**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 10-KSB/A**

**Annual Report Pursuant to Section 13 or 15(d) of**

**the Securities Exchange Act of 1934**

(Mark One)

[ X ] 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 under section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ___________________ to ______________

Commission File Number 0-32195

**New Horizon Education, Inc.**

(Name of small business issuer in its charter)

|Utah 

(State or other jurisdiction of incorporation or organization) | 87-0319410 

(I.R.S. Employer I.D. No.)
|--------------------------------------------------------------------- | ---------------------------------------

**2250 W. Center Street, Springville,  UT  84663**

(Address and Zip Code of principal executive offices)

Issuer's telephone number, including area code: **801-489-0222**

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

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

No par value, common voting shares

(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 report(s), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [  ]   No [ x  ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and no
disclosure will be contained, to the best of the 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 revenue for its most recent fiscal year was: $-0-

The aggregate market value of the issuer's voting stock held as of July 9, 2001, by non-affiliates of the issuers was $41,306.

As of August 3, 2001, issuer had 3,656,863 shares of its no par value common stock outstanding.

Transitional Small Business Format:   Yes [   ]   No [ X ]

Documents incorporated by reference: none

**PART I**

**Item 1.  Description of Business.**

The Company originally incorporated in the State of Utah on May 9, 1972, under the name High-Line Investment &
Development Company.  In 1977, the Company changed its name to Gayle Industries, Inc.  In 1978 the Company merged into
its subsidiary Swing Bike and kept the Swing Bike name.  In 1979 the Company changed its name to Horizon Energy Corp.  In
1992 the Company changed its name to Millennium Entertainment Corp.  And in 1993 the Company changed its name to New
Horizon Education, Inc.  Later that year, the Company formed a new subsidiary, Sunset Horizon, Inc. for the purpose of
merging with Ruff Network Marketing, Inc., and began marketing computer education programs.  Sunset Horizon, Inc. owned
rights to market the computer education programs and Ruff Network Marketing, Inc. provided the marketing network.  The
Company was not successful in its marketing operations and in 1995 the Company sold its assets and ceased operations leaving
both the parent Company and its subsidiary with no operations.  In 1997, the Company sold the subsidiary.  The Company has
not had active business operations since 1995, and is considered to have re-entered the development stage as of January 1, 1998.

In June of 2000, the shareholders authorized a fifty (50) to one (1) reverse split in an attempt to attract business opportunities
and to potentially develop a greater liquidity for the shares of the Company.  Holders of fractional shares were paid a fair market
value by the Company with a check sent to the shareholder's last known address.  Returned checks are being held by Company's
counsel in an escrow account pursuant to Utah law.

Because we are a development stage company with a plan to engage in a merger or acquisition with an unidentified company or
companies, we are considered a blank check company.  Management has determined that because it has not had any operations
for the past five years and it does not currently have any business to pursue, that it would be advisable to seek an opportunity
that might generate value for shareholders.

The Company intends to seek, investigate, and if warranted, acquire an interest in a business opportunity.  The Company does
not intend to conduct any other operations while it is investigating potential business opportunities.  The Company does not
propose to restrict its search for a business opportunity to any particular industry or geographical area and may, therefore,
engage in essentially any business in any industry.  The Company has unrestricted discretion in seeking and participating in a
business opportunity, subject to the availability of such opportunities, economic conditions and other factors.  The Company
does not currently have any potential business opportunity in mind nor has it entered any discussions or negotiations with any
potential business.

The selection of a business opportunity in which to participate is complex and extremely risky and will be made by
management in the exercise of its business judgment.  There is no assurance that the Company will be able to identify and
acquire any business opportunity which will ultimately prove to be beneficial to the Company and its shareholders.

The activities of the Company are subject to several significant risks which arise primarily as a result of the fact that the
Company has no specific business and may acquire or participate in a business opportunity based on the decision of
management which will,  because management holds a majority of the outstanding stock,  be able to approve transactions that
require shareholder approval without seeking the approval of the rest of the stockholders.

**Sources of Opportunities**

It is anticipated that business opportunities may be available to the Company from various sources, including its officers and
directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others
who may present unsolicited proposals.

The Company's President, Mr. White, has extensive business experience and as a result, has developed a strong network with
other business professionals.  The Company believes that Mr. White's contacts may provide business opportunities that may be
attractive to the Company. In addition, the Company's Secretary, Mrs. Angela White and the Company's director, Ms. Loretta
Hullinger have established extensive business contacts through their prior and present business experience and may introduce
opportunities to the Company.

The Company will seek a potential business opportunity from all known sources, but will rely principally on personal contacts
of its officers and directors as well as indirect associations between them and other business and professional people.  Although
the Company does not anticipate engaging professional firms specializing in business acquisitions or reorganizations, if
management deems it in the best interests of the Company, such firms may be retained.  In some instances, the Company may
publish notices or advertisements seeking a potential business opportunity in financial or trade publications.

The Company has no current intention to acquire or merge with a business opportunity in which promoters, management or
their affiliates or associates directly or indirectly have any ownership interest. The Company does not have any specific policy
against such a transaction.  Should the Company enter into a transaction that directly or indirectly benefits any promoter,
management or their affiliates, the matter will be submitted to a vote of non-interested shareholders pursuant to the Company's
by-laws and Utah corporate law.

**Criteria**

The Company will not restrict its search to any particular business, industry or geographical location.  The Company may
acquire a business opportunity or enter into a business agreement in any industry and in any stage of development.  The
Company may enter into a business or opportunity involving a Astart up@ or new company.  The Company may acquire a
business opportunity in various stages of its operation.

In seeking a business venture, the decision of management of the Company will not be controlled by an attempt to take
advantage of an anticipated or perceived appeal of a specific industry, management group, or product or industry, but will be
based upon the business objective of seeking long-term capital appreciation of the Company.

In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; the history of operations, if any; prospects for the
future; the nature of present and expected competition; the quality and experience of management services which may be
available and the depth of the management; the potential for further research, development or exploration; the potential for
growth and expansion; the potential for profit; the perceived public recognition or acceptance of products, services, trade or
service marks, name identification; and other relevant factors.

Generally, the Company will analyze all available factors in the circumstances and make a determination based upon a
composite of available facts, without reliance upon any single factor as controlling.

**Methods of Participation of Acquisition**

Specific business opportunities will be reviewed and, on the basis of that review, the legal structure or method of participation
deemed by management to be suitable will be selected.  Such structures and methods may include, but are not limited to, leases,
purchase and sale agreements, licenses, joint ventures, other contractual arrangements, and may involve a reorganization, merger
or consolidation transaction.  The Company may act directly or indirectly through an interest in a partnership, corporation, or
other form of organization.

**Procedures**

As part of the Company=s investigation of business opportunities, officers and directors may meet personally with management
and key personnel of the firm sponsoring the business opportunity, visit and inspect material facilities, obtain independent
analysis or verification of certain information provided, check references of management and key personnel, and conduct other
reasonable measures.

The Company will generally request that it be provided with written materials regarding the business opportunity containing
such items as a description of product, service and company history; management resumes; financial information; available
projections with related assumptions upon which they are based; an explanation of proprietary products and services; evidence
of existing patents, trademarks or service marks or rights thereto; present and proposed forms of compensation to management;
a description of transactions between the prospective entity and its affiliates; relevant analysis of risks and competitive
conditions; a financial plan of operation and estimated capital requirements; and other information deemed relevant.

**Competition**

The Company expects to encounter substantial competition in its efforts to acquire a business opportunity.  The primary
competition is from other companies organized and funded for similar purposes, small venture capital partnerships and
corporations, small business investment companies and wealthy individuals.

**Employees**

The Company has no full time employees.  The Company's president has agreed to allocate a portion of his time to the activities
of the Company.  The president anticipates that the business plan of the Company can be implemented by him devoting
approximately 100 hours per month to the business affairs of the Company and, consequently, conflicts of interest may arise
with respect to the limited time commitment by such officer.

**Item 2.  Description of Property.**

The Company does not currently own any property.  The Company rents office space on a month to month basis for $100 per
month, located at 2250 West Center Street, Springville, UT 84663.  This arrangement is expected to continue until such time as
the Company becomes involved in a business opportunity that necessitates expansion or relocation.

**Item 3.  Legal Proceedings.**

No legal proceedings are pending against the Company or any of its officers or directors.  There is a potential for litigation in
relation to the Company's wholly owned subsidiary that was sold in 1997. The agreement required the Company to pay $5,500
in payroll taxes in exchange for approximately $180,000 in debt relief.  If the sold subsidiary does not pay off its debt, the
Company may be named as a co-defendant with the sold subsidiary.  Management believes that all corporate formalities
regarding wholly owned subsidiaries were strictly followed. Further, the Company does not believe it is liable for any of the
sold subsidiary's liabilities, and does not anticipate any claims being made against it.

Furthermore, none of the Company's officers or directors or affiliates of the Company are parties against the Company or have
any material interests in actions that are adverse to the Company's interests.

**Item 4.  Submission of Matters to a Vote of Securities Holders.**

The Company called a special meeting of shareholders which was held on December 26, 2000 to vote on the following items:

1. Election of Directors

Steven L. White

Angela G. White

Loretta Jean Hullinger

2. Approval to Amend and Restate the Articles of Incorporation

3. Ratification of any and all past actions taken by the Board of Directors on behalf of the Company

As of the record date, 2,906,863 shares were issued, outstanding and entitled to vote at the special meeting.  2,547,509 shares
were present at the special meeting in person or by proxy.  All 2,547,509 shares voted unanimously to elect the directors,
approve the Amended and Restated Articles of Incorporation and to ratify any and all past actions of the Board of Directors.

**PART II**

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

The Company's common stock is listed on the Pink Sheets under the symbol "NHZN".  At August 3, 2001 the Company had
561 shareholders holding 3,656,863 shares of common stock.  The following table shows the highs and lows of the closing bid
and ask on the Company's stock for fiscal years 1998, 1999, 2000 and the first two quarters of 2001.

|**YEAR** | CLOSING BID | CLOSING ASK
|-------- | ----------- | -----------

|1998           | HIGH | LOW  | HIGH | LOW
|-------------- | ---- | ---- | ---- | ---
|First Quarter  | .001 | .001 | .10  | .10
|Second Quarter | .001 | .001 | .10  | .10
|Third Quarter  | .001 | .001 | .10  | .10
|Fourth Quarter | .001 | .001 | .10  | .04

|**1999**                    |     |      |        |      
|--------------------------- | --- | ---- | ------ | -----
|First Quarter               | .04 | .001 | .53125 | .04  
|Second Quarter              | .02 | .01  | .10    | .03  
|Third Quarter               | .03 | .01  | .08    | .02  
|Fourth Quarter              | .02 | .01  | .09    | .03  
|**2000**                    |     |      |        |      
|First Quarter               | .02 | .02  | .25    | .04  
|Second Quarter              | .01 | .01  | .25    | .03  
|July 3 to July 28           | .01 | .005 | .03    | .01  
|July 31 to September 30
(1) | .03 | .03  | 1      | .25  
|Fourth Quarter              | .03 | .03  | 1      | .50  
|**2001**                    |     |      |        |      
|First Quarter               | .03 | .03  | 1      | .9375
|Second Quarter              | .03 | .03  | 1      | .93  

(1) July 31, 2000 to September 25, 2000 represents the listing price of the Company's stock after a fifty (50) for one (1) reverse
stock split.

The above quotations, as provided by the National Quotation Bureau, LLC, represent prices between dealers and do not include
retail markup, markdown or commission.  In addition, these quotations do not represent actual transactions.

The Company has not paid, nor declared, any dividends since its inception and does not intend to declare any such dividends in
the foreseeable future.  The Company's ability to pay dividends is subject to limitations imposed by Utah law.  Under Section
16-10a-640 of the Utah Revised Business Corporation Act, dividends maybe paid to the extent that the corporation's assets
exceed its liabilities and it is able to pay its debts as they become due in the usual course of business and does not affect
preferential shareholders rights upon dissolution.

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

Results of Operations for the period ending December 31, 2000 and 1999

At March 31, 2001, the Company had $1,989 in cash.  The Company believes that it has sufficient cash on hand to satisfy its
administrative needs for the next twelve months.  Should the Company obtain a business opportunity, it may be necessary to
raise additional capital.  This may be accomplished by selling common stock of the Company, taking loans from the officers or
seeking other forms of debt financing.

The Company was previously in the business of marketing computer related educational systems. It ceased operations in 1995
and has generated no revenue from operations for the past two fiscal years.  Currently, the Company has no ongoing operations,
and has no material commitments for capital expenditures for the next twelve months.

Management of the Company intends to actively seek business opportunities for the Company during the next twelve months.

The Company did not generate any revenue for the periods ending December 31, 2000 and 1999. General and administrative
expenses were $101,058 for the period ending December 31, 2000 and $29,120 for the period ending December 31, 1999.  The
increase in expenses is due to the Company bringing itself current in its corporate status, audit fees and legal expenses involved
in filing the Company's Form 10-SB registration statement.

The Company also experienced a loss on the sale of securities in the amount of $57,441 for the period ended December 31,
2000 and in the amount of $80,000 for the period ending December 31, 1999.

Expenses and loss on the sale of securities resulted in the Company having a net loss of $158,499 for the period ended
December 31, 2000 compared to a net loss of $109,120 for the period ended December 31, 1999 and a cumulative net loss of
$279,647 from the re-entering of Development Stage on January 1,1998 through December 31, 2000.

Net cash used in operations was $85,387 for the period ended December 31, 2000 compared to $25,552 for the period ended
December 31, 1999.  Net cash provided by investing activities was $38,314 during the year ended December 31, 2000 and
$20,000 for the year ended December 31, 1999.  Net cash provided by financing activities was $48,859 for the year ended
December 31, 2000 compared to $11,578 for the year ended December 31, 1999.

The Company had $7,909 in cash as of December 31, 2000 as compared to $6,123 as of December 31, 1999.

**Item 7.  Financial Statements.**

The financial statements of the Company appear at the end of this report beginning with the Index to Financial Statements on
page 11.

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

None.

**PART III**

**Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange
Act.**

The following table sets forth as of July 9, 2001, the name, age, and position of each executive officer and director and the term
of office for each director of the Company.

|**Name**               | **Age** | **Position**                      | **Since**    
|---------------------- | ------- | --------------------------------- | -------------
|Steven L. White        | 46      | President, Treasurer and
Director | July 1998    
|Angela G. White        | 44      | Secretary and Director            | July 1998    
|Loretta Jean Hullinger | 53      | Director                          | December 2000

All officers hold their positions at the will of the Board of Directors.  All directors hold their positions for one year or until their
successors are duly elected and qualified.

The following is a brief biography of the officers and directors.

**Steven L. White, President, Treasurer and Director.**Mr. White earned his Bachelor of Science Degree from Brigham
Young University in 1980 with a major in Accounting and a Minor in English.  He is a member of the American Institute of
Certified Public Accountants and has been employed by one national and two local CPA firms.  Since 1983, Mr. White has been
employed in private accounting and has been the controller of several small businesses which include Phoenix Ink, LLC, a
financial newsletter publisher, from 1999 to present; HomeQuest, Inc., an educational software marketing company, from 1993
to 1998; InfoLink Technologies, Inc., a software development company, from 1991 to 1992; Jefferson Institute, Inc., an
investment seminar company, from 1986 to 1990; and Video Ventures, Inc., a publicly held video rental company, from 1983 to
1985.

**Angela G. White, Secretary and Director.**  Mrs. White's primary and full time occupation for the last five years has been that
of a full time homemaker.  Mrs. White is married to the other officer and director of the Company, Steven L. White.  In
addition, to her full time occupation as a homemaker, Mrs. White is a licensed practical nurse and has been employed with
Intermountain Health Care at its Utah Valley Regional Medical Center since 1996.

**Loretta Jean Hullinger, Director.**Ms. Hullinger has been the operations manager for a horse ranch, the Wagon Wheel
Ranch, for the past five years where she directs and oversees the training, feeding, breeding and raising of racehorses.  Ms.
Hullinger schedules the employees and directs their daily duties at the horse ranch.  Ms. Hullinger has been involved in this line
of business for the majority of her working career.

**Compliance with Section 16(a) of the Exchange Act**

Based  solely upon a review of Forms 3, 4 and 5 furnished  to the  Company,  the Company is not aware of any person who at
any time  during the fiscal year ended December 31, 2000 was a director, officer, or beneficial owner of more than ten percent of
the Common Stock of the Company,  and who failed to file, on a timely basis, reports required by Section 16(a) of the Securities
Exchange Act of 1934 during such fiscal year.

**Item 10.  Executive Compensation**

The Company has no formal arrangements for the remuneration of its officers and directors, except that they will receive
reimbursement for actual, demonstrable out-of-pocket expenses, including travel expenses, if any, made on the Company's
behalf in the investigation of business opportunities.

Although there is no formal arrangement, the Company paid Steven L. White an annual salary of $4,800, $23,000 and $55,775
for the fiscal years ended December 31, 1998,  1999 and 2000 respectively, for services rendered on behalf of the Company as
President.  Mr. White also received 30,000 shares of common stock valued at $1,500 for services during 1998.  Mr. White's
compensation is for management services to the Company and is an amount below current market rates paid for executives in
similar situations and was set as a fixed annual compensation amount by the board of directors.  Mr. White has received no other
compensation in the form of bonuses, options, warrants, stocks, awards or any other conceivable form of annual or long-term
compensation.

**Employment Contracts, Termination of Employment and Change in Control**

There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any
person which would in any way result in payments to any person because of employment with the Company or its subsidiaries,
or any change in control of the Company, or a change in the person's responsibilities following a change in control of the
Company.

Directors of the Company receive an annual payment of $500 each for their service as a board member.

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

The following table sets forth as of July 9, 2001, the name and the number of shares of the Registrant's Common Stock, no par
value, held of record or was known by the Registrant to own beneficially more than 5% of the 10,406,863 issued and
outstanding shares of the Registrant's Common Stock, and the name and shareholdings of each officer and director individually
and of all officers and directors as a group.

|Title of Class | Name and Address of

Beneficial Owner (1)                             | Amount and Nature
ofBeneficial Ownership | Percentage

of Class
|-------------- | --------------------------------------------------------------------- | ---------------------------------------- | --------------------
|Common         | Angela G. White(2)(3) 2250
W. Center Street, Springville,
UT  84663   | 1,530,000                                | 41.83%              
|Common         | Steven L. White(2)(3) 

2250 W. Center Street,
Springville, UT  84663 | 1,530,000                                | 41.83%              
|Common         | Loretta Jean Hullinger(3)

178 S. 350 W.

Mona,  UT  84645            | 750,000                                  | 20.50%              
|Common         | Officers, Directors and
Nominees as a Group: 

3 persons              | 2,280,000                                | 62.34%              

(1) For purposes of this table, a beneficial owner is one who, directly or indirectly, has or shares with others (a) the power to
vote or direct the voting of the Voting Stock (b) investment power with respect to the Voting Stock which includes the power to
dispose or direct the disposition of the Voting Stock.

(2) Steven L. White and Angela G. White are husband and wife.  The shares are held individually in the name of Steven L.
White, however because of the spousal relationship, Angela G. White is also considered to have beneficial ownership of the
shares.

(3) Officer and/or director of the Company.

There are no contracts or other arrangements that could result in a change of control of the Company.

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

In 1999, the Company had advanced $1,770 for payroll taxes that were paid on behalf of Steven L. White, an officer and a
director of the Company.  In December 2000, Mr. White repaid the advance with no interest.

**Item 13.  Exhibits and Reports on Form 8-K.**

**Reports on Form 8-K**

No reports on Form 8-K have been filed during the period covered by this Form 10-KSB.

**Exhibits**

|Exhibit Number | SEC Ref. No. | Title of Document                                                                                                                                                    | Location
|-------------- | ------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|1              | 3(i)         | Articles of Incorporation filed
March 9, 1972.                                                                                                                       | *       
|2              | 3(i)         | Amendment to Articles of
Incorporation of the Company
to change the name to Gayle
Industries, Inc. dated May 18,
1977.                                               | *       
|3              | 2            | Plan and Articles of Merger of
a Subsidiary Corporation
(Swing Bike) into the
Company thereby changing the
name of the Company to
Swing Bike dated January 11,
1978. | *       
|4              | 3(i)         | Amendment to Articles of
Incorporation of the Company
changing the name to Horizon
Energy Corporation dated
December 19, 1979.                                       | *       
|5              | 3(i)         | Amendment to Articled of
Incorporation of the Company
authorizing 100,000,000 shares
of common no par value stock
dated August 18, 1989.                             | *       
|6              | 3(i)         | Amendment to Articles of
Incorporation of the Company
changing the name to
Millennium Entertainment
Corp. dated December 10,
1992.                                   | *       
|7              | 3(i)         | Amendment to Articles of
Incorporation of the Company
changing the name to New
Horizon Education, Inc. dated
May 28, 1993.                                           | *       
|8              | 3(i)         | Amendment to Articles of
Incorporation of the Company
authorizing a one (1) for fifty
(50) reverse stock split dated
September 27, 2000.                             | *       
|9              | 3(i)         | Amended and Restated
Articles of Incorporation dated
December 26, 2000.                                                                                              | *       
|10             | 3(ii)        | By-Laws                                                                                                                                                              | **      
|11             | 6            | Share Sell Agreement                                                                                                                                                 | ***     

* Incorporated by reference to the Form 10-SB filed on December 29, 2000

**Incorporated by reference to the Form 10-SB/A filed on April 27, 2001

***Incorporated by reference to the Form 10-SB/A filed on September 5, 2001

**SIGNATURES**

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

New Horizon Education, Inc.

Date: September 5, 2001                           By: /s/ Steven L. White

Steven L. White, President and Treasurer

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.

Date: September 5, 2001                           By: /s/ Steven L. White

Steven L. White, Director

Date: September 5, 2001                           By: /s/ Angela G. White

Angela G. White, Director

Date:  September 5, 2001                         By: /s/ Loretta Jean Hullinger

Loretta Jean Hullinger, Director



**NEW HORIZON EDUCATION, INC.**

[A Development Stage Company]

**CONTENTS**

| |                                                                                                                                                                                      |  | PAGE
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
| | Independent Auditors' Report                                                                                                                                                         |  | 13  
| | Balance Sheet, December 31,
2000                                                                                                                                                     |  | 14  
| | Statements of Operations, for
the years ended December 31,
2000 and 1999 and from the
re-entering of development
stage on January 1, 1998
through December 31, 2000                  |  | 15  
| | Statements of Comprehensive
Income (Loss), for the years
ended December 31, 2000 and
1999 and from the re-entering
of development stage on
January 1, 1998 through
December 31, 2000 |  | 16  
| | Statement of Stockholders'
Equity (Deficit), from the
re-entering of the development
stage on January 1, 1998
through December 31, 2000                                              |  | 17  
| | Statements of Cash Flows, for
the years ended December 31,
2000 and 1999 and from the
re-entering of development
stage on January 1, 1998
through December 31, 2000                  |  | 18  
| | Notes to Financial Statements                                                                                                                                                        |  | 20  
|

INDEPENDENT AUDITORS' REPORT

Board of Directors

**NEW HORIZON EDUCATION, INC.**

Salt Lake City, Utah

We have audited the accompanying balance sheet of New Horizon Education, Inc. [A Development Stage Company] as of
December 31, 2000, and the related statements of operations, comprehensive income (loss), stockholders' equity (deficit) and
cash flows for the years ended December 31, 2000 and 1999 and for the period from the re-entering of the development stage on
January 1, 1998 through 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 audited by us present fairly, in all material respects, the financial position of New
Horizon Education, Inc. [A Development Stage Company] as of December 31, 2000, and the results of its operations and its
cash flows for the years ended December 31, 2000 and 1999  and for the period from the re-entering of the development stage
on January 1, 1998 through December 31, 2000, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As
discussed in Note 4 to the financial statements, the Company has incurred significant losses since its inception and has not yet
been successful in establishing profitable operations.  Further, the Company has current liabilities in excess of current assets.
These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management's plans in
regards to these matters are also described in Note 4.  The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.

/s/ Pritchett, Siler & Hardy, P.C.

**PRITCHETT, SILER & HARDY, P.C.**

April 30, 2001, except for Note 9, as to which the date is August 3, 2001

Salt Lake City, Utah

|NEW HORIZON EDUCATION, INC.  
|-----------------------------
|[A Development Stage Company]
|**BALANCE SHEET**            
|**ASSETS**                   

|                                                                                 | December 31,
|-------------------------------------------------------------------------------- | ------------
|                                                                                 | 2000        
|**CURRENT ASSETS:**                                                             
|Cash                                                                             | $7,909      
|Total Current Assets                                                             | 7,909       
|                                                                                 | $7,909      
|                                                                                
|**LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**                              
|                                                                                
|**CURRENT LIABILITIES**                                                         
|Accounts payable                                                                 | $14,284     
|Accrued expenses                                                                 | 4,404       
|Total Current Liabilities                                                        | 18,688      
|                                                                                
|**STOCKHOLDERS' EQUITY (DEFICIT):**                                             
|Common stock, 100,000,000 shares                                                
|authorized, no par value, 2,906,863  shares issued and
outstanding, respectively | 7,269,483   
|Contributed capital                                                              | 53,519      
|Retained (deficit)                                                               | (7,054,134) 
|(Deficit) accumulated during development stage                                   | (279,647)   
|Total Stockholders' Equity Deficit                                               | (10,779)    
|****                                                                             | $7,909      
|                                                                                

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

|**NEW HORIZON EDUCATION, INC.**
|-------------------------------
|[A Development Stage Company]  
|                               
|**STATEMENTS OF OPERATIONS**   

|                                              |                                  |            | Cumulative from the
Re-entering of
Development Stage on
January 1, 1998 through
|--------------------------------------------- | -------------------------------- | ---------- | -------------------------------------------------------------------------------
|                                              | For the Years Ended
December 31, |            | December 31,                                                                   
|                                              | 2000                             | 1999       | 2000                                                                           
|**REVENUE**                                   | $          -                     | $        - | $        -                                                                     
|**EXPENSES:**                                
|General and administrative                    | 101,058                          | 29,120     | 142,206                                                                        
|Total Expenses                                | 101,058                          | 29,120     | 142,206                                                                        
|**LOSS BEFORE OTHER (EXPENSE)**               | (101,058)                        | (29,120)   | (142,206)                                                                      
|**OTHER (EXPENSE):**                         
|Loss on sale of securities available for sale | (57,441)                         | (80,000)   | (137,441)                                                                      
|**LOSS BEFORE INCOME TAXES**                  | (158,499)                        | (109,120)  | (279,647)                                                                      
|**CURRENT TAX EXPENSE**                       | -                                | -          | -                                                                              
|**DEFERRED TAX EXPENSE**                      | -                                | -          | -                                                                              
|**NET (LOSS)**                                | $(158,499)                       | $(109,120) | $(279,647)                                                                     
|                                             
|**LOSS PER COMMON SHARE**                     | $(.09)                           | $(.13)     | $(.25)                                                                         

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

|**NEW HORIZON EDUCATION, INC.**              
|---------------------------------------------
|[A Development Stage Company]                
|                                             
|**STATEMENTS OF COMPREHENSIVE INCOME (LOSS)**

|                                                                    |                                  |            | Cumulative from the
Re-entering of
Development Stage on
January 1, 1998 through
|------------------------------------------------------------------- | -------------------------------- | ---------- | -------------------------------------------------------------------------------
|                                                                    | For the Years Ended
December 31, |            | December 31,                                                                   
|                                                                    | 2000                             | 1999       | 2000                                                                           
|**NET INCOME (LOSS)**                                               | $(158,499)                       | $(109,120) | $(279,647)                                                                     
|**OTHER COMPREHENSIVE INCOME:**                                    
|Unrealized holding (loss) arising during period                     | (32,718)                         | (446,527)  | (1,250,000)                                                                    
|Plus: reclassification adjustment for losses
included in net income | 57,441                           | 80,000     | 137,441                                                                        
|**COMPREHENSIVE INCOME (LOSS)**                                     | $(133,776)                       | $(475,647) | $(1,392,206)                                                                   

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

|**NEW HORIZON EDUCATION, INC.**                                                               
|----------------------------------------------------------------------------------------------
|[A Development Stage Company]                                                                 
|**STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)**                                               
|**FROM THE RE-ENTERING OF THE DEVELOPMENT STAGE ON JANUARY 1, 1998 THROUGH DECEMBER
31, 2000**

|                                                                                                        |              |              |                     |                   |                                | Deficit
Accumulated
From the
Re-entering of
the Development
Stage on January
1, 1998 through
|------------------------------------------------------------------------------------------------------- | ------------ | ------------ | ------------------- | ----------------- | ------------------------------ | --------------------------------------------------------------------------------------------
|                                                                                                        | Common Stock | Common Stock |                     |                   |                                | December 31,                                                                                
|                                                                                                        | Shares       | Amount       | Contributed
Capital | Retained(Deficit) | Unrealized
Holding
Gain/(Loss) | 2000                                                                                        
|**BALANCE,**January 1, 1998                                                                             | 456,827      | $7,192,049   | $53,519             | $(7,054,134)      | $1,250,000                     | $-                                                                                          
|February 1998,
shares issued at
$.05 per share for
debt relief                                          | 110,000      | 5,500        |                     |                   |                                |                                                                                             
|June 1998, shares
issued  at $.05
per share for cash                                                    | 200,000      | 10,000       |                     |                   |                                |                                                                                             
|June 1998, shares
issued at $.05 per
share for services
rendered                                        | 30,000       | 1,500        |                     |                   |                                |                                                                                             
|Unrealized
holding (loss) on
marketable
securities                                                      |              |              |                     |                   | (770,755)                      |                                                                                             
|Net income for
the year  ended
December 31,
1998                                                        | __________   | _______      | _______             | _______           | _______                        | (12,028)                                                                                    
|**BALANCE,**
December 31,
1998                                                                          | 796,827      | 7,209,046    | 53,519              | (7,054,134)       | 479,245                        | (12,028)                                                                                    
|During 1999,
shares issued at
$.05 per share for
cash                                                   | 231,552      | 11,578       |                     |                   |                                |                                                                                             
|Unrealized
holding (loss) on
marketable
securities                                                      |              |              |                     |                   | (446,527)                      |                                                                                             
|Net (loss) for the
year ended
December 31,
1999                                                         | ________     | _________    | ________            | _________         | ________                       | (109,120)                                                                                   
|**BALANCE,**December 31,
1999                                                                           | 1,028,379    | 7,220,624    | 53,519              | (7,054,134)       | 32,718                         | (121,148)                                                                                   
|Unrealized
holding (loss) on
Marketable
securities                                                      |              |              |                     |                   | (32,718)                       |                                                                                             
|February- July
2000,  issued at
$.05 per share
shares for cash                                          | 377,184      | 18,859       |                     |                   |                                |                                                                                             
|Net increase in
shares issued due
to rounding and
purchasing of
fractional shares
in common stock
split | 1,300        |              |                     |                   |                                |                                                                                             
|August 2000,
shares issued at
$.02 per share for
cash                                                   | 1,500,000    | 30,000       |                     |                   |                                |                                                                                             
|Net (loss) for
year ended
December 31,
2000                                                             | __________   | _________    | ________            | ________          | _________                      | (158,499)                                                                                   
|**BALANCE,**December 31,
2000                                                                           | 2,906,863    | $7,269,483   | $53,519             | $(7,054,134)      | $    -                         | $(279,647)                                                                                  
|                                                                                                       

The accompanying notes are an integral part of this financial statement .

|**NEW HORIZON EDUCATION, INC.**
|-------------------------------
|[A Development Stage Company]  
|                               
|**STATEMENTS OF CASH FLOWS**   

|                                                                            |                                  |              | Cumulative from the
Re-entering of Development
Stage on January 1, 1998
through
|--------------------------------------------------------------------------- | -------------------------------- | ------------ | -------------------------------------------------------------------------------
|                                                                            | For the Years Ended December 31, | December 31,
|                                                                            | 2000                             | 1999         | 2000                                                                           
|**Cash Flows From Operating Activities:**                                  
|****Net loss                                                                | $(158,499)                       | $(109,120)   | $(279,647)                                                                     
|Adjustments to reconcile
net loss to net cash used by
operating activities: |                                  |              |                                                                                
|Realized loss on sale of
securities available for sale                      | 57,441                           | 80,000       | 137,441                                                                        
|Stock issued for services                                                   | -                                | -            | 1,500                                                                          
|Changes in assets and
liabilities:                                          |                                  |              |                                                                                
|(Increase) decrease in
receivable - related party                           | 1,770                            | (1,219)      | -                                                                              
|Increase (decrease) in
payable - related party                              | (1,187)                          | 1,187        | -                                                                              
|Increase in accounts
payable                                                | 14,284                           | -            | 14,284                                                                         
|Increase in accrued
expenses                                                | 804                              | 3,600        | 4,404                                                                          
|Net Cash (Used) by Operating
Activities                                     | (85,387)                         | (25,552)     | (122,018)                                                                      
|**Cash Flows From Investing Activities**                                   
|Proceeds from sale of
securities available for sale                         | 38,314                           | 20,000       | 58,314                                                                         
|Net Cash Provided by
Investing Activities                                   | 38,314                           | 20,000       | 58,314                                                                         
|**Cash Flows From Financing Activities:**                                  
|Proceeds from issuance of
common stock                                      | 48,859                           | 11,578       | 70,437                                                                         
|Net Cash Provided by
Financing Activities                                   | 48,859                           | 11,578       | 70,437                                                                         
|**Net Increase (Decrease)  in
Cash**                                        | 1,786                            | 6,026        | 6,733                                                                          
|**Cash at Beginning of the
Year**                                           | 6,123                            | 98           | 1,176                                                                          
|**Cash at End of the Year**                                                 | $7,909                           | $6,123       | $7,909                                                                         
|                                                                           

[Continued]

|**NEW HORIZON EDUCATION, INC.**
|-------------------------------
|[A Development Stage Company]  
|**STATEMENTS OF CASH FLOWS**   
|**[CONTINUED]**                

|                                                       |                                  |              | Cumulative from the
Re-entering of Development
Stage on January 1, 1998
through
|------------------------------------------------------ | -------------------------------- | ------------ | -------------------------------------------------------------------------------
|                                                       | For the Years Ended December 31, | December 31,
|                                                       | 2000                             | 1999         | 2000                                                                           
|                                                      
|**Supplemental Disclosures of Cash Flow Information:**
|****Cash paid during the period for:                  
|Interest                                               | $    -                           | $     -      | $      -                                                                       
|Income taxes                                           | $    -                           | $     -      | $      -                                                                       

|**Supplemental Schedule of Noncash Investing and Financing Activities:**                                                                                      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------
|For the year ended December 31, 2000:                                                                                                                         
|During June 2000, in connection with a common stock split, the Company issued 3,036 shares for rounding and purchased
fractional shares totaling 1,736 shares.
|For the year ended December 31, 1999:                                                                                                                         
|In 1999, the Company had unrealized holding losses of $446,527 relating to securities available for sales.                                                    

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

**NEW HORIZON EDUCATION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Organization -**The Company was incorporated under the laws of the state of Utah on May 9, 1972 as High-Line Investment
& Development Company.

On May 18, 1977 the Company changed its name to Gayle Industries, Inc.  On January 11, 1978 the Company merged into
Swing Bike.  On December 19, 1979 the Company changed its name to Horizon Energy Corporation.  On December 10, 1992
the Company changed its name to Millennium Entertainment Corp.

In 1993, the Company changed its name to New Horizon Education, Inc.  Also during 1993, the Company organized a wholly
owned subsidiary with the sole purpose of merging with Ruff Network Marketing, Inc.  the Subsidiary changed its name to New
Horizon Education, Inc. and began to network market computer software education programs.

In 1995, the Company entered an agreement with Homequest, Inc., whereby the Company sold off all assets associated with its
education software along with $100,000 to Homequest, Inc. in exchange for debt relief, notes receivable, and preferred stock of
Homequest.

At December 31, 1997, the Company entered into an agreement to sell its wholly owned subsidiary to Phoenix Ink, LLC, a
company controlled by Howard J. Ruff.  The agreement called for the Company to pay $5,500 toward taxes in exchange for debt
relief and all the shares of the subsidiary.  The Company is considered to have re-entered the development stage as of January 1,
1998.  The Company currently has no on-going operations and is seeking potential business mergers and ventures.

**Investments -**The Company accounts for investments in debt and equity securities in accordance with Statement of Financial
Accounting Standards (SFAS) 115, "Accounting for Certain Investments in Debt and Equity Securities."  Investments in
available-for-sale securities are carried at fair value.  Unrealized gains and losses, net of the deferred tax effects, are included as
a separate element of stockholders' equity.

**Comprehensive Income -**The Company adopted the provisions of SFAS No. 130, "Reporting Comprehensive Income."

**Development Stage** - The Company is considered a development stage company as defined in SFAS no. 7.  Since re-entering
the development stage on January 1, 1998 the Company is primarily seeking potential business mergers and ventures.

**Loss Per Share -** The computation of loss per share of common stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 6].

**NEW HORIZON EDUCATION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]**

**Cash and Cash Equivalents**- For purposes of the statement of cash flows, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be cash equivalents.

**Accounting Estimates** - The preparation of financial statements in conformity with generally accepted accounting principles
required management to make estimates and assumptions that effect the reported amounts of assets and liabilities, the
disclosures 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 estimated by management.

**Valuation of Stock Issued For Goods and Services -**The Company values stock issued for goods and services at the current
market price per share.

**Recently Enacted Accounting Standards -**Statement of Financial Accounting Standards (SFAS) No. 136, "Transfers of
Assets to a not for profit organization or charitable trust that raises or holds contributions for others", SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - deferral of the effective date of FASB Statement No. 133 (an
amendment of FASB Statement No. 133)", SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging
Activities - and Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No. 53 and Amendment to SFAS No 63,
89 and 21", and SFAS No. 140, "Accounting to Transfer and Servicing of Financial Assets and Extinguishment of Liabilities",
were recently issued.  SFAS No. 136, 137, 138, 139 and 140 have no current applicability to the Company or their effect on the
financial statements would not have been significant.

**Restatement -**In July 2000, the Company effected a 1 for 50 reverse stock split.  The financial statements have been restated,
for all periods presented, to reflect this stock split [See Note 7].

**NOTE 2 - INCOME TAXES**

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" which requires the liability approach for the effect of income taxes.

The Company has available at December 31, 1999, unused operating loss carryforwards of approximately $7,200,000 and
$7,100,000, respectively, which may be applied against future taxable income and which expire in various years through 2020.
If certain substantial changes in the Company's ownership should occur, there will be an annual limitation on the amount of net
operating loss carryforward which can be utilized.  The amount of and ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company
and other future events, the effects of which cannot be determined.  Because of the uncertainty surrounding the realization of the
loss carryforwards the Company has established a valuation allowance equal to the tax effect of the loss carryforwards
(approximately $2,250,000 and $2,410,000, respectively, at December 31, 2000 and 1999, therefore, no deferred tax asset has
been recognized for the loss carryforwards.  The change in the valuation allowance is equal to the tax effect of the current
period's net loss (approximately $40,000 and $4,000 for December 31, 1999, respectively).

**NEW HORIZON EDUCATION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 3 - RELATED PARTY TRANSACTIONS**

**Management Compensation -** For the years ended December 31, 2000 and 1999, the Company paid an officer $55,775 and
$23,000, respectively.

**Related Party Receivables and Payables -**At December 31, 1998, the Company had advanced $551 to another company
related through common control.  At December 31, 1999, the Company was owed $1,770 from an officer of the Company for
payroll taxes paid by the Company on behalf of the officer.  Also at December 31, 1999, the Company owed a total of $1,187 to
other companies related through common control.  These amounts were all received or paid in full during 2000.

**Office Space -** Prior to October 1999, the Company did not have a need to rent office space. An officer of the Company
allowed the Company to use his office as a mailing address, as needed, at no expense to the Company.  Since October 1999, the
Company has been paying $100 per month (on a month to month basis) to an unrelated party for office space.  Total rents paid
amounted to $1,200 and $300 for the years ended December 31, 2000 and 1999, respectively.

**NOTE 4 - GOING CONCERN**

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.  However, the Company has no on-going operations and has
incurred losses since its inception.  Further, the Company has current liabilities in excess of assets and has no working capital to
pay its expenses.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this
regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through
sales of its common stock or through a possible business combination with another company.  There is no assurance that the
Company will be successful in raising this additional capital or achieving profitable operations.  The financial statements do not
include any adjustments that might result from the outcome of these uncertainties.

**NOTE 5 - COMMITMENTS AND CONTINGENCIES******

On December 31, 1997, the Company sold its wholly-owed subsidiary by selling all shares of subsidiary stock.  The agreement
called for the Company to pay $5,500 in payroll taxes and for the subsidiary to be responsible for its remaining debt of
approximately $180,000. Management believes that the Company is not liable for any existing liabilities related to its former
subsidiary, but the possibility exists that creditors and others seeking relief from the former subsidiary may also include the
Company in claims and suits pursuant to the parent-subsidiary relationship which previously existed between the Company and
its former subsidiary.  The Company is not currently named in nor is it aware of any such claims or suits against its former
subsidiary.  Management believes that the Company would be successful in defending against any such claims and believes that
no material negative impact on the financial position of the Company would occur.  Management further believes that with the
passage of time the likelihood of any such claims being raised is becoming more remote.  No amounts have been reflected or
accrued in these financial statements for any contingent liability.

**NEW HORIZON EDUCATION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 6 - EARNINGS (LOSS) PER SHARE**

The following data show the amounts used in computing income (loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock for the years ended December 31, 2000 and 1999 and for the
period from the re-entering of development stage on January 1, 1998 through December 31, 1999:

|                                                                                                                |                                  |              | Cumulative from the
Re-entering of Development
Stage on January 1, 1998
through
|--------------------------------------------------------------------------------------------------------------- | -------------------------------- | ------------ | -------------------------------------------------------------------------------
|                                                                                                                | For the Years Ended December 31, | December 31,
|                                                                                                                | 2000                             | 1999         | 2000                                                                           
|(Loss) from continuing
operations available to
common stockholders
(numerator)                                  | $(158,499)                       | $(109,120)   | $(279,647)                                                                     
|Weighted average number of
common shares outstanding
used in earnings per share
during the period
(denominator) | 1,858,758                        | 828,335      | 1,122,490                                                                      

Dilutive earnings per share was not presented, as the Company had no common equivalent shares for all periods presented that
would effect the computation of diluted earnings (loss) per share.

**NOTE 7 - STOCK TRANSACTIONS**

In August 2000, the Company issued 1,500,000 shares of common stock to Steve White, the Company's president, for cash in
the amount of $30,000, or $.02 per share. This issuance resulted in a change in control of the Company.

In July 2000, the Company purchased all shares from shareholders which held one share or less.  The approximate number of
shares purchased and cancelled were 1,666 post-split shares.  The Company then effected a one for fifty reverse stock split and
cancelled all shares from shareholders with less than one share.  The approximate number of shares cancelled were 70 post-split
shares.  The Company then issued 3,036 shares for rounding of fractional shares to shareholders who held more than one
post-split share.  The net result is 1,300 shares of common stock being issued.

From February through July 2000, the Company issued 377,184 shares of common stock as follows:  100,000 shares of
common stock to 1st Zamora, Inc. for $5,000 for cash, or $.05 per share; 50,000 shares of common stock to LIBCO, Inc. for
$2,500 for cash, or $.05 per share;  50,000 post-split shares of common stock to Ingrid F. Nemelka for cash in the amount of
$2,500, or $.05 per share;  100,000 shares of common stock to David's Odyssey, LLC for $5,000 cash, or $.05 per share; 77,184
shares of common stock to Phoenix Ink, LLC for cash in the amount of $3,859, or $.05 per share.

**NEW HORIZON EDUCATION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 7 - STOCK TRANSACTIONS [Continued]**

From September 1999 through December 1999, the Company issued 231,552 shares of common stock to Phoenix Ink, LLC for
cash in the amount of $11,578, or $.05 per share.

In June 1998, the Company issued 30,000 shares of common stock to Steve White for services rendered valued at $1,500, or
$.05 per share.

In June 1998, the Company issued 200,000 shares of common stock to R-Odyssey Ventures, Inc. for cash in the amount of
$10,000, or $.05 per share.

In February 1998 the Company issued 110,000 shares of common stock to Phoenix Ink, LLC for debt relief of $5,500, or $.05
per share.

**NOTE 8 - MARKETABLE SECURITIES**

The Company entered into an agreement with Homequest, Inc. in August 1995.  The Agreement stated that the Company was
to sell Homequest exclusive rights to sell, distribute, license, and market products of the Company, for a total purchase price of
$850,000.  The $850,000 sales price was to be paid as follows: $100,000 cash, one million shares of convertible preferred stock
of Homequest, Inc. at $.001 per share, $1,000 total; The assumption of $411,945 of notes payable; and the balance of $337,055
as a note receivable from Homequest, Inc.

In March 1995, the Company purchased 100,000 shares of Homequest, Inc. common stock for $100,000.  In November 1996,
Homequest had a three for one forward stock split, bringing the total shares held for investment to 300,000 shares of common
stock and three million preferred stock.

During 1995 through 1997, Homequest, Inc. paid a total of $242,300 towards its note receivable with the Company.

On December 31, 1997, Homequest, Inc. common stock had a price of $4.50 per share, bringing the carrying value of the
300,000 shares to $1,350,000 of which $1,250,000 was recorded as unrealized holding gain.

New horizon Education, Inc. (NHE) was carrying the 3,000,000 shares of Homequest preferred stock at a basis of $1,000 and
had a receivable balance of $94,755 on its note receivable from Homequest.  In April 1998, NHE agreed to settle the receivable
balance of $94,755 and return the 3,000,000 shares of preferred stock to Homequest for 200,000 shares of common stock of
Homequest.  The value of the 200,000 shares of common stock was negotiated to be $95,755, which was the carrying value of
the preferred stock ($1,000) and the balance of the note receivable ($94,755).

On December 31, 1998, Homequest, Inc. common stock had a price of $1.35 per share, bringing the carrying value of the
500,000 shares to $675,000.

During 1999, the Company sold 300,000 shares of Homequest, Inc. common stock for $20,000.  The Company carried these
shares at cost of $100,000 and recognized a loss of $80,000 on the sale of these shares.  This left the Company with 200,000
shares of Homequest common stock with a basis of $95,755.

**NEW HORIZON EDUCATION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 8 - MARKETABLE SECURITIES [Continued]**

In October 1999, Homequest, Inc. effected at 1 for 7.2 reverse split, bringing the balance of Homequest, Inc. common stock
held for investment to 27,778 shares.  At December 31, 1999 the Homequest, Inc. common stock had a market price of $4.63
per share for a total of $128,473 as the market value of these shares with a cost basis of $95,755 resulting in an unrealized
holding gain of $32,718.

During the year ended December 31, 2000, NHE sold the remaining 27,778 shares of common stock for $38,314, recognizing a
loss of $57,441 from the cost basis of $95,755.

**NOTE 9 - SUBSEQUENT EVENT**

On January 25, 2001, the Company entered into a stock subscription agreement with Jean Hullinger, a director of the Company.
The agreement was originally for the sale of 7,500,000 shares of the Company's common stock for $15,000, or $.002 per share.
However, on August 3, 2001 management renegotiated the agreement and determined that only 750,000 shares should have
been issued for $15,000, or $.02 per share. Accordingly, the director has returned 6,750,000 shares for cancellation.