<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                   FORM 10-KSB

           (Mark One)

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

For the Fiscal Year Ended December 31, 2001

                                       OR

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

           For the transition period from ____________ to ____________

                           Commission File No. 0-32007

                     UNITED NETWORK MARKETING SERVICES, INC.
            --------------------------------------------------------
           (Name of Small Business Issuer as specified in Its Charter)

           DELAWARE                                         13-4024018
-------------------------------                        ----------------------
(State or Other Jurisdiction of                           (I.R.S. Employer
Incorporation or Organization)                           Identification No.)

575 MADISON AVENUE, NEW YORK, NEW YORK                         10022
----------------------------------------               ----------------------
(Address of Principal Executive Offices)                     (Zip Code)


Registrant's Telephone Number, Including Area Code: (212)-688-2808
                                                    --------------

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

Securities registered pursuant to Section 12(g) of the Act:

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

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

       YES    /X/      NO    / /

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in

<PAGE>

definitive proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB / /.

Issuer's revenues for its most recent fiscal year.   -0-
                                                    -----

There is no established trading market for the registrant's common stock, the
only outstanding class of the registrant's common equity. In addition, no common
stock has been sold by the registrant since April 1999 other than 45,000 shares
issued in June 2001 for services rendered valued at $4,500. The Company's Board
of Directors estimates the current market value of the common stock to be
approximately $.10 per share based upon said June 2001 issuance and its own
internal valuation, or an aggregate of approximately $125,000 for shares held by
non-affiliates.

Number of shares outstanding of registrant's Common Stock as of
March 22, 2002: 3,365,000.
                ---------

The following documents are incorporated by reference herein: None.
                                                              ----



<PAGE>


CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

United Network Marketing Services, Inc. ("we," "UNMS" or the "Company") cautions
readers that certain important factors may affect our actual results and could
cause such results to differ materially from any forward-looking statements that
may be deemed to have been made in this Report or that are otherwise made by or
on our behalf. For this purpose, any statements contained in this Report that
are not statements of historical fact may be deemed to be forward-looking
statements. This Report contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified in certain cases
by the use of predictive, future-tense or forward-looking terminology, such as
"believes," "anticipates," "expects," "estimates," "plans," "may," "will," or
similar terms. These statements appear in a number of places in this Report and
include statements regarding our intent, belief or current expectations, our
directors or our officers with respect to, among other things: (i) the
commercialization of our products and services; (ii) trends affecting our
financial condition or results of operations for our limited history; (iii) our
business and growth strategies; (iv) our financing plans and (v) the Internet
and Internet commerce.

Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors.
Factors that could adversely affect actual results and performance include,
among others, our limited operating history, potential fluctuations in quarterly
operating results and expenses, government regulation, technological change,
market acceptance of our products and services, and competition.

The accompanying information contained in this Report, including, without
limitation, the information set forth under the heading "Part I, Item 1 -
Description of Business - Risk Factors," identifies important additional factors
that could materially adversely affect actual results and performance. All of
these factors should be carefully considered and evaluated. All forward-looking
statements attributable to us are expressly qualified in their entirety by the
foregoing cautionary statement. Any forward-looking statements in this Report
should be evaluated in light of these important risk factors. We are also
subject to other risks detailed herein or set forth from time to time in our
future filings with the Securities and Exchange Commission.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS
         -----------------------

THE COMPANY

                                       1

<PAGE>

United Network Marketing Services, Inc. (sometimes referred to as "we," "UNMS"
or the "Company") is a development stage company with minimal operations since
inception in September 1998.

We have significant immediate cash requirements related to our working capital
needs. If we are unable to obtain financing either from a public or private
offering of our securities, a strategic joint venture or partnership, or
otherwise, we will be unable to expand our operations. This would have a
material adverse effect on us. If we raise additional funds by issuing equity or
convertible debt securities, such securities may have rights, preferences or
privileges senior to those of our existing stockholders and the percentage
ownership of our stockholders will be diluted. We can give no assurance that
additional financing will be available on favorable terms or at all. If adequate
funds are not available or are not available on acceptable terms, our ability to
fund our expansion, take advantage of opportunities, develop or enhance services
or products or otherwise respond to competitive pressures would be significantly
limited.

We currently own a fifty percent (50%) interest in AccessNewAge Corporation
("AccessNewAge"), which owns and operates an Internet website that was launched
in April 1996. The website, , offers a large selection of "New Age" information,
products and services - most of which are holistic, esoteric, spiritual,
metaphysical and/or philosophical in character. We currently have no operations
or material business interests independent of AccessNewAge. However, we are
considering strategic alliances and the acquisition of complementary businesses,
websites, technologies, content or products.

HISTORY

Upon our formation, we were a wholly-owned subsidiary of United Network
Technologies, Inc., a Delaware corporation ("UNTI"). In January 1999, all of our
issued and outstanding shares were distributed as a dividend to the stockholders
of UNTI of record as of September 29, 1998 (other than UNMS, which owned 6,533
shares of UNTI common stock but waived its right to receive the dividend).
Following the dividend, UNTI no longer owned any of our shares.

UNTI declared the dividend in connection with a "reverse" merger transaction
(the "Merger") in which PanAgra International Corporation merged with and into
UNTI, the stockholders of PanAgra International Corporation acquired a
controlling interest in UNTI, and UNTI changed its name to PanAgra International
Corporation. In contemplation of the Merger, UNTI transferred to UNMS
approximately $395,000 cash, 32,665 shares of UNTI (representing less than a 1%
interest), a $30,000 note of a former executive officer of UNTI and the Company,
and certain equipment. In addition, UNTI transferred to us all of the
outstanding shares of TrueYou.com Inc. ("TrueYou"), which was then a wholly
owned subsidiary of UNTI. The principal asset of TrueYou at the time was certain
proprietary software.

                                       2

<PAGE>

In April 1999, we distributed to our shareholders as a dividend all of the
TrueYou shares owned by us. TrueYou currently develops and sells training and
professional self-help programs known as BEST STEPS through its website, BEST
STEPS are three-minute text and audio modules that are educational and
motivational, providing information written and narrated by best-selling
authors. They are designed to make participants more effective in various
"communities," including success, business, selling, communications,
relationships, health and fitness and serenity.

In May 1999, we acquired a 50% ownership interest in AccessNewAge at a cost of
$17,000 and loaned AccessNewAge the sum of $8,000. The loan bears interest at
the rate of 8% per annum and is payable in full on May 15, 2002. We currently
have no operations or material business interests independent of AccessNewAge.

In July 1999, we purchased 100,000 shares of TrueYou, which represented less
than a 3% interest, for $150,000. During the past two years, TrueYou has engaged
principally in start-up activities, including development of a business plan,
raising capital to finance operations, hiring of key employees, acquisition and
development of BEST STEPS, and creation of website and related content. TrueYou
completed its website and commenced initial sales and marketing efforts during
2000. Such efforts had limited success and resulted in total revenues of only
approximately $49,000 and $27,000 during the years ended December 31, 2001 and
December 31, 2000, respectively. Alan Gelband, one of our directors and the
controlling shareholder of the Company, is the founder, Chairman, Chief
Executive officer and a principal shareholder of TrueYou. We sold our 100,000
shares of TrueYou (which represented approximately a 2% interest at the time of
sale) in February 2001 to a non-affiliated third party in an arms-length
transaction for $25,000.

In September 2001, we accepted 90,000 shares of TrueYou and 10,000 shares of
UNMS from Daren Tolz, a former officer and director of UNMS, in settlement of a
dispute. In consideration for such shares, we agreed that a certain nonrecourse
promissory note payable by Mr. Tolz to UNMS was deemed satisfied in full.

In September 1999, we co-founded and acquired a 50% interest in
MyHealthPower.com Inc. ("MHP") with a $30,000 investment. MHP was created to
develop web-based medical and health information services. MHP discontinued its
operations in December 1999, prior to engaging in any active operations, due to
our adverse assessment of MHP's proposed business.

ACCESSNEWAGE.COM

AccessNewAge.com offers a large selection of "New Age" information, products and
services - most of which are holistic, esoteric, spiritual, metaphysical and/or
philosophical in character.


                                       3
<PAGE>

The products include aromatherapy products, crystals and minerals, tapes and
CDs, books and gift items. The aromatherapy products are comprised of a line of
over 400 items including healing salves, oils, creams and incense. The books
cover numerous subjects, many dedicated to mind-body-spirit topics, such as
alternative and holistic health, astrology, Eastern religions, philosophy,
inspiration, self-help, mysticism, mythology, music and tarot.

AccessNewAge.com also features an on-line magazine called "Looking Deeper,"
which features articles on topics of personal growth, health and healing,
meditation, yoga, spiritual teachings, environmental awareness, astrology,
mysticism, and other New Age themes.

The website has received awards for "Website Excellence" from Forest Moon
Metaphysical Center, "Most Informative Site of the Week" from The NYC Insider,
and "Website of the Week" from AstroPro.

AccessNewAge.com was initially launched in April 1996. However, there are
currently no on-line links and limited sources of advertising designed to
promote the site and product sales. As a result, revenues of AccessNewAge have
been limited (approximately $45,340 and $29,000 during 2001 and 2000,
respectively) and insufficient to generate cash flow distributable to UNMS.
AccessNewAge had net income of approximately $7,660 in fiscal 2001 and a net
loss of approximately $1,225 in 2000. We are consulting with management of
AccessNewAge to develop an advertising and marketing strategy designed to
increase visits to the site, purchases of products, and thereby revenues and
profitability. There can be no assurance that we will be successful in
developing or implementing such a strategy or that AccessNewAge will otherwise
succeed in increasing revenues.

AccessNewAge does not maintain any inventory of products offered on its website.
Product orders are processed by AccessNewAge and then sent to the product
manufacturer/supplier for order fulfillment.

EMPLOYEES

As of March 22, 2002, we had no full-time employees and one part-time employee,
Kenneth Levy, who is our President and Chief Executive Officer. Mr. Levy devotes
approximately one-third of his working time to the Company.

LEGAL PROCEEDINGS

There are no legal proceedings pending or, to our knowledge, threatened against
us.


                                       4
<PAGE>

                                  RISK FACTORS

RISKS RELATED TO OUR BUSINESS

DEVELOPMENT STAGE COMPANY

Since our incorporation in September 1998, our operating activities have
consisted primarily of start-up activities, raising start-up capital and
co-developing start-up web-based businesses. In May 1999, we acquired a 50%
ownership interest in AccessNewAge. Through December 31, 2001, AccessNewAge has
had limited revenues from product sales and advertising, and UNMS has had no
revenues to date from AccessNewAge. During the years ended December 31, 2001 and
2000, AccessNewAge generated gross revenues of only approximately $45,340 and
$29,000, respectively. We have no basis to believe that there will be any
material increase in revenues of AccessNewAge in the future based on its current
operations. Therefore, it is unlikely that we will derive any revenues from the
operations of AccessNewAge in the foreseeable future. Moreover, there can be no
assurance that our operations will generate any revenues from other sources or
that we will ever generate sufficient revenues to achieve profitability.

We currently own a small minority interest (approximately 1.9%) in TrueYou, a
private company that develops and sells training and professional self-help
programs. TrueYou generated revenues from operations of approximately $49,700
and $27,000 during the years ended December 31, 2001 and 2000, respectively, and
operated at a net loss. We purchased our original interest in July 1999 for
$150,000 and sold it in February 2001 for $25,000, representing a $125,000 loss.
In September 2001 we accepted 90,000 shares of TrueYou from a former officer and
director of UNMS as part of a settlement agreement. See "Description of Business
History."

In September 1999, we co-founded and acquired a 50% interest in MHP with a
$30,000 investment. MHP was created to develop web-based medical and health
information services. MHP discontinued its operations in December 1999, prior to
engaging in any active operations, due to our adverse assessment of MHP's
proposed business.

We have only a limited operating history upon which an evaluation of our
prospects can be based. Our current and proposed operations are subject to all
of the risks inherent in the establishment of a new business enterprise. The
likelihood of our success must be considered in light of the problems, expenses,
difficulties, complications and delays frequently encountered by companies in an
early stage of development, particularly companies engaged in new and rapidly
evolving markets, such as an Internet-based business. We can give no assurance
that we will be able to successfully develop internet technology and content or
grow the AccessNewAge business.

HISTORY OF LOSSES; LACK OF REVENUE


                                       5
<PAGE>

During the years ended December 31, 1999, 2000 and 2001, we had no revenues and
our operating expenses have resulted in losses of $217,045, $249,625, and
$72,446, respectively. We expect to incur additional operating losses and to
experience continued negative cash flow from operations for the foreseeable
future. We can give no assurance that we can achieve, sustain or increase
revenues or profitability in the future.

LACK OF MARKETING EXPERIENCE

We are a development stage enterprise and have only limited marketing
experience. The transition from a start-up operation to an enterprise capable of
effectively marketing a website based business requires additional management,
technical personnel, capital and other resources. Failure to meet marketing
standards could prevent or delay the effective commercialization of our sites
and products, even if successfully developed by us. There can be no assurance
that we or our business partners will be able to effectively market our products
and services.

DEPENDENCE ON THE INTERNET; UNCERTAIN ACCEPTANCE OF THE INTERNET AS A MEDIUM FOR
COMMERCE

Use of the Internet by consumers is at an early stage of development, and market
acceptance of the Internet as a medium for commerce is subject to a high level
of uncertainty. The Internet may not prove to be a viable commercial marketplace
because of inadequate development of the necessary infrastructure, such as
reliable network backbones, or complementary services, such as high-speed modems
and security procedures for financial transactions or delays in the development
and adoption of new standards and protocols to handle increased levels of
Internet activity or due to increased government regulation. In addition to such
technical obstacles, the Internet may not be accepted by consumers at
significant enough levels to sustain businesses that rely exclusively on
e-commerce. Our future success will depend on our ability to generate and
significantly increase revenue which will require the development and widespread
acceptance of the Internet as a medium for commerce. We can give no assurance
that the Internet will be a successful retailing channel. If use of the Internet
does not continue to grow, or if the necessary Internet infrastructure or
complementary services are not developed to effectively support growth that may
occur, our business, results of operations, and financial condition could be
materially adversely affected. We can give no assurance that we will not
continue to be largely dependent on the Internet.

DEPENDANCE ON THE DEVELOPMENT OF THE INTERNET AND THE AVAILABILITY OF INCREASED
BANDWIDTH TO CONSUMERS

The success of our business will depend largely on the development and
maintenance of the Internet infrastructure. This includes maintenance of a
reliable network with the necessary speed, data capacity and security, as well
as timely development of complementary products such


                                       6
<PAGE>

as high speed modems, for providing reliable Internet access and services.
Because global commerce on the Internet and the online exchange of information
is new and evolving, we cannot predict whether the Internet will prove to be a
viable commercial marketplace in the long term. The success of our business will
rely on the continued improvement of the Internet as a convenient means of
consumer interaction and commerce, as well as an efficient medium for the
delivery and distribution of consumer products such as those offered by
AccessNewAge. The Internet has experienced, and is likely to continue to
experience, significant growth in the numbers of users and amount of traffic. As
the Internet continues to experience increased numbers of users, increased
frequency of use and increased bandwidth requirements, the Internet
infrastructure may be unable to support the demands placed on it. In addition,
increased users or bandwidth requirements may harm the performance of the
Internet. The Internet has experienced a variety of outages and other delays as
a result of damage to portions of its infrastructure, and it could face outages
and delays in the future. These outages and delays could reduce the level of
Internet usage as well as the level of traffic, and could result in the Internet
becoming an inconvenient or uneconomical source of commerce. The infrastructure
and complementary products or services necessary to make the Internet a viable
commercial marketplace for the long term may not be developed successfully or in
a timely manner. Even if these products or services are developed, the Internet
may not become a viable commercial marketplace for the products or services that
we or our business partners offer.

DEPENDENCE ON THIRD PARTIES FOR INTERNET OPERATIONS

Our ability to advertise on other Internet sites and the willingness of the
owners of such sites to direct users to our websites through hypertext links may
be critical to the success of our Internet operations. We may also rely on the
cooperation of owners of Internet search services and on our relationships with
third party vendors of Internet development tools and technologies. We can give
no assurance that the necessary cooperation from third parties will be available
on acceptable commercial terms or at all. If we are unable to develop and
maintain satisfactory relationships with such third parties on acceptable
commercial terms, or if our competitors are better able to leverage such
relationships, our business, results of operations and financial condition will
be materially adversely affected.


                                       7
<PAGE>

RISKS RELATED TO SALES, MARKETING AND COMPETITION

DIFFICULTIES ASSOCIATED WITH BRAND DEVELOPMENT

We believe that the importance of brand recognition will increase in the future
as the number of websites providing products and services increases. There are
many distributors of "New Age" related products and other products we may become
associated with, both online and traditional, who enjoy customer brand
recognition and compete with us in the digital distribution and mail order
markets. Many of these distributors have superior financial strength and
resources. We believe that establishing and increasing awareness of brand names
-- such as "AccessNewAge" -- is a critical aspect of our efforts to continue to
attract customers and content providers. We may need to invest heavily in brand
development in order to establish a market presence. We can give no assurances
that our efforts to build brand awareness will be successful or that we will
have sufficient financing to pursue brand development successfully.

COMPETITION

The market for users, e-commerce, and Internet advertising is new and rapidly
evolving, and competition for users and advertisers is intense and is expected
to increase significantly. Barriers to entry are relatively insubstantial and we
may face competitive pressures from many additional companies both in the United
States and abroad. We believe that the principal competitive factors for
companies seeking to create sites on the Internet are critical mass,
functionality of the website, and brand recognition.

We face significant competition from many large, established online communities
and services that develop and market Internet content for consumer based
websites or otherwise create and operate such websites. These competitors, which
have significantly greater financial, technological and marketing resources than
us, include Yahoo! Inc., AOL Time Warner, At Home Corporation, Amazon.com Inc.
and Microsoft Corporation. In addition, Internet sites may be developed or
acquired by companies currently operating web directories, search engines,
shareware archives, content sites, OSPs, ISPs and other entities, many of which
are likely to have substantially more resources than us. Furthermore, we compete
for users and advertisers with other content providers and with thousands of
websites operated by individuals, the government and educational institutions.
We also face competitive pressure from traditional media such as newspapers,
magazines, radio and television. We believe that the principal competitive
factors in generating e-commerce revenue and attracting advertisers include the
amount of traffic on its website, brand recognition, customer service, the
demographics of our users, our ability to offer targeted audiences and the
overall cost-effectiveness of the distribution and advertising medium offered by
us. We believe that the number of Internet companies relying on Internet-based
e-commerce and advertising revenue, as well as the number of advertisers on the
Internet and the number of users, will increase substantially in the future.


                                       8
<PAGE>

Accordingly, we will likely face increased competition, resulting in increased
pricing pressures on the pricing of our products and the advertising rates,
which could have a material adverse effect on us.

The e-commerce market is new and rapidly evolving and competition among
e-commerce merchants is expected to increase significantly. We are relying on
e-commerce partners such as AccessNewAge to generate e-commerce revenues. Our
ability to generate revenues from any of its present or future e-commerce
partners may be adversely affected by competition between any such partner and
other Internet retailers.

The Internet has had a limited effect on the market for "New Age" products and
services. The current marketplace is characterized by hundreds and perhaps
thousands of small sites - almost all of which are privately owned - that sell
or provide "New Age" related products or services. We have no knowledge that any
particular competitors are dominant in the web-based New Age products industry.

COMPETITION FOR AND EXECUTING STRATEGIC ALLIANCES AND ACQUISITIONS

Our business strategy includes entering into strategic alliances and may include
acquiring complementary businesses, websites, technologies, content or products.
We may be unable to complete suitable strategic alliances and acquisitions on
commercially reasonable terms, if at all. We expect to face competition for
strategic alliance and acquisition candidates and sponsorships. This competition
could impair our ability to successfully pursue these aspects of our business
strategy. Strategic alliances or acquisitions could disrupt our ongoing
business, distract our management and employees and increase our expenses. If we
acquire a company, we could face difficulties assimilating that company's
personnel and operations. In addition, the key personnel of the acquired company
may decide not to work for us. Acquisitions of additional services or
technologies also involve risks of incompatibility and lack of integration into
our existing operations. If we finance the acquisitions by incurring debt or
issuing equity securities, this could dilute our existing stockholders. Any
amortization of goodwill or other assets, or other charges resulting from the
costs of such acquisitions, could adversely affect our operating results.

RISKS RELATED TO OPERATIONS

NEED TO ENHANCE AND DEVELOP ACCESSNEWAGE.COM TO REMAIN COMPETITIVE

To remain competitive, AccessNewAge must enhance and improve the responsiveness,
functionality and features of AccessNewAge.com and expand its offering of
products and services. Enhancements of or improvements to the website may
contain undetected programming errors that require significant design
modifications, resulting in a loss of customer confidence and user support and a
decrease in the value of our brand name recognition.


                                       9
<PAGE>

In addition, any failure to effectively develop and introduce new features and
functions, or the failure of such new features and functions to achieve market
acceptance, could have a material adverse effect on our business, results of
operations and financial condition.

We also hope to introduce new products and services, such as new content
targeted for specific user groups. There can be no assurance that we will be
successful in developing or introducing such products and services or that such
products and services will achieve market acceptance or enhance our brand name
recognition. Any failure to effectively develop and introduce these products and
services, or the failure of such products and services to achieve market
acceptance, could have a material adverse effect on our business, results of
operations and financial condition.

DEPENDENCE ON KEY PERSONNEL

Our success is dependent, in part, upon key management personnel. In particular,
we are highly dependent upon Kenneth Levy, our President and Chief Executive
Officer. Mr. Levy is primarily responsible for our day-to-day strategic planning
and financing arrangements. Until March 1, 2001, Mr. Levy worked for us on a
limited basis, with no compensation. He engaged in other projects unrelated to
the Company which required significant time commitments. Thereafter through
December 31, 2001, Mr. Levy devoted approximately two-thirds of his work time to
us under an agreement that expired on February 28, 2002. Due to our limited
capital, the agreement was amended as of January 1, 2002 to reduce Mr. Levy's
work time and compensation. He currently devotes approximately one-third of his
work time to us. The loss of his services could have a material adverse effect
on us.

Our future performance may be substantially dependent on hiring management and
other key personnel and our ability to retain and motivate them. The loss of the
services of any of our officers or senior managers could harm our business.

ONLINE SECURITY

If the security measures that we use to protect personal information are
ineffective, we may lose visitors and our business would be harmed. We will rely
on security and authentication technology licensed from third parties. With this
technology, we can perform real-time credit card authorization and verification.
We cannot predict whether new technological developments could allow these
security measures to be circumvented. In addition, our software, databases and
servers may be vulnerable to computer viruses, physical or electronic break-ins
and similar disruptions. We may need to spend significant resources to protect
against security breaches or to alleviate problems caused by any breaches. We
cannot assure that we can prevent all security breaches.

A party who is able to circumvent our security measures could misappropriate
proprietary information or cause interruptions in our


                                       10
<PAGE>

Internet operations. Consumer concern over Internet security has been, and could
continue to be, a barrier to commercial activities requiring consumers to send
their credit card information over the Internet. Computer viruses, break-ins, or
other security problems could lead to misappropriation of proprietary
information and interruptions, delays, or cessation in service to our customers.
Moreover, until more comprehensive security technologies are developed, the
security and privacy concerns of existing and potential customers may inhibit
the growth of the Internet merchandising medium. We may be required to expend
significant capital resources to protect against the threat of such security
breaches or to alleviate problems caused by such breaches. We can give no
assurance that our Internet operations are completely secure against potential
interruptions or that we can alleviate the problems should they occur.

FINANCIAL RISKS

SIGNIFICANT NEED FOR CASH; POSSIBLE LACK OF SUFFICIENT FUNDS

We have significant immediate cash requirements related to our working capital
needs. If we are unable to obtain financing either from a public or private
offering of our securities, a strategic joint venture or partnership, or
otherwise, we will be unable to expand our operations. This would have a
material adverse effect on us. If we raise additional funds by issuing equity or
convertible debt securities, such securities may have rights, preferences or
privileges senior to those of our existing stockholders and the percentage
ownership of our stockholders will be diluted. We can give no assurance that
additional financing will be available on favorable terms or at all. If adequate
funds are not available or are not available on acceptable terms, our ability to
fund our expansion, take advantage of opportunities, develop or enhance services
or products or otherwise respond to competitive pressures would be significantly
limited.

CONTROL BY PRINCIPAL STOCKHOLDERS

Mr. Alan Gelband, one of our directors, beneficially owns over [61.0%] of our
issued and outstanding Common Stock and, therefore, may be able to influence or
control the outcome of substantially all actions requiring stockholder approval,
including the election of the entire Board of Directors, and the outcome of any
stockholder votes concerning a merger, asset sale, or other major corporate
transaction affecting us. Such control could also have the effect of delaying,
deterring, or preventing an unsolicited takeover of the Company. In addition,
Mr. Gelband (through a pension plan) holds a warrant to purchase an additional
1,000,000 shares of our Common Stock which upon exercise would substantially
increase his beneficial ownership of Common Stock.


                                       11
<PAGE>

NO CASH DIVIDENDS

We have never paid any cash dividends on our Common Stock and it is unlikely
that we will have sufficient profits to pay cash dividends in the foreseeable
future.

NO PUBLIC MARKET; LACK OF LIQUIDITY

There is only a very limited public market for our Common Stock and there can be
no assurance that an active public market will ever develop, or that if
developed, it will be sustained. In addition, even if an active public market
for the Common Stock is developed, the market prices of securities of technology
companies, particularly Internet-related companies, have been extremely
volatile, and have experienced fluctuations that have often been unrelated to or
disproportionate to the operating performance of such companies. Moreover,
factors such as announcements by us of quarterly variations in our financial
results and changes in general market conditions, among other things, could
cause the market price of our shares to fluctuate significantly. In recent
years, the stock market has experienced significant price and volume
fluctuations.

OTHER RISKS

POSSIBLE ACQUISITIONS

We may seek out strategic acquisitions, joint ventures, and partnerships of and
with companies that management believes will facilitate our growth and
implementation of our business plan. Various business and financial risks
associated with acquisitions by us, if consummated, could result in significant
changes to our leverage, liquidity and earnings capabilities. There are
currently no agreements or understandings currently in effect related to any
acquisitions. There can be no assurance that any acquisitions will be made, or
that if made, will be of material benefit to us.

PENNY STOCK REGULATION

The Commission recently adopted rules that regulate broker-dealer practices in
connection with transactions in "penny stocks." Penny stocks generally are
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 such securities is provided by the exchange or system). Since
our stock trades at less than $5.00, it is subject to the penny stock rules. The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the Commission that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the


                                       12
<PAGE>

transaction and monthly account statements showing the market value of each
penny stock held in the customer's account. The bid and offer quotations, and
the broker-dealer and salesperson compensation information, must be given to the
customer orally or in writing before or with the customer's confirmation. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from such 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 agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Since our stock is subject to the penny stock rules,
stockholders may find it more difficult to sell their shares of Common Stock.

FORWARD LOOKING STATEMENTS

This Report contains certain forward-looking statements concerning our business
strategies, operations, economic performance and financial conditions. These
statements are based upon a number of assumptions and estimates which are
inherently subject to significant uncertainties and contingencies, many of which
are beyond our control and reflect future business decisions which are subject
to change. Some of these assumptions inevitably will not materialize, and
unanticipated events will occur which will affect our results. Consequently,
actual results will vary from the statements contained herein and such variance
may be, and is likely to be, material. Prospective investors should not place
undue reliance on this information. In addition, we undertake no obligation to
update forward looking statements even if our goals, strategies and expectations
change from time to time.

ITEM 2.  DESCRIPTION OF PROPERTY

As of January 1, 2002, our principal office space is provided by one of our
directors, Alan Gelband. It is located at 575 Madison Avenue, New York, New
York. Our President, Ken Levy, uses his home for most of his business activities
related to UNMS and does not charge any rent to UNMS. During 2001, we paid an
aggregate of $9,600 for rent pursuant to an agreement with TrueYou under which
TrueYou provided office space and computer equipment and permitted us to use
TrueYou's telephone system, photocopy and facsimile machines and printers. This
agreement expired on December 31, 2001. We do not own or lease any other real
property. We had no rent expense during the years ended December 31, 1999 and
2000. During that period, the Company operated its day-to-day business
principally through consultants and thereby had nominal space requirements.
Administrative services were provided by TrueYou, which was paid a fee of
$32,000 during the fiscal year ended December 31, 2000 under an informal oral
arrangement.

Although we do not have any formal investment policies, we have no present
intention to make any investments in, or acquire any interests


                                       13
<PAGE>

in, real estate, real estate mortgages, real estate investment trusts or other
real estate related securities or investments.

ITEM 3.  LEGAL PROCEEDINGS

We are not a party to any legal proceedings which could have a material adverse
effect on our business.

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

No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 2001.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND
         RELATED STOCKHOLDER MATTERS

In July 2001, shares of our Common Stock commenced trading on the OTC Bulletin
Board under the symbol UMKG. However, trading is extremely sporadic and there is
currently virtually no public trading market for our Common Stock.

The following table sets forth, for the period indicated, the high and low bid
prices for our shares of Common Stock from July 25, 2001 through December 31,
2001 as reported by NASDAQ Pink Sheet Library:

                                                          High Bid   Low Bid
                                                          --------   -------
Year Ended December 31, 2001
         Third Quarter                                      $.12      $.10
         Fourth Quarter                                     $.12      $.12

Quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.

As of January 31, 2002, we had 3,365,000 shares of Common Stock issued and
outstanding and approximately 287 holders of record of our shares of Common
Stock. In addition, we have outstanding (i) options to purchase an aggregate of
250,000 shares of Common Stock with an exercise price of $.10 per share (ii) 11%
promissory Notes in the principal amount of $125,000, and (iii) warrants
exercisable for 1,250,000 shares of Common Stock with an exercise price of $.10
per share.

We have not paid any cash dividends and do not anticipate that we will pay any
cash dividends on our Common Stock in the foreseeable future. Payment of
dividends is within the discretion of our Board of


                                       14
<PAGE>

Directors and will depend, among other factors, upon our earnings, financial
condition and capital requirements.

On November 8, 2000, affiliates (pension plans) of Kenneth Levy, an officer and
director of the Company, and Alan Gelband, a director and principal stockholder
of the Company, entered into Subscription Agreements to purchase 11% Promissory
Notes in the aggregate principal amount of $125,000 and warrants to purchase an
aggregate of 1,250,000 shares of Common Stock. The subscription price of
$100,000 from Mr. Gelband's pension plan was paid in December 2000 and the
subscription price of $25,000 from Mr. Levy's pension plan was paid in January
2001. These transactions were private transactions not involving a public
offering and were exempt from the registration provisions of the Securities Act
of 1933, as amended, pursuant to Section 4(2) thereof. No underwriter was
engaged in connection with the foregoing sales of securities.

ITEM 6.  PLAN OF OPERATION

As of December 31, 2001, we had a cash balance of approximately $32,964. In
November 2000, we received subscriptions from two of our principals (through
pension plans) to purchase 11% Promissory Notes of the Company in the aggregate
principal amount of $125,000 and warrants to purchase an aggregate of 1,250,000
shares of Common Stock. The Notes are due and payable on May 31, 2002. The
warrants have a five-year term, have an exercise price of $.10 per share and
have "cashless" exercise features. Subscriptions for the notes and warrants were
paid in December 2000 ($100,000) and January 2001 ($25,000). Based on our
current cash position and funding commitments of management, we believe we could
maintain our operations as currently conducted and satisfy our cash requirements
for the next twelve (12) months. However, in order to expand our operations we
will be required to raise additional funds in the near future through equity or
debt offerings or otherwise. If successful in raising funds, we will endeavor to
expand the marketing and product service offerings of AccessNewAge and/or
develop or acquire additional business operations, including new websites
offering consumer products and services. This will likely require the hiring of
one to three full time employees, depending on the scope of our operations. We
do not anticipate performing significant product research and development or
purchasing plant or significant equipment during the next twelve months.

ITEM 7.  FINANCIAL STATEMENTS

See Index to Financial Statements, which is Part III - Item 13 of this Report,
and the Financial Statements attached to this Report.

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

None.


                                       15
<PAGE>

                                    PART III

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

         NAME                             AGE        POSITION WITH THE COMPANY
         ----                             ---        -------------------------

         Kenneth Levy                     55         President and Director
         Alan Gelband                     57         Director

Kenneth Levy has served as our President since January 2000. Since that date he
has also served as Executive Vice President of TrueYou.com Inc., an
internet-based provider of professional and personal growth programs. From March
1996 to January 2000 he served as Senior Managing Director of Janssen/Meyers
Associates, an investment banking and brokerage firm. From October 1994 to March
1996, Mr. Levy served as President of Marshall, Alexander and Marshall, an
investment banking firm. Mr. Levy serves as Director of Orlando Predator
Entertainment Corporation (NASDAQ Small Cap), an owner of a number of Arena
Football League and AF2 teams.

Alan Gelband, founder of the Company, has served as President of AGC Investment
Bank and President of Alan Gelband & Company for more than the past five years.
He has been actively involved in the development of emerging growth companies
and mergers and acquisitions for over 15 years and has completed over 70
investment banking transactions. From September 1998 until January 2000, Mr.
Gelband served as Vice President and Secretary of UNMS. Since November 1998, Mr.
Gelband has served as Chief Executive Officer of TrueYou.com Inc. He has served
as the president and a member of the board of directors of the Association for
Corporate Growth International where he is currently a lifetime director.

SECTION 16(A)  BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under the securities laws of the United States, our directors, executive
officers, and any persons holding more than ten percent of our Common Stock are
required to report their initial ownership of the Common Stock and any
subsequent changes in their ownership to the Securities and Exchange Commission
("SEC"). Specific due dates have been established by the SEC, and we are
required to disclose in this Report any failure to file by those dates. However,
as we did not have a class of equity securities registered pursuant to Section
12 of the Exchange Act during fiscal 2000, no Section 16(a) reports were
required to be filed during fiscal 2000.


                                       16
<PAGE>

In January 2001, our Common Stock came registered under Section 12 of the
Exchange Act. Based upon the copies of Section 16(a) reports that the Company
received from such persons since the date that such reports were first required
to be filed, the Company believes that there has been compliance with all
Section 16(a) filing requirements applicable to such officers, directors, and
ten-percent beneficial owners for such fiscal year except as follows: The Form
3s of Kenneth Levy and Alan Gelband that were required to be filed on January
22, 2001 were not filed until March 9, 2001.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth all compensation paid in respect of the Chief
Executive Officer and those individuals who received compensation in excess of
$100,000 per year (collectively, the "Named Executive Officers"). We have one
Named Executive Officer, namely, Mr. Kenneth Levy, who serves as President and
is our sole officer. There were no individuals who received compensation in
excess of $100,000 in the most recently completed fiscal year.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                            ANNUAL COMPENSATION              LONG-TERM COMPENSATION
                                          ---------------------------------------------------------------
NAME AND PRINCIPAL POSITION      FISCAL    SALARY ($)     BONUS ($)      SECURITIES UNDERLYING OPTIONS/
                                  YEAR                                              SARS (#)
---------------------------------------------------------------------------------------------------------
<S>                               <C>        <C>             <C>                    <C>
KENNETH LEVY                      2001       20,000          -0-                      -0-
  PRESIDENT                       2000        -0-            -0-                    250,000
</TABLE>

During 2000, we paid Mr. Gelband, one of our directors, consulting fees of
approximately $55,000 through Alan Gelband & Company, a consulting company that
is wholly-owned by Mr. Gelband. He has been paid in full. The services were
provided under an oral arrangement. Mr. Gelband is not currently providing us
with any consulting services. During 1999, we paid Mr. Gelband (through his
consulting company) consulting fees of approximately $35,000.

Mr. Levy commenced his employment with us on November 1, 2000 and works on a
part-time basis. On November 1, 2000, Mr. Levy was granted an option to purchase
250,000 shares. The options have a five year term and an exercise price of $.10
per share. The options are currently fully exercisable. From January 1, 2000
through February 28, 2001, Mr. Levy devoted a substantial majority of his
working time to TrueYou. Prior to March 1, 2001, we did not pay any cash
compensation to Mr. Levy.

From March 1, 2001 through December 31, 2001, Mr. Levy devoted approximately
two-thirds of his working time to the Company pursuant to a written agreement.
Under the agreement, Mr. Levy served as our President and was paid a salary of
$2,000 per month. The agreement had a one-year term expiring February 28, 2002.
Due to our limited capital, the agreement was amended as of January 1, 2002 to
reduce his


                                       17
<PAGE>

work time to approximately one-third and his compensation to $1,000 per month.

OPTION PLANS AND GRANTS

An aggregate of 500,000 shares of Common Stock are reserved for issuance or
available for grant under our 2000 Stock Option Plan (the "Option Plan").
Options granted under the Option Plan may either be intended to qualify as
incentive stock options ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") or as non ISOs. The
Option Plan is administered in all respects by the Board of Directors or a
committee composed of at least two members of the Board of Directors who are
designated by the Board (the "Stock Option Committee"). The Stock Option
Committee may determine the persons to whom options are to be granted and the
number of shares subject to each option. Under the terms of the Option Plan, all
officers, directors, employees and consultants of the Company or subsidiaries of
the Company are eligible for option grants. The option exercise price of options
granted under the Option Plan is fixed by the Stock Option Committee but, in the
case of ISOs must be no less than 100% of the fair market value of the shares of
Common Stock subject to the option at the time of grant, except that in the case
of an employee who possesses more than 10% of the total combined voting power of
all classes of stock of the Company (a "10% Holder"), the exercise price must be
no less than 110% of said fair market value. Options may be exercised by the
payment in full in cash or, at the discretion of the Stock Option Committee, by
the tendering of shares of Common Stock to acquire shares of Common Stock having
a fair market value, as determined by the Stock Option Committee, equal to the
option exercise price. Options granted under the Option Plan may not be
exercised more than ten years after the date of grant, five years in the case of
an ISO granted to a 10% Holder. Options to purchase 250,000 shares are currently
outstanding under the Option Plan, all of which were granted to Kenneth Levy,
our President. Such options, intended to qualify as ISOs, have a five year term
and an exercise price of $.10 per share.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN
         BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our
Common Stock as of January 31, 2001 by (i) each person known by us to be the
beneficial owner of more than five percent of our outstanding Common Stock, (ii)
each of our directors, (iii) our Chief Executive Officer (our sole officer), and
(iv) all of our officers and directors as a group. We believe that the
beneficial owners of the Common Stock listed below, based on information
furnished by such owners, have sole investment and voting power with respect to
such shares. On January 31, 2001, the Company had 3,365,000 shares issued and
outstanding.


                                       18
<PAGE>

Name and Address of                              Number of         Percent of
 Beneficial Owner                                 Shares             Class
--------------------------------------------------------------------------------
Alan Gelband                                    3,050,100(1)          69.9%
575 Madison Ave.
New York, NY 10022

Kenneth Levy                                      512,000(2)          13.3%
575 Madison Avenue
New York, NY 10022

All directors and officers as a group           3,562,100(1)(2)       73.2%
(2 persons)

(1)  Includes (i) 8,100 shares owned of record by a defined pension plan and
     trust of which Mr. Gelband is the beneficiary, (ii) 40,000 shares owned by
     Mr. Gelband's children, (iii) 2,000 shares owned by a charitable foundation
     of which Mr. Gelband and his wife are trustees and (iv) 2,000,000 shares
     owned directly by Mr. Gelband. Also includes 1,000,000 shares issuable upon
     exercise of warrants owned by a pension plan of which Mr. Gelband is the
     beneficiary. Does not include 10,000 shares owned by Mr. Gelband's wife.
     Mr. Gelband disclaims beneficial ownership of said shares owned by his
     wife.

(2)  Includes (i) 2,000 shares owned by Mr. Levy's children, (ii) 10,000 shares
     owned by pension plans of Mr. Levy and his wife, and (iii) 250,000 shares
     issuable upon exercise of options held by Mr. Levy that are currently
     exercisable. Also includes 250,000 shares issuable upon exercise of
     warrants owned by a pension plan of which Mr. Levy is the beneficiary.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Gelband, a founder, director and controlling stockholder of the Company, is
the founder, Chairman, Chief Executive Officer and a principal stockholder of
TrueYou.com Inc. ("TrueYou"). He currently owns approximately 41% of the issued
and outstanding common stock of TrueYou. Until February 2001, we owned less than
a 3% interest in TrueYou. See "Part I, Item 1 - Description of Business - the
Company." During the fiscal year ended December 31, 2000, TrueYou paid Mr.
Gelband compensation of $120,000, of which approximately $90,000 was accrued and
unpaid.

In April 1999, Mr. Gelband purchased 1,100,000 shares of our stock for $100,000.
He currently owns an approximately 60.9% stock interest in UNMS (69.9% giving
effect to shares issuable upon exercise of warrants held by Mr. Gelband). See
"Part III, Item 11 - Security Ownership of Certain Beneficial owners and
Management." During the fiscal years ended December 31, 1999 and 2000, we paid
Mr. Gelband (through Alan Gelband & Company, a consulting company that is
wholly-owned by Mr. Gelband) consulting fees of approximately $35,000 and
$55,000, respectively, of which approximately $20,000 (attributable to 2000) was
accrued and unpaid.

Mr. Levy, President and a director of the Company serves as Executive Vice
President of TrueYou, where he has been employed since January 1,


                                       19
<PAGE>

2000. During the fiscal year ended December 31, 2000, TrueYou paid Mr. Levy
compensation of $120,000 and issued him options to purchase 100,000 shares of
TrueYou stock. Those options have expired.

Mr. Levy was Vice President, Secretary and a director, and Mr. Gelband was Vice
President, Treasurer and a director, of MyHealthPower.com Inc. ("MHP") from
formation in September 1999 through December 1999 at which time MHP discontinued
its operations. Neither Mr. Levy nor Mr. Gelband has served at any time as an
officer or director of AccessNewAge. [HOWEVER, IT IS CONTEMPLATED THAT MESSRS.
LEVY AND GELBAND WILL BECOME DIRECTORS OF ACCESSNEWAGE IN OR ABOUT JUNE 2001??]

See "Part II, Item 6 - Plan of Operation" for a description of our promissory
notes and warrants purchased by Messrs. Gelband and Levy (through pension
plans). The notes, which are in the aggregate principal amount of $125,000 and
bear interest at the rate of 11% per annum, are due and payable in May 2002.

During the fiscal year ended December 31, 2000, we paid TrueYou a facility
management fee of approximately $32,000. In consideration for the fee, TrueYou
provided general administrative services. The services were provided under an
informal oral arrangement. From January 1, 2001 through December 31, 2001, the
Company paid TrueYou an aggregate of $9,600 pursuant to an agreement under which
TrueYou provided office space and computer equipment and permits us to use
TrueYou's telephone system, photocopy and facsimile machines and printers.

                INSERT RE FUNDING COMMITMENT OF GELBAND AND LEVY

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

(a)      Exhibit

No.      Description
-----    -----------

3. (a)   Certificate of Incorporation. Incorporated by reference to Exhibit
         2(a) of Registrant's Registration Statement on Form 10-SB, File No.
         0-32007.

   (b)   By-Laws. Incorporated by reference to Exhibit 2(b) of Registrant's
         Registration Statement on Form 10-SB, File No. 0-32007.

10.(a)   2000 Stock Option Plan. Incorporated by reference to Exhibit 6(a) of
         Registrant's Registration Statement on Form 10-SB, File No. 0-32007.

   (b)   Form of Stock Option Agreement under the 2000 Stock Option Plan.
         Incorporated by reference to Exhibit 6(b) of Registrant's Registration
         Statement on Form 10-SB, File No. 0-32007.

   (c)   Form of Unit Purchase Agreement (as amended). Incorporated by
         reference to Exhibit 6(c) of Registrant's Registration Statement on
         Form


                                       20
<PAGE>

         10-SB, File No. 0-32007.

   (d)   Form of 11% Note. Incorporated by reference to Exhibit 6(d) of
         Registrant's Registration Statement on Form 10-SB, File No. 0-32007.

   (e)   Form of Common Stock Purchase Warrant. Incorporated by reference to
         Exhibit 6(e) of Registrant's Registration Statement on Form 10-SB,
         File No. 0-32007.

   (f)   Employment Agreement between Registrant and Kenneth Levy. Incorporated
         by reference to Exhibit 6(f) of Registrant's Registration Statement on
         Form 10-SB, File No. 0-32007.

   (g)   Facility Agreement between Registrant and TrueYou.com Inc.
         Incorporated by reference to Exhibit 6(g) of Registrant's Registration
         Statement on Form 10-SB, File No. 0-32007.

   (h)   Stock Purchase Agreement between Registrant and AccessNewAge
         Corporation. Incorporated by reference to Exhibit 6(h) of Registrant's
         Registration Statement on Form 10-SB, File No. 0-32007.

(b)      Reports on Form 8-K: None.


                                       21
<PAGE>

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                        UNITED NETWORK MARKETING SERVICES, INC.


Dated: March 22, 2002                   By: /s/ Kenneth Levy
                                           -------------------------------------
                                           Kenneth Levy, President (Principal
                                           Executive Officer, Principal
                                           Financial Officer and Principal
                                           Accounting Officer)

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons son behalf of the registrant and in the
capacities and on the dates indicated.


/s/ Kenneth Levy                                 Date: March 22, 2002
-----------------------------------
Kenneth Levy, a Director
and President


/s/ Alan Gelband                                 Date: March 22, 2002
-----------------------------------
Alan Gelband, a Director


                                       22

<PAGE>

                                         UNITED NETWORK MARKETING SERVICES, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)


                                                   INDEX TO FINANCIAL STATEMENTS
================================================================================









INDEPENDENT AUDITOR'S REPORT                                          F-1


FINANCIAL STATEMENTS:

   Balance Sheet                                                      F-2
   Statement of Operations                                            F-3
   Statement of Stockholders' Equity (Deficiency)                     F-4
   Statement of Cash Flows                                            F-5
   Notes to Financial Statements                                   F-6 - F-11



<PAGE>












INDEPENDENT AUDITOR'S REPORT




To the Stockholders of
United Network Marketing Services, Inc.


We have audited the accompanying balance sheets of United Network Marketing
Services, Inc. (a development stage company) as of December 31, 2000 and 2001,
and the related statements of operations, stockholders' equity (deficiency), and
cash flows for the years then ended and the cumulative amounts for the period
from September 15, 1998 (date of incorporation) to December 31, 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United Network Marketing
Services, Inc. (a development stage company) as of December 31, 2000 and 2001
and the results of its operations and its cash flows for the years then ended
and the cumulative amounts for the period from September 15, 1998 (date of
incorporation) to December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America.




GOLDSTEIN GOLUB KESSLER LLP
New York, NY

February 23, 2002



<PAGE>
<TABLE>
<CAPTION>

                                                                            UNITED NETWORK MARKETING SERVICES, INC.
                                                                                      (A DEVELOPMENT STAGE COMPANY)

                                                                                                     BALANCE SHEET
==================================================================================================================

DECEMBER 31,                                                                          2000               2001
------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                <C>
ASSETS

Current Assets:
  Cash and cash equivalents                                                        $ 100,587          $  32,964
  Other current assets                                                                    65               -
  Notes receivable - related party                                                      -                 8,000

------------------------------------------------------------------------------------------------------------------
      TOTAL CURRENT ASSETS                                                           100,652             40,964

Property and Equipment - net                                                           2,818                804

Investments                                                                           33,885             25,528

Notes Receivable - related parties                                                     8,000             18,200

Deferred Income Tax Asset                                                               -                  -
------------------------------------------------------------------------------------------------------------------
      TOTAL ASSETS                                                                 $ 145,355          $  85,496
==================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
  Accounts payable and accrued expenses                                            $  49,139          $  16,456
  Notes payable - related parties                                                       -               117,881

------------------------------------------------------------------------------------------------------------------
      TOTAL CURRENT LIABILITIES                                                       49,139            134,337

Note Payable - related party                                                          81,111               -

------------------------------------------------------------------------------------------------------------------
      TOTAL LIABILITIES                                                              130,250            134,337
------------------------------------------------------------------------------------------------------------------

Commitments

Stockholders' Equity (Deficiency):
  Preferred stock - $.001 par value; authorized 1,000,000 shares;
   none issued
  Common stock - $.001 par value; authorized 20,000,000 shares;
   issued 3,330,000 and 3,365,000 shares, respectively                                 3,330              3,365
  Additional paid-in-capital                                                         552,803            561,268
  Deficit accumulated during the development stage                                  (541,028)          (613,474)
------------------------------------------------------------------------------------------------------------------

      TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)                                         15,105            (48,841)
------------------------------------------------------------------------------------------------------------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)                      $ 145,355          $  85,496
==================================================================================================================

                                                                                 See Notes to Financial Statements

                                                                                                               F-2
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                            UNITED NETWORK MARKETING SERVICES, INC.
                                                                                      (A DEVELOPMENT STAGE COMPANY)

                                                                                           STATEMENT OF OPERATIONS
==================================================================================================================

                                                                                                       PERIOD FROM
                                                                                                     SEPTEMBER 15,
                                                                                                     1998 (DATE OF
                                                          YEAR ENDED                YEAR ENDED   INCORPORATION) TO
                                                         DECEMBER 31,              DECEMBER 31,       DECEMBER 31,
                                                                2000                      2001                2001
------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                         <C>              <C>
General and administrative expenses:
  Salaries                                                       -                     $ 20,000         $   20,000
  Consulting fees                                           $  52,065                    10,000            208,731
  Write-off of note receivable from consultant                   -                         -                30,000
  Recovery of bad debt                                           -                      (23,500)           (23,500)
  Professional fees                                            44,497                    50,710            159,517
  Depreciation                                                  2,384                     2,014              8,897
  Stock transfer expense                                        2,791                     8,698             14,666
  Facility management                                          31,732                     9,600             42,832
  Taxes                                                         2,110                     1,779              6,732
  Interest and amortization of discount on debt                 2,028                    29,183             31,211
  Office expenses                                                -                          618              2,602
  Advertising                                                    -                         -                 1,243
  Miscellaneous                                                  -                         -                 2,433
------------------------------------------------------------------------------------------------------------------

Total general and administrative expenses                     137,607                   109,102            505,364

Interest and dividend income                                    4,164                     4,417             22,766

Gain on sale of stock                                            -                       38,096             38,096

Equity in loss of investments                                (116,182)                   (5,857)          (138,973)

Impairment loss on investment                                    -                         -               (29,999)

------------------------------------------------------------------------------------------------------------------
Net loss                                                    $(249,625)                 $(72,446)         $(613,474)
==================================================================================================================

Basic and diluted loss per common share                     $   (0.07)                 $  (0.02)
==================================================================================================================

Weighted-average number of common
 shares outstanding                                         3,330,000                 3,350,972
==================================================================================================================

                                                                                 See Notes to Financial Statements

                                                                                                               F-3
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                            UNITED NETWORK MARKETING SERVICES, INC.
                                                                                      (A DEVELOPMENT STAGE COMPANY)

                                                                     STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
====================================================================================================================================

PERIOD FROM SEPTEMBER 15, 1998 (DATE OF INCORPORATION) TO DECEMBER 31, 2001
------------------------------------------------------------------------------------------------------------------------------------

                                                                                                DEFICIT
                                                 COMMON STOCK                                 ACCUMULATED        TOTAL
                                             --------------------    ADDITIONAL                DURING THE     STOCKHOLDERS'
                                              NUMBER        PAR       PAID-IN    TREASURY     DEVELOPMENT       EQUITY      PRICE
                                    DATE     OF SHARES     VALUE      CAPITAL      STOCK         STAGE       (DEFICIENCY)  PER SHARE
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>        <C>          <C>        <C>           <C>         <C>            <C>            <C>
Issuance of common stock
 upon distribution from United
 Network Technologies, Inc.       9/29/98    2,230,000    $2,230     $390,810        -              -         $ 393,040      $.176

Net loss                                          -         -            -           -        $  (74,358)       (74,358)      -
------------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1998                 2,230,000     2,230      390,810        -           (74,358)       318,682       -

Issuance of common stock          4/07/99    1,100,000     1,100       98,900        -              -           100,000       .091

Negative equity of
 deconsolidated subsidiary                        -         -          43,093        -              -            43,093       -

Net loss                                          -         -            -           -          (217,045)      (217,045)      -
------------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1999                 3,330,000     3,330      532,803        -          (291,403)       244,730       -

Issuance of warrant in
connection with long-term debt                    -         -          20,000        -              -            20,000       -

Net loss                                          -         -            -           -          (249,625)      (249,625)      -
------------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2000                 3,330,000     3,330      552,803        -          (541,028)        15,105       -

Issuance of common stock for
 services rendered                6/21/01       45,000        45        4,455        -              -             4,500       .10

Issuance of warrant in
connection with long-term debt                    -         -           5,000        -              -             5,000       -

Receipt of treasury stock in
 settlement of prior obligation   9/20/01      (10,000)     -            -        $(1,000)          -            (1,000)      -

Retirement of treasury stock                      -          (10)        (990)      1,000           -              -          -

Net loss                                          -         -            -           -           (72,446)       (72,446)      -

------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2001                 3,365,000    $3,365     $561,268  $     -         $(613,474)    $  (48,841)      -
====================================================================================================================================

                                                                                 See Notes to Financial Statements

                                                                                                               F-4
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                                             UNITED NETWORK MARKETING SERVICES, INC.
                                                                                                       (A DEVELOPMENT STAGE COMPANY)

                                                                                                             STATEMENT OF CASH FLOWS
====================================================================================================================================

                                                                                                                        PERIOD FROM
                                                                                                                      SEPTEMBER 15,
                                                                                                                      1998 (DATE OF
                                                                              YEAR ENDED          YEAR ENDED      INCORPORATION) TO
                                                                             DECEMBER 31,        DECEMBER 31,           DECEMBER 31,
                                                                                    2000                2001                   2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                <C>                     <C>
Cash flows from operating activities:
  Net loss                                                                     $(249,625)         $  (72,446)             $(613,474)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation                                                                   2,384               2,014                  8,897
    Common stock issued for services                                                                   4,500                  4,500
    Amortization of debt discount                                                  1,111              16,770                 17,881
    Gain on sale of investments                                                                      (38,096)               (38,096)
    Impairment loss on investment                                                   -                   -                    29,999
    Uncollectible note receivable                                                   -                   -                    30,000
    Recovery of bad debt                                                            -                (23,500)               (23,500)
    Equity in loss of investments                                                116,182               5,857                138,973
    Changes in operating assets and liabilities:
      Decrease in other current assets                                             2,017                  65                  1,116
      Increase (decrease) in accounts payable and accrued expenses                20,163             (32,682)               (26,593)
------------------------------------------------------------------------------------------------------------------------------------
          NET CASH USED IN OPERATING ACTIVITIES                                 (107,768)           (137,518)              (470,297)
------------------------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Increase in notes receivable                                                      -                (18,200)               (26,200)
  Purchase of investments                                                           -                   -                  (197,000)
  Proceeds from sale of investments                                                 -                 63,095                 63,095
------------------------------------------------------------------------------------------------------------------------------------
          NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                       -                 44,895               (160,105)
------------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from sale of common stock                                                -                   -                   100,000
  Negative equity of deconsolidated subsidiary                                      -                   -                    43,093
  Proceeds from long-term debt and warrants                                      100,000              25,000                125,000
  Cash received upon distribution from United Network Technologies, Inc.            -                   -                   395,273
------------------------------------------------------------------------------------------------------------------------------------
          CASH PROVIDED BY FINANCING ACTIVITIES                                  100,000              25,000                663,366
------------------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                              (7,768)            (67,623)                32,964

Cash and cash equivalents at beginning of period                                 108,355             100,587                   -
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                     $ 100,587          $   32,964              $  32,964
====================================================================================================================================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

  Cash paid during the period for:
    Income taxes                                                               $   1,593          $     -                 $   4,273
====================================================================================================================================
    Interest                                                                   $    -             $   13,330              $  13,330
====================================================================================================================================

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:

  Net liabilities over assets upon distribution from United Network
    Technologies, Inc.                                                         $    -             $     -                 $   2,233
====================================================================================================================================
  Warrants issued with long-term debt                                          $  20,000          $    5,000              $  25,000
====================================================================================================================================
  Common stock issued for services                                             $    -             $    4,500              $   4,500
====================================================================================================================================
  Receipt of investment and treasury stock in settlement of prior obligation   $    -             $   23,500              $  23,500
====================================================================================================================================

                                                                                 See Notes to Financial Statements

                                                                                                               F-5
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                     UNITED NETWORK MARKETING SERVICES, INC.
                                                               (A DEVELOPMENT STAGE COMPANY)

                                                               NOTES TO FINANCIAL STATEMENTS
============================================================================================
<S>   <C>                       <C>
1.    FORMATION OF BUSINESS,    United Network Marketing Services, Inc. (a development stage
      PRINCIPAL BUSINESS        company) (the "Company" or "UNMS") was formed on September
      ACTIVITY AND SUMMARY OF   15, 1998 under the laws of the State of Delaware. The
      SIGNIFICANT ACCOUNTING    Company has been in the development stage since its
      POLICIES:                 inception.

                                Pursuant to the terms of a merger agreement between United
                                Network Technologies, Inc. ("UNTI") and Pan-Agra
                                International Corporation, UNTI incorporated and established
                                UNMS as a wholly owned subsidiary of UNTI. Prior to the
                                effective date of the merger, UNTI declared a dividend of
                                all of the shares of UNMS to the premerger shareholders. In
                                addition, on September 28, 1998, certain assets of UNTI,
                                mainly cash of approximately $395,000 and miscellaneous
                                other assets, including all of the outstanding shares of
                                TrueYou.com Inc. ("TY"), were distributed to the Company.
                                After the distribution, TY became a wholly owned subsidiary
                                of UNMS. On April 9, 1999, UNMS declared a dividend of all
                                of its shares of TY and distributed the shares to its
                                shareholders.

                                From September 29, 1998 through April 9, 1999, TY was a
                                wholly owned subsidiary of the Company and, accordingly, the
                                Company consolidated the accounts of TY for the period from
                                September 29, 1998 through December 31, 1998 and for the
                                three months ended March 31, 1999.

                                For the period ended December 31, 1998, losses amounting to
                                $27,355 were included in the statement of operations. Losses
                                amounting to $15,738 for the three months ended March 31,
                                1999 are included in the statement of operations for the
                                year ended December 31, 2000. The Company ceased
                                consolidating the accounts of TY on April 9, 1999, effective
                                as of March 31, 1999. The excess of liabilities over assets
                                (negative equity) was reported as a contribution to
                                additional paid-in capital effective April 9, 1999.

                                All intercompany accounts and transactions have been
                                eliminated in consolidation.

                                For purposes of the statement of cash flows, the Company
                                considers all highly liquid instruments purchased with an
                                original maturity of three months or less to be cash
                                equivalents.

                                Depreciation of property and equipment is provided for by
                                the straight-line method over the estimated useful lives of
                                the assets.

                                The Company maintains cash in bank deposit accounts which,
                                at times, may exceed federally insured limits. The Company
                                has not experienced any losses on these accounts.

                                The preparation of financial statements in conformity with
                                accounting principles generally accepted in the United
                                States of America requires the use of estimates by
                                management. Actual results could differ from these
                                estimates.

                                Investments are accounted for either by the cost method or
                                the equity method of accounting. The equity method of
                                accounting is used for investments where the Company has the
                                ability to exert significant influence but does not have the
                                ability to exercise control.

                                                                                          F-6
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                     UNITED NETWORK MARKETING SERVICES, INC.
                                                               (A DEVELOPMENT STAGE COMPANY)

                                                               NOTES TO FINANCIAL STATEMENTS
============================================================================================
<S>                                                                             <C>
                                The Company accounts for impairment of long-lived assets in
                                accordance with Statement of Financial Accounting Standards
                                ("SFAS") No. 121, ACCOUNTING FOR THE IMPAIRMENT OF
                                LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF.
                                The Company periodically evaluates the recoverability of its
                                long-lived assets for any possible impairment of value (see
                                Note 3).

                                The estimated fair value of the notes receivable and notes
                                payable approximates the carrying amount due to the
                                short-term nature of the instruments and rates available to
                                the Company for similar borrowings.

                                Management does not believe that any recently issued, but
                                not yet effective, accounting standards, if currently
                                adopted, would have a material effect on the accompanying
                                financial statements.

                                Basic earnings per share ("EPS") is computed as net earnings
                                divided by the weighted-average number of common shares
                                outstanding for the period. Diluted EPS reflects the
                                potential dilution that could occur from common shares
                                issuable through stock-based compensation including stock
                                options, restricted stock rewards, warrants and other
                                convertible securities. Potential common shares issuable as
                                disclosed in Notes 5 and 6 have not been included in the
                                computation of diluted EPS since the effect would be
                                antidilutive.

                                UNMS accounts for employee stock options in accordance with
                                Accounting Principles Board ("APB") Opinion No. 25,
                                ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. Under APB No. 25,
                                the Company applies the intrinsic value method of accounting
                                and therefore does not recognize compensation expense for
                                options granted, because the Company's policy is to grant
                                options only at a price equal to the market price on the day
                                of grant. SFAS No. 123, ACCOUNTING FOR STOCK-BASED
                                COMPENSATION, prescribes the recognition of compensation
                                expense based on the fair value of options as determined on
                                the grant date. However, SFAS No. 123 allows companies to
                                continue applying APB No. 25 if certain pro forma
                                disclosures are made assuming hypothetical fair value method
                                application.


2.    PROPERTY AND EQUIPMENT:   Property and equipment, at cost, consists of the following:

                                                                                  Estimated
                                                                2000      2001   Useful Life
                                ------------------------------------------------------------

                                Computer equipment             $7,694    $7,694    5 years
                                Furniture and fixtures          2,007     2,007    7 years
                                ------------------------------------------------------------

                                                                9,701     9,701
                                Less accumulated depreciation   6,883     8,897
                                ------------------------------------------------------------
                                                               $2,818    $  804
                                ============================================================

                                                                                        F-7
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                     UNITED NETWORK MARKETING SERVICES, INC.
                                                               (A DEVELOPMENT STAGE COMPANY)

                                                               NOTES TO FINANCIAL STATEMENTS
============================================================================================
<S>                                                                             <C>
3.    INVESTMENTS:              The Company's investments consist of a minority interest in
                                TY,a 50% interest in Access: NewAge Corp. ("ANA") and a 50%
                                interest in My Health Power ("MHP").

                                In July 1999, the Company purchased 100,000 shares of TY at
                                a cost of $150,000. The Company owned less than 3% of TY.
                                However, since the Company has the ability to exercise
                                significant influence over the management and operating
                                policies of TY through its majority stockholder, who also
                                has a significant interest in TY, this investment is being
                                accounted for by the equity method.

                                At December 31, 1999, the investment in TY consisted of an
                                equity in underlying assets of $23,522 and goodwill of
                                $117,047. Goodwill is being amortized by the straight-line
                                method over a period of three years. For the year ended
                                December 31, 1999, a loss of $9,431 was recorded which
                                represented equity in earnings of $13,979 and amortization
                                of goodwill of $23,410.

                                At December 31, 2000, the investment in TY consisted of an
                                equity interest of $25,000. For the year ended December 31,
                                2000, a loss of $115,569 was recorded which represented
                                amortization of goodwill of $46,819 and an impairment loss
                                of $68,750.

                                During February 2001, the Company sold its interest in TY
                                for $25,000 to an unrelated party. Accordingly, the Company
                                reflected its investment in TY at $25,000 at December 31,
                                2000 (as described above).

                                During September 2001, the Company received 90,000 shares of
                                common stock of TY, valued at $22,500 as part of a note
                                settlement (see Note 9).

                                For the year ended December 31, 2001, the Company recognized
                                a loss of $9,585, relating to the investment in TY. At
                                December 31, 2001, the investment in TY amounted to $12,915.

                                During 1999, the Company also purchased 50% of ANA at a cost
                                of $17,000. For the years ended December 31, 2000 and 2001,
                                the Company recognized its share of losses and income of
                                $(613) and $3,728, respectively. At December 31, 2001, the
                                investment in ANA amounted to $12,612.

                                During 1999, the Company also purchased 50% of MHP at a cost
                                of $30,000. In accordance with SFAS No. 121, this investment
                                was deemed worthless at December 31, 1999 and was written
                                down to $1, resulting in a noncash charge to operations of
                                $29,999.

                                During the year ended December 31, 2001, the Company sold
                                its investments in Minghua Group International (formerly Pan
                                Agra International Corporation) and realized a gain of
                                $38,096. This investment was acquired by the Company as part
                                of the distribution from UNTI (see Note 1).

                                                                                         F-8
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                           UNITED NETWORK MARKETING SERVICES, INC.
                                                                                     (A DEVELOPMENT STAGE COMPANY)

                                                                                     NOTES TO FINANCIAL STATEMENTS
======================================================================================================================
<S>                                                                             <C>

                              The following are condensed balance sheets and
                              statements of operations for TY and ANA, the
                              unconsolidated investees, at and for the years
                              ended December 31, 2000 and 2001:

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

                              Balance Sheets                      ANA            TY              ANA           TY
                              --------------
                              ----------------------------------------------------------------------------------------
                                                              (unaudited)    (unaudited)     (unaudited)   (unaudited)

                              Current Assets                  $   2,574     $   155,326       $ 29,877      $   62,663
                              Property and Equipment, net          -             25,575           -             14,529
                              Other Assets                         -            378,630           -            321,696

                              ----------------------------------------------------------------------------------------
                              Total Assets                    $   2,574     $   559,531       $ 29,877       $ 398,888
                              ========================================================================================

                              Liabilities                     $  23,853     $   183,307       $ 43,700       $ 535,598
                              Stockholders' Equity
                               (Deficiency)                     (21,279)        376,224        (13,823)       (136,710)
                              ----------------------------------------------------------------------------------------

                              Total Liabilities and Stock-
                               holders' Equity (Deficiency)   $   2,574    $    559,531       $ 29,877       $ 398,888
                              ========================================================================================

                              STATEMENTS OF OPERATIONS
                              -----------------------

                              Revenue                         $  34,272    $     89,429       $ 45,340       $  49,702
                              Expenses                           35,497       1,372,873         37,884         554,277

                              ----------------------------------------------------------------------------------------
                              Net income (loss)               $  (1,225)   $ (1,283,444)      $  7,456       $(504,575)
                              ========================================================================================


4.    NOTES RECEIVABLE:       The Company has a note receivable from ANA (see Note 3) in the amount of $8,000. The
                              note becomes due on May 15, 2002 and bears interest at the rate of 8% per annum, payable
                              semiannually.

                              The Company has various notes receivable from an officer of the Company amounting to
                              $18,200 at December 31, 2001. These notes are payable at various dates through September
                              2004 and bear interest at the rate of 12% per annum, payable annually.

                              Interest income amounted to $640 for each of the years ended December 31, 2000 and 2001.




5.    SHORT-TERM DEBT:        The Company has a note payable in the amount of $125,000 payable to related entities.
                              The notes bear interest at 11% and are due May 31, 2002. The Company also issued
                              warrants to purchase 1,250,000 shares of the Company's

                                                                                                                   F-9
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                        UNITED NETWORK MARKETING SERVICES, INC.
                                                                                  (A DEVELOPMENT STAGE COMPANY)

                                                                                  NOTES TO FINANCIAL STATEMENTS
================================================================================================================
<S>                                                                             <C>

                                common stock at $.10 per share in connection with these notes. The value
                                assigned to the warrants, amounting to $25,000, represents a debt discount and
                                is being amortized over the term of the notes. Interest expense for the year
                                ended December 31, 2001 amounted to approximately $13,000.


6.    STOCK OPTION PLAN:        In 2000, the Company adopted an incentive stock option plan (the "Plan") under
                                which options to purchase 500,000 shares of common stock may be granted to
                                certain key employees. The exercise price will be based on the fair market value
                                of such shares as determined by the board of directors at the date of the grant
                                of such options. On November 1, 2000, options to purchase 250,000 shares of
                                common stock at an exercise price of $.10 per share were granted to the
                                Company's president. Of the 250,000 shares, 70,000 shares vest on the date of
                                grant and the balance will vest 15,000 shares per month commencing December 1,
                                2000. As of November 1, 2001, all 250,000 shares are vested.

                                The Company has elected to apply APB Opinion No. 25 and related interpretations
                                in accounting for its stock options and has adopted the disclosure-only
                                provision of SFAS No. 123. Had the Company elected to recognize compensation
                                cost based on the fair value of the options granted on the grant date as
                                prescribed by SFAS No. 123, the Company's net loss would have increased by
                                approximately $1,700 and $3,300 for the years ended December 31, 2000 and 2001,
                                respectively.

                                The fair value of each option grant is estimated on the date of grant using the
                                Black-Scholes option-pricing model with the following weighted-average
                                assumptions used for the years ended December 31, 2000 and 2001, expected
                                volatility of .0%; risk free interest rate of 5.8%; expected option life of 5
                                years; and no expected dividends.


7.    INCOME TAXES:             The Company has a net operating loss carryforward of approximately $375,000 at
                                December 31, 2001 available to offset future taxable income expiring at various
                                dates through the year 2021.

                                The Company recorded a deferred income tax asset to reflect the effect of net
                                operating loss carryforwards and temporary differences aggregating approximately
                                $118,000. In recognition of the uncertainty regarding the ultimate amount of
                                income tax benefits to be derived, the Company has recorded a 100% valuation
                                allowance against this deferred income tax asset at December 31, 2001.

                                The provision (benefit) for income taxes differs from the amount computed using
                                the federal statutory rate of 34% as a result of the following:




                                Year ended December 31,                             2001                   2000
                                -------------------------------------------------------------------------------

                                Federal statutory rate                               (34)%                  (34)%
                                Increase in valuation allowance                       34                     34
                                -------------------------------------------------------------------------------
                                                                                       0%                     0%
                                ===============================================================================

                                                                                                           F-10
</TABLE>

<PAGE>

                                         UNITED NETWORK MARKETING SERVICES, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS
================================================================================

8.    RELATED PARTY           During the year ended December 31, 2000, the
      TRANSACTIONS:           Company was charged consulting fees amounting to
                              approximately $55,000 by an entity controlled by
                              the majority stockholder. At December 31, 2000,
                              the Company owed $20,000 which is included in
                              accounts payable and accrued expenses.

                              The Company has an informal agreement with TY in
                              which the Company reimburses TY for administrative
                              expenses it has incurred on the Company's behalf.
                              For the years ended December 31, 2000 and 2001,
                              the Company paid TY approximately $32,000 and
                              $10,000, respectively.

                              During the year ended December 31, 2001, the
                              Company issued 45,000 shares of common stock to
                              officers of ANA (see Note 3) for services rendered
                              valued at $.10 per share.


9.    RECOVERY OF BAD DEBT:   During September 2001, the Company received 10,000
                              shares of common stock of UNMS, valued at $.10 per
                              share, and 90,000 shares of common stock of TY
                              valued at $.25 per share in full satisfaction of a
                              note receivable in the amount of $30,000 from a
                              former consultant and officer of the Company. This
                              note was previously written off by the Company and
                              therefore this settlement was recorded as income
                              during the year ended December 31, 2001.


                                                                            F-11