Description of Property.

Property held by Us. We have no properties at this time and we have no
agreements to acquire any properties. Our offices are provided to us at no
charge by Tomas Forss, our sole officer and director. Mr.Forss has agreed
to continue this arrangement until we complete a business combination.

Our Facilities. At this time, we occupy facilities provided by our sole officer
and sole director at no charge to us. This office space is located at 23
Corporate Plaza, Suite 180, Newport Beach, California.

Item 3.  Legal Proceedings.

We are not aware of any pending litigation nor do we have any reason to believe
that any such litigation exists.

Item 4.  Submission of Matters to Vote of Security Holders

Not applicable.

                                     PART II

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

Reports to Security Holders. We are a reporting company with the Securities and
Exchange Commission. The public may read and copy any materials filed with the
SEC at the SEC's Public Reference Room at 450 Fifth Street N.W., Washington,
D.C. 20549. The public may also obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. The address
of that site is http://www.sec.gov.

There are no outstanding options or warrants to purchase, or securities
convertible into, shares of our common stock. There are no outstanding shares of
our common stock that could be sold pursuant to Rule 144 pursuant to the
Securities Act of 1933 or that we have agreed to register under the Securities
Act of 1933 for sale by security holders. The number of holders of record of
shares of our common stock is one (1).

There have been no cash dividends declared on our common stock. Dividends are
declared at the sole discretion of our Board of Directors.

Following a business combination, a target company will normally wish to cause
our common stock to trade in one or more United States securities markets. The
target company may elect to take the actions required for such trading following
the business combination or at some later time.

In order to qualify for listing on the Nasdaq Small Cap Market, a company must
meet the following minimum criteria:


                                       3
<PAGE>



o        net tangible assets of $4,000,000 or market  capitalization  of
         $50,000,000 or net income for two of the last three fiscal years of
         $750,000;
o        public float of 1,000,000 shares with  a market value of $5,000,000;
o        a bid price of $4.00;
o        three market makers;
o        300 shareholders; and
o        an  operating  history of one year or, if less than one year,
         $50,000,000  in market capitalization.

For continued listing on the Nasdaq Small Cap Market, a company must meet the
following minimum criteria:

o        net tangible assets of $2,000,000 or market capitalization of
         $35,000,000 or net income for two of the last three fiscal years of
         $500,000;
o        a public float of 500,000 shares with a market value of $1,000,000;  a
         bid price of $1.00;
o        two market makers; and
o        300 shareholders.

If, after a business combination, we do not meet the qualifications for listing
on the Nasdaq Small Cap Market, we may apply for quotation of our securities on
the OTC Bulletin Board. In certain cases, we may elect to have our securities
initially quoted in the "pink sheets" published by the National Quotation
Bureau, Inc.

To have our securities quoted on the OTC Bulletin Board we must:

o        report our current financial information to the Securities and Exchange
         Commission, banking regulators or insurance regulators;
o        have at least one market maker who completes and files a Form 211 with
         NASD Regulation, Inc.

The OTC Bulletin Board is a dealer-driven quotation service. Unlike the Nasdaq
Stock Market, companies cannot directly apply to be quoted on the OTC Bulletin
Board, only market makers can initiate quotes, and quoted companies do not have
to meet any quantitative financial requirements. Any equity security of a
reporting company not listed on the Nasdaq Stock Market or on a national
securities exchange is eligible.

In general, there is greatest liquidity for traded securities on the Nasdaq
Small Cap Market, less on the OTC Bulletin Board, and least by quotation by the
National Quotation Bureau, Inc. on the "pink sheets". It is not possible to
predict where, if at all, our securities will be traded following a business
combination.

Penny Stock Regulation. Shares of our common stock are subject to rules adopted
by the Securities and Exchange Commission that regulate broker-dealer practices
in connection with transactions in "penny stocks". Penny stocks are generally
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in those securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Securities and Exchange Commission, which
contains the following:

o        a description of the nature and level of risk in the market for penny
         stocks in both public offerings and secondary trading;
o        a description of the broker's or dealer's duties to the customer and of
         the rights and remedies available to the customer with respect to
         violation to such duties or other requirements of securities' laws;
o        a brief, clear, narrative description of a dealer market, including
         "bid" and "ask" prices for penny stocks and the significance of the
         spread between the "bid" and "ask" price;
o        a toll-free telephone number for inquiries on disciplinary actions;
o        definitions of significant terms in the disclosure document or in the
         conduct of trading in penny stocks; and
o        such other information and is in such form (including language, type,
         size and format), as the Securities and Exchange Commission shall
         require by rule or regulation.


                                       4
<PAGE>

Prior to effecting any transaction in penny stock, the broker-dealer also must
provide the customer the following:

o        the bid and offer quotations for the penny stock;
o        the compensation of the broker-dealer and its salesperson in the
         transaction;
o        the number of shares to which such bid and ask prices apply, or other
         comparable information relating to the depth and liquidity of the
         market for such stock; and
o        monthly account statements showing the market value of each penny stock
         held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for a stock that becomes subject to the penny stock rules.
Holders of shares of our common stock may have difficulty selling those shares
because our common stock will probably be subject to the penny stock rules.

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

This following information specifies certain forward-looking statements of
management of the company. Forward-looking statements are statements that
estimate the happening of future events are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as "may", "shall", "will", "could", "expect", "estimate",
"anticipate", "predict", "probable", "possible", "should", "continue", or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.

The assumptions used for purposes of the forward-looking statements specified in
the following information represent estimates of future events and are subject
to uncertainty as to possible changes in economic, legislative, industry, and
other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and, accordingly, no opinion is expressed
on the achievability of those forward-looking statements. No assurance can be
given that any of the assumptions relating to the forward-looking statements
specified in the following information are accurate, and we assume no obligation
to update any such forward-looking statements.

Liquidity and Capital Resources. We have cash of $0.00 as of December 31, 2000.
Tomas Forss, our sole officer and director, has paid our expenses since our
formation, and we anticipate that Mr.Forss will continue to pay our expenses.

Results of Operations. We have not yet realized any revenue from operations, nor
do we expect to in the foreseeable future.

Plan of Operation for the Next Twelve Months. We will review and evaluate
business opportunities for possible mergers or acquisitions. We have not yet
entered into any agreement, nor do we have any commitment or understanding to
enter into or become engaged in a transaction.

A decision to participate in a specific business opportunity will be made based
upon our analysis of the quality of the prospective business opportunity's
management and personnel, assets, the anticipated acceptability of products or
marketing concepts, the merit of a business plan, and numerous other factors,
which are difficult, if not impossible, to analyze using any objective criteria.

Selection of a Business. We anticipate that potential business opportunities
will be referred from various sources, including our officer and director,
professional advisors, securities broker-dealers, venture capitalists, persons
involved in


                                       5
<PAGE>


the financial community, and others who may present unsolicited
proposals. We will not engage in any general solicitation or advertising for a
business opportunity and will rely on the personal relationships of our officer
and director and his affiliates, as well as indirect associations with other
business and professional people. Our reliance on "word of mouth" may limit the
number of potential business opportunities identified. While it is not presently
anticipated that we will engage unaffiliated professional firms specializing in
business acquisitions or reorganizations, such firms may be retained if we deems
it in our best interest. Finder's fees paid to professional acquisition firms
could involve one-time cash payments, payments based on a percentage of the
business opportunity's revenues or product sales volume, payments involving
issuance of securities, or any combination of these or other compensation
arrangements. Consequently, we are unable to predict the cost of utilizing such
services. As of March 30, 2001, there have been no discussions, agreements or
understandings with any professional advisors, financial consultants,
broker-dealers or venture capitalists. Our present intentions are to rely upon
our President to perform those services normally provided by professional
advisors or financial consultants.

We will not restrict our search to any particular business, industry, or
geographical location. We reserve the right to evaluate and enter into any type
of business in any location. In seeking a business venture, our decision will
not be controlled by an attempt to take advantage of any anticipated or
perceived appeal of a specific industry, management group, product, or industry,
but will be based on the business objective of seeking long-term capital
appreciation. We may participate in a newly organized business or in a more
established business. Participation in a new business entails greater risks, as
in many instances, management of such a business may not have an established
track record; the eventual market for such business' product or services will
likely not be established; and the profitability of such business will be
untested and impossible to forecast accurately. Should we participate in a more
established business that is experiencing financial difficulty, risks may result
from our inability to generate sufficient funds to manage or reverse the
circumstances causing such financial problems.

The analysis of new businesses will be undertaken by or under the supervision of
our sole officer and director. In analyzing prospective businesses, we will
consider, to the extent applicable, the available technical, financial and
managerial resources of any given business. We will also consider the following:

o        nature of present and expected competition;
o        potential advances in research and development or exploration;
o        the potential for growth and expansion;
o        the likelihood of sustaining a profit within given time periods;
o        the perceived public recognition or acceptance of products, services,
         trade or service marks;
o        name identification; and
o        other relevant factors.

We anticipate that the results of operations of a specific business may not
necessarily be indicative of the potential for future earnings for that
business, which may be impacted by a change in marketing strategies, expansion,
modifying product emphasis, changing or substantially augmenting management, and
other factors.

We have no present intention to hire any independent advisors or consultants.
Our officer will act in these capacities. We may pay a fee for locating a
merger, acquisition or business combination candidate. No criteria will be used
in determining who can act as a finder for us, other than we will require such
finder to have all the necessary state or federal licenses to act in such
capacity and receive compensation therefor. A finder will only be paid if we
complete a transaction. All other terms of service will be negotiated on an
individual basis and have not been determined as of yet. We have not yet
contacted nor had any discussions with any finders.

We will analyze all relevant factors and make a determination based on a
composite of available information, without reliance on any single factor. The
period within which we will decide to participate in a given business cannot be
predicted and will depend on the following factors:

o        the time involved in identifying businesses;
o        the time required for us to complete our analysis of such businesses;
o        the time required to prepare appropriate documentation to effect a
         merger or acquisition; and
o        other circumstances.


                                       6
<PAGE>


Acquisition of a Business. The implementing of a structure that will result in
any given business transaction, may cause us to become party to a merger,
consolidation, purchase and sale of assets, purchase or sale of stock, or other
reorganization involving another corporation, joint venture, partnership or
licensee. The exact structure of the anticipated transaction cannot yet be
determined, although we do not intend to participate in a business by the
acquisition of minority stock interests. Our current intention is to acquire a
controlling interest in a business. Upon the completion of a transaction, it is
likely that our present management will no longer control our affairs. Further,
our present director may, as part of the terms of a prospective business
transaction, resign and be replaced by new directors without a vote of our
shareholders.

It is the opinion of the Office of Small Business of the Securities and Exchange
Commission (as indicated in No Action Letter, NASD Regulation, Inc., dated
January 21, 2000) that Rule 144 is not available for resale transactions
involving securities sold by promoters and affiliates of a blank check company,
and their transferees, and anyone else who has been issued securities from a
blank check company, and that securities issued by a blank check company to
promoters and affiliates, and their transferees, can only be resold by
registration pursuant to the Securities Act of 1933. Upon consummation of a
merger, we may decide to file the necessary and appropriate registration
statements to register our common stock promoters and affiliates and their
transferees. In addition, the promoters or affiliates of blank check companies,
as well as their transferees, are deemed to be "underwriters" of the securities
of those blank check companies issued both before and after any business
combination.

The issuance of a substantial amount of additional securities and their
potential sale into any trading market which may develop in our securities may
have a depressive effect on such market.

While the actual terms of a transaction to which we may be a party cannot be
determined at this time, it is expected that the parties to any business
transaction will determine that it is desirable to structure the merger or
acquisition as a "tax-free" event pursuant to Sections 351 or 368(a) of the
Internal Revenue Code of 1986. In order to obtain tax-free treatment under
Section 351 of the Internal Revenue Code of 1986, it would be necessary for the
owners of the acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, our shareholders would retain less than 20% of
the issued and outstanding shares of the surviving entity. Section 368(a)(1) of
the Internal Revenue Code of 1986 provides for tax-free treatment of certain
business reorganizations between corporate entities where one corporation is
merged with or acquires the securities or assets of another corporation.
Generally, we expect to be the acquiring corporation in such a business
reorganization, and the tax-free status of the transaction will not depend on
the issuance of any specific amount of our voting securities pursuant to that
Section 368. The acquiring corporation will issue securities in such an amount
that the shareholders of the acquired corporation will hold 50% or more of the
voting stock of the surviving entity. Consequently, there is a substantial
possibility that our shareholders immediately prior to the transaction would
retain less than 50% of the issued and outstanding shares of the surviving
entity. Therefore, regardless of the form of the business acquisition, it may be
anticipated that our stockholders immediately prior to the transaction will
experience a significant reduction in their percentage of ownership in us.

Notwithstanding the fact that we are technically the merging or acquiring entity
in the foregoing circumstances, generally accepted accounting principles will
ordinarily require that such transaction be accounted for as if we had been
acquired by the other entity owning the business and, therefore, will not permit
an increase in the carrying value of the assets of the other business.

The manner in which we participate in a business will depend on the nature of
the business, our respective needs and desires, the management of the business,
and our relative negotiating strength and such other management.

We will participate in a business only after the negotiation and execution of
appropriate written agreements. Although the terms of such agreements cannot be
determined at this time, generally, such agreements will require specific
representations and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to such closing, will
outline the manner of paying costs if the transaction is not closed, will set
forth remedies on default, and will include miscellaneous other terms.

Operation of Business After Acquisition. Our operation following our merger or
acquisition of a business will be dependent on the nature of the business and
the interest acquired. We are unable to determine at this time whether we will

                                       7
<PAGE>


be in control of the business or whether our present management will be in
control of us following the acquisition. It may be expected that the business
will present various risks, which cannot be predicted at the present time.


Item 7.  Financial Statements




                                  SPRUCE CORP.
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS
                               December 31, 2000








                                    CONTENTS


                                                                           PAGE

INDEPENDENT AUDITORS' REPORT                                                  9

BALANCE SHEET                                                                10

STATEMENT OF OPERATIONS                                                      11

STATEMENT OF STOCKHOLDER'S EQUITY                                            12

STATEMENT OF CASH FLOWS                                                      13

NOTES TO FINANCIAL STATEMENTS                                             14-16






                                       8
<PAGE>












                          INDEPENDENT AUDITORS' REPORT




TO THE BOARD OF DIRECTORS OF SPRUCE CORP.:

We have audited the accompanying balance sheet of Spruce Corp. (A Development
Stage Company) as of December 31, 2000 and the related statements of operations,
stockholder's equity and cash flows for the period from September 8, 2000
(inception) to December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spruce Corp. as of December 31,
2000 and the results of its operations and its cash flows for the period from
September 8, 2000 (inception) to December 31, 2000 in conformity with generally
accepted accounting principles.




                                         MERDINGER, FRUCHTER ROSEN & CORSO, P.C.
                                         Certified Public Accountants

New York, New York
March 15, 2001



                                       9
<PAGE>




                                  SPRUCE CORP.
                          (A Development Stage Company)
                                  BALANCE SHEET
                                DECEMBER 31, 2000





ASSETS                                                                $       -
                                                                     ===========


LIABLILITIES AND STOCKHOLDERS'S EQUITY
     Liabilities                                                      $       -
                                                                     -----------

STOCKHOLDER'S EQUITY
Preferred stock, $0.01 par value;
   10,000,000 shares authorized,
    No shares issued and outstanding                                          -
Common Stock, $0.001 par value;
    50,000,000 shares authorized,
    5,000,000 shares issued and outstanding                               5,000

Additional paid-in capital                                                  500

Deficit accumulated during
   the development stage                                                 (5,500)
                                                                     -----------
   Total stockholder's equity                                                 -

       Total liabilities and stockholder's equity                    $        -
                                                                    ============












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


                                       10
<PAGE>



                                  SPRUCE CORP.
                          (A Development Stage Company)
                             STATEMENT OF OPERATIONS
                      FOR THE PERIOD FROM SEPTEMBER 8, 2000
                        (INCEPTION) TO DECEMBER 31, 2000







Revenue ..............................................                 $      -

General and administrative expenses ..................                    5,500
                                                                      ----------

Loss from operations before provision for income taxes                   (5,500)

Provision for income taxes ...........................                        -


Net loss .............................................                 $ (5,500)
                                                                      ==========

Net loss per share - basic and diluted ...............                 $      -
                                                                      ==========

Weighted average number of common shares
 outstanding .........................................                5,000,000
                                                                      ==========



















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


                                       11
<PAGE>




                                  SPRUCE CORP.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDER'S EQUITY
               SEPTEMBER 8, 2000 (INCEPTION) TO DECEMBER 31, 2000

<TABLE>
<CAPTION>

                                                                                                          Deficit
                                                                                                         Accumulated
                                                                                          Additional     During the
                                                                  Common Stock              Paid-in     Development
                                                              Shares         Amount         Capital        Stage          Total
                                                          -------------- --------------  ------------- --------------- ------------
<S>                                                           <C>             <C>             <C>            <C>            <C>
Balance, September 8, 2000                                            -       $      -        $     -        $      -       $    -


Issuance of shares for services - September 9, 2000           5,000,000          5,000                                       5,000


Expenses paid by shareholder                                          -              -           500                -          500


Net loss                                                              -              -              -          (5,500)      (5,500)
                                                          -------------- --------------  ------------- --------------- ------------

Balance, December 31, 2000                                    5,000,000      $   5,000       $    500      $   (5,500 )    $     -
                                                          ============== ==============  ============= =============== ============

</TABLE>
























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


                                       12
<PAGE>



                                  SPRUCE CORP.
                          (A Development Stage Company)
                             STATEMENT OF CASH FLOWS
               SEPTEMBER 8, 2000 (INCEPTION) TO DECEMBER 31, 2000






     CASH FLOWS FROM OPERATING ACTIVITIES
          Net loss                                               $       (5,500)
          Stock issued for services                                       5,000
          Expenses paid by shareholder                                      500
                                                                ---------------
     NET CASH USED IN OPERATING ACTIVITIES                                    -


     CASH AND CASH EQUIVALENTS - September 8, 2000                            -
                                                                ---------------

     CASH AND CASH EQUIVALENTS -December 31, 2000
     Net loss per share - basic and diluted                      $            -
                                                                ===============


     SUPPLEMENTAL INFORMATION:
        During the initial period September 8 to December 31, 2000, the Company
        paid no cash for interest or income taxes.



















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


                                       13
<PAGE>



                                  SPRUCE CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000



NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
--------------------
Spruce Corp. (the "Company") is currently a  development-stage company under the
provisions of the Financial  Accounting  Standards  Board ("FASB")  Statement of
Financial  Accounting  Standards  ("SFAS")  NO. 7. The Company was  incorporated
under the laws of the state of Nevada on September 8, 2000.

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 revenue and expenses during the reporting period. Actual
results could differ from those estimates.

Cash and Cash Equivalents
-------------------------
The Company  considers all highly  liquid  investments  purchased  with original
maturities of three months or less to be cash equivalents.

Income Taxes
------------
Income  taxes are  provided  for  based on the  liability  method of  accounting
pursuant to SFAS No. 109, "Accounting for Income Taxes".  Deferred income taxes,
if any,  are  recorded  to  reflect  the tax  consequences  on  future  years of
differences  between the tax bases of assets and liabilities and their financial
reporting amounts at each year-end.

Earnings Per Share
------------------
The  Company  calculates  earnings  per share in  accordance  with SFAS No. 128,
"Earnings Per Share",  which requires  presentation  of basic earnings per share
("BEPS") and diluted  earnings per share  ("DEPS").  The  computation of BEPS is
computed by dividing  income  available to common  stockholders  by the weighted
average number of outstanding common shares during the period. DEPS gives effect
to all dilutive  potential  common  shares  outstanding  during the period.  The
computation of DEPS does not assume conversion,  exercise or contingent exercise
of securities that would have an antidilutive effect on earnings. As of December
31, 2000, the Company has no securities that would effect loss per share if they
were to be dilutive.

Comprehensive Income
--------------------
SFAS No. 130, "Reporting  Comprehensive  Income",  establishes standards for the
reporting  and  display  of  comprehensive  income  and  its  components  in the
financial statements. The Company had no items of other comprehensive income and
therefore has not presented a statement of comprehensive income.




                                       14
<PAGE>



                                  SPRUCE CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000



NOTE 2 -          INCOME TAXES

                    The components of the provision for income taxes for the
                    period from September 8, 2000 (inception) to December 31,
                    2000 are as follows:

                     Current Tax Expense
                         U.S. Federal                             $           -
                         State and Local                                      -
                                                                  --------------
                     Total Current                                            -
                                                                  --------------

                     Deferred Tax Expense
                         U.S. Federal                                         -
                         State and Local                                      -
                                                                  --------------
                     Total Deferred                                           -
                                                                  --------------

                     Total Tax Provision (Benefit) from
                      Continuing Operations                       $           -
                                                                  ==============

                    The reconciliation of the effective income tax rate to the
                    Federal statutory rate is as follows:

                    Federal Income Tax Rate                               34.0%
                    Effect of Valuation Allowance                    (   34.0)%
                                                                      ---------
                    Effective Income Tax Rate                              0.0%
                                                                    ===========

                    At December 31, 2000, the Company had net carryforward
                    losses of $5,500. Because of the current uncertainty of
                    realizing the benefits of the tax carryforward, a valuation
                    allowance equal to the tax benefits for deferred taxes has
                    been established. The full realization of the tax benefit
                    associated with the carryforward depends predominantly upon
                    the Company's ability to generate taxable income during the
                    carryforward period.

                    Deferred tax assets and liabilities reflect the net tax
                    effect of temporary differences between the carrying amount
                    of assets and liabilities for financial reporting purposes
                    and amounts used for income tax purposes. Significant
                    components of the Company's deferred tax assets and
                    liabilities as of December 31, 2000 are as follows:

                    Deferred Tax Assets
                     Loss Carryforwards                              $    1,900

                     Less:  Valuation Allowance                          (1,900)
                                                                     -----------
                     Net Deferred Tax Assets                         $         -
                                                                     ===========

                    Net operating loss carryforwards expire in 2020.



                                       15
<PAGE>



                                  SPRUCE CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000



NOTE 3 -            COMMON STOCK

                    On September 9, 2000, the Company issued 5,000,000 shares of
common stock for services valued at $5,000.

































                                       16
<PAGE>








Item 8.  Changes in and Disagreements with Accountants.

There have been no changes in or disagreements with our accountants since our
formation required to be disclosed pursuant to Item 304 of Regulation S-B.

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons.

Our sole director and principal executive officer is specified on the following
table:


        Name                     Age                       Position
----------------------        ---------         --------------------------------
Tomas Forss                      57             President, Secretary,
                                                Treasurer and sole Director

Tomas Forss.  Mr.Forss is our President, Secretary, Treasurer, and sole
director.  From 1995 to the present, Mr.Forss has been an independent commerical
piolet.

Other than Mr.Forss, there are no significant employees expected by us to
make a significant contribution to our business. Our director will serve until
the next annual meeting of stockholders. Our executive officers are appointed by
our Board of Directors and serve at the discretion of the Board of Directors.

There are no orders, judgments, or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining Mr.Forss from engaging in or continuing any conduct, practice or
employment in connection with the purchase or sale of securities, or convicting
him of any felony or misdemeanor involving a security, or any aspect of the
securities business or of theft or of any felony.

Section 16(a) Beneficial Ownership Reporting Compliance. We do not presently
have knowledge as to whether our officer, director, and principal shareholder
has filed all reports required to be filed on, respectively, a Form 3 (Initial
Statement of Beneficial Ownership of Securities), a Form 4 (Statement of Changes
of Beneficial Ownership of Securities), or a Form 5 (Annual Statement of
Beneficial Ownership of Securities).

Item 10.  Executive Compensation

Executive Compensation. Our sole officer and director does not receive any
compensation for his services rendered to us, has not received such compensation
in the past, and is not accruing any compensation pursuant to any agreement with
us. We do not have any plans for our officers or directors to be paid any
compensation in the immediate future. However, our sole officer and director
anticipates receiving benefits as sole shareholder.

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

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 30, 2001, by each person or entity
known by us to be the beneficial owner of more than 5% of the outstanding shares
of common stock, each of our directors and named executive officers, and all of
our directors and executive officers as a group.




                                       17
<PAGE>


<TABLE>
<CAPTION>
                                                                          Amount and Nature of
Title of Class                 Name of Beneficial Owner                     Beneficial Owner                 Percent of Class
--------------                 ------------------------                   ---------------------              ----------------
<S>                            <C>                                         <C>                                     <C>
Common Stock                   Tomas Forss                                 5,000,000 shares                        100%
                               23 Corporate Plaza, Suite 180               President, Secretary, Treasurer
                               Newport Beach, California 92663             and a Director

Common Stock                   All Officer and Directors                   5,000,000 shares                        100%
                               as a Group

</TABLE>

Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect to
securities. In accordance with Commission rules, shares of our common stock
which may be acquired upon exercise of stock options or warrants which are
currently exercisable or which become exercisable within 60 days of the date of
the table are deemed beneficially owned by the optionees. Subject to community
property laws, where applicable, the persons or entities named in the table
above have sole voting and investment power with respect to all shares of our
common stock indicated as beneficially owned by them.

Changes in Control. Our management is not aware of any arrangements which may
result in "changes in control" as that term is defined by the provisions of Item
403(c) of Regulation S-B.


Item 12.  Certain Relationships and Related Transactions.

Transactions with Promoters. We issued 5,000,000 shares of our common stock to
Tomas Forss, our sole officer and director, in exchange for services related
to our incorporation.

Related Party Transactions. There have been no related party transactions which
would be required to be disclosed pursuant to Item 404 of Regulation S-B, except
for the following:

We issued 5,000,000 shares of our common stock to Tomas Forss, our sole
officer and director, in exchange for services valued at $5,000.

Our offices are provided to us at no charge by Tomas Forss, our sole officer
and  director. Mr.Forss has agreed to continue this arrangement until we
complete a business combination.


Item 13.  Exhibits and Reports on Form 8-K

Copies of the following documents are filed with this Registration Statement,
Form 10-KSB as exhibits:

3.1               Articles of Incorporation
                  (Charter document)*

3.2               Bylaws
                  (Charter document)*


* Previously filed as exhibits to Registration Statement on Form 10-SB filed on
October 20, 2000.



                                       18
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned in the City of Newport Beach, on March 31, 2001.

                                             Spruce Corp.,
                                             a Nevada corporation


                                             By:      /s/ Tomas Forss
                                                      --------------------------
                                                      Tomas Forss
                                             Its:     President, Director

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

Spruce Corp.

By:      /s/ Tomas Forss
         ---------------------------
         Tomas Forss
Its:     President, Director