UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

QUARTERLY  REPORT UNDER  SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
              1934 FOR THE QUARTERLY PERIOD ENDED November 30, 2001


                         Commission File Number 0-26673


                            FORESTINDUSTRY.COM, INC.
             (Exact name of Registrant as specified in its charter)



          DELAWARE                                     98-0207081
(State of other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                    Identification Number)

       10-2480 Kenworth Road
       Nanaimo, British Columbia                        V9T 3Y3
(Address of Principal Executive Offices)               (Zip Code)

Registrant's telephone number including area code:      (250) 758-0665



Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the preceding 12 months (or for such shorter period that the issuer was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days:

         YES    X                 NO


Common stock, $.0001 par value,  1,621,058 issued and outstanding as of November
30, 2001.


<PAGE>2

                                      INDEX

                                                                            PAGE

PART I - FINANCIAL INFORMATION

     ITEM 1.  Financial Statements (Unaudited).................................3

     ITEM 2.  Management's Discussion and Analysis............................13


PART II - OTHER INFORMATION

     ITEM 1.  Legal Proceedings...............................................15

     ITEM 2.  Changes in Securities...........................................15

     ITEM 3.  Defaults upon Senior Securities.................................15

     ITEM 4.  Submission of Matters to a Vote of Security Holders.............15

     ITEM 5.  Other Information...............................................16

     ITEM 6.  Exhibits and Reports on Form 8-K................................16

<PAGE>3

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                            forestindustry.com, Inc.
                                 and Subsidiary

                      Condensed Consolidated Balance Sheet
                                   (unaudited)

                                                          (in U.S. Dollars)

                                                          November 30, 2001
                                                          -----------------
ASSETS

Current:
  Cash and cash equivalents                                    $     10,564
  Accounts receivable (Net allowance for
    doubtful accounts - $3,815)                                      47,237
  Work in process                                                     3,179
  Prepaid expenses and deposits                                         135
                                                               ------------
Total current assets                                                 61,115

Property and equipment  (Note 3)                                     59,981
                                                               ------------
                                                               $    121,096
                                                               ============
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current:
  Accounts payable and accrued liabilities                     $    334,084
  Unearned revenues                                                  51,711
  Promissory notes payable                                           60,401
                                                               ------------
Total current liabilities                                      $    446,196
                                                               ------------
Stockholders' deficit:
  Share capital (Note 4)
  Common stock - $0.0001 par value
    30,000,000 authorized; issued and outstanding:
    1,621,058 (May 31, 2001- 1,521,058)                                 162
  Preferred stock -$0.0001 par value
    5,000,000 authorized; issued and outstanding - Nil                    -
  Additional paid in capital                                      1,231,784
  Cumulative translation adjustment                                  14,716
   Deficit                                                       (1,571,762)
                                                               ------------
Total stockholders' deficit                                        (325,100)
                                                               ------------
                                                               $    121,096
                                                               ============
Commitments (Note 6)

<PAGE>4

                     forestindustry.com, Inc. and Subsidiary

                 Condensed Consolidated Statements of Operations
                                   (unaudited)
               For the Six Months Ended November 30, 2001 and 2000

                                                         (in U.S. Dollars)

                                                     2001             2000
                                                 -----------      -----------
REVENUE
   Sales                                         $   165,581      $   205,195
                                                 -----------      -----------
EXPENSES
   Depreciation                                       43,940           66,471
   Consulting fees                                   122,203           28,076
   General and administrative                        206,428          707,719
   Professional fees                                  36,205           65,683
                                                 -----------      -----------
                                                     408,776          867,949
                                                 -----------      -----------
NET LOSS FOR THE PERIOD                              243,195          662,754
Deficit, beginning of period                       1,328,567          586,646
                                                 -----------      -----------
DEFICIT, END OF PERIOD                           $ 1,571,762      $ 1,249,400
                                                 ===========      ===========
BASIC AND DILUTED LOSS PER SHARE                      $(0.15)          $(0.49)
                                                 -----------      -----------
WEIGHTED AVERAGE NUMBER OF SHARES                  1,571,058      $ 1,355,638
                                                 ===========      ===========

<PAGE>5

                     forestindustry.com, Inc. and Subsidiary

                 Condensed Consolidated Statements of Cash Flows
                                   (unaudited)
               For the Six Months Ended November 30, 2001 and 2000


                                                           (in U.S. Dollars)

                                                          2001         2000
                                                      ----------    ----------
OPERATING ACTIVITIES:
  Net loss for the period                             $ (243,195)   $ (662,754)
  Adjustments to reconcile net loss to net cash
    used in operating activities -
      Depreciation                                        43,940        66,471
      Shares issued for service rendered                       -       212,500
  Changes in operating assets and liabilities -
      Accounts receivable                                  5,689        28,543
      Work in Process                                      5,358         4,660
      Prepaid expenses and deposits                            6        (1,334)
      Accounts payable and accrued liabilities           112,827        33,762
      Unearned revenues                                   (2,013)       (8,339)
                                                      ----------    ----------
Cash flows (used in) operating activities                (77,388)     (326,491)
                                                      ----------    ----------
INVESTING ACTIVITY:
  Sale (Acquisition) of capital assets                         -       (47,407)
                                                      ----------    ----------
FINANCING ACTIVITIES:
  Promissory notes payable                                60,401             -
  Net proceeds from issuance of preferred stock                -       200,000
                                                      ----------    ----------
Cash flows provided by financing activities               60,401       200,000
                                                      ----------    ----------

Net decrease in cash and cash equivalents                (16,987)     (173,898)

Cash and cash equivalents, beginning of period            27,551       196,963
                                                      ----------    ----------
Cash and cash equivalents, end of period              $   10,564    $   23,065
                                                      ==========    ==========

<PAGE>6

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS

forestindustry.com,  Inc. (the "Company") was incorporated in Delaware,  U.S.A.,
on December 18, 1997,  under the name of Autoeye Inc. On February 25, 2000,  the
Company changed its name to forestindustry.com, Inc. Prior to its acquisition of
The Forest  Industry  Online  Inc.  ("Forest")  (note  2(a)),  the  Company  was
inactive.

The  Company's  current  business  activities  include  designing  web sites and
operating and maintaining a computer internet web site for companies  associated
with the forest and wood product industries.

These  consolidated  financial  statements have been prepared on a going concern
basis in accordance with United States generally accepted accounting principles.
The going  concern  basis of  presentation  assumes the Company will continue in
operation for the foreseeable  future and will be able to realize its assets and
discharge  its  liabilities  and  commitments  in the normal course of business.
Certain  conditions,  discussed below,  currently exist which raise  substantial
doubt upon the validity of this  assumption.  The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

Through  November  30,  2001,  the  Company  has  not  been  profitable  and has
experienced  negative cash flows from operations.  Operations have been financed
through  the  issuance of stocks and other  external  financing.  The  Company's
future operations are dependent upon continued external funding,  its ability to
increase  revenues  and  reduce  expenses,  and  the  success  of  its  proposed
development of an online  business  exchange  auction website for the forest and
wood industries. There are no assurances that the above conditions will occur.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

a)   Reverse Takeover and Basis of Presentation

On January 31,  2000,  the Company  acquired  all of the issued and  outstanding
shares of Forest by issuing to Forest's stockholders  1,000,000 shares of common
stock and control of the Company.  The acquisition  was a reverse  takeover with
Forest being the deemed accounting  acquiror for financial  statement  purposes.
The  acquisition  has been  accounted for as a capital  transaction  effectively
representing   an  issue  of   stocks   by   Forest   for  the  net   assets  of
forestindustry.com, Inc.

The Company's  historical  financial  statements reflect the financial position,
results  of  operations   and  cash  flows  of  Forest  from  the  date  of  its
incorporation  on  January 9, 1997,  under the laws of the  Province  of British
Columbia, Canada. The historical stockholders' equity gives effect to the shares
issued  to  the   stockholders   of  Forest.   The  results  of   operations  of
forestindustry.com, Inc. are included only from the date of acquisition, January
31, 2000.

<PAGE>7

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

b)   Basis of Consolidation

These consolidated  financial statements include the accounts of the Company and
its  wholly-owned  subsidiary,  The Forest  Industry Online Inc. All significant
intercompany  balances and transactions have been eliminated in the consolidated
financial statements.

c)   Work in Process

Work  in  process  is  recorded  at  the  lower  of  cost,  determined  using  a
percentage-of-completion  method based on the contract price, and net realizable
value.

d)   Property and Equipment and Depreciation

Property  and  equipment  are  recorded  at cost and are  depreciated  using the
straight-line  method over their estimated useful lives ranging from five to ten
years, or their lease terms.

e)   Cash and Equivalents

The  Company  considers  all  short-term  investments  with a  maturity  date at
purchase of three months or less to be cash equivalents.

f)   Revenue Recognition and Unearned Revenues

Revenues on  advertising  fees and hosting  revenues  are recorded on the billed
basis.  Customers are invoiced on a quarterly  basis in advance for  advertising
and hosting spaces.  Unearned  revenues relate to the period of the billing that
has not yet transpired and therefore not earned.

Revenues   on  fixed   contract   website   designs   are   recognized   on  the
percentage-of-completion method of accounting.

g)   Use of Estimates

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

<PAGE>8

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


Note 2 - Significant Accounting Policies (continued)

h)   Net Earnings (Loss) Per Share

Basic earnings (loss) per share is computed using the weighted average number of
common stock outstanding during the periods.  Diluted loss per share is computed
using the weighted  average  number of common and  potentially  dilutive  common
stock  outstanding  during the period.  As the Company has losses in the periods
presented, basic and diluted loss per share are the same.

i)   Stock-Based Compensation

The Company accounts for its stock-based  compensation arrangement in accordance
with provisions of Accounting Principles Board (APB) Opinion No. 25, "Accounting
for  Stock  Issued  to  Employees",   and  related  interpretations.   As  such,
compensation  expense  under  fixed plans would be recorded on the date of grant
only if the fair value of the underlying stock at the date of grant exceeded the
exercise price. The Company recognizes  compensation  expense for stock options,
common stock and other equity  instruments  issued to non-employees for services
received based upon the fair value of the services or equity instruments issued,
whichever is more reliably  determined.  This  information  is presented in note
4(c).

Statement of Financial  Accounting  Standards  (SFAS) No. 123,  "Accounting  for
Stock  Based  Compensation",  requires  entities  that  continue  to  apply  the
provision of APB Opinion No. 25 for  transactions  with employees to provide pro
forma net income and pro forma earnings per share disclosures for employee stock
option  grants made in 1995 and future years as if the  fair-value-based  method
defined in SFAS No. 123 had been applied to these transactions.

j)   Income Taxes

The Company  follows the asset and  liability  method of  accounting  for income
taxes. Under this method,  current taxes are recognized for the estimated income
taxes payable for the current period.

Deferred income taxes are provided based on the estimated  future tax effects of
temporary differences between financial statement carrying amounts of assets and
liabilities and their  respective tax bases as well as the benefit of losses and
tax credits available to be carried forward to future years for tax purposes.

Deferred tax assets and  liabilities  are measured  using enacted tax rates that
are  expected to apply to taxable  income in the years in which those  temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets and  liabilities  of a change in tax rates is recognized in operations in
the period that includes the substantive  enactment date. A valuation  allowance
is recorded  for  deferred  tax assets when it is more likely than not that such
deferred tax assets will not be realized.

<PAGE>9

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001

Note 2 - Significant Accounting Policies (continued)

k)   Foreign Currency Translation

The  functional  currency of the Company is the United States dollar and for its
Canadian subsidiary the Canadian dollar.  Transactions in foreign currencies are
translated  to United States  dollars at the rates in effect on the  transaction
date.  Exchange  gains or losses arising on translation or settlement of foreign
currency denominated  monetary items are included in the consolidated  statement
of operations.

l)   Impairment of Long-Lived Assets

The  recoverability of the excess of cost over fair value of net assets acquired
is  evaluated  by an analysis of operating  results and  consideration  of other
significant  events or  changes  in the  business  environment.  If the  Company
believes an impairment exists, the carrying amount of these assets is reduced to
fair  value as  defined  in SFAS No.  121,  "Accounting  for the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to be Disposed of."

NOTE 3 - PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>

                                                Accumulated              Net Book Value
                                       Cost    Depreciation     November 30,      November 30,
                                                                        2001              2000
                                          $               $                $                 $
                             --------------   -------------  ---------------   ---------------
<S>                               <C>              <C>              <C>               <C>
 Computer Equipment                 126,818          83,087           43,731            73,192
 Furniture and Fixtures              33,362          20,800           12,562            30,018
 Software                            19,464          18,331            1,133               559
 Leasehold                            6,432           3,967            2,465               398
 Improvements
                             --------------   -------------  ---------------   ---------------
                                    186,077         126,186           59,891           104,167
                             ==============   =============  ===============   ===============
</TABLE>

NOTE 4 - STOCKHOLDERS' EQUITY

a)   Preferred Stock

On January 31, 2000, the Company  issued through a private  placement 750 shares
of  Series  "A"  convertible  preferred  stock at a price of $1,000  per  share.
Holders of Series "A" preferred stocks were entitled to a distribution of $1,000
per share  prior to any  distribution  to the  holders of the  Company's  common
stocks in the event of any liquidation or dissolution of the Company.

<PAGE>10

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


Note 4 - Stockholders' Equity (continued)


The Series "A"  preferred  stock was  convertible,  at the option of the holder,
into common  stock at 75% of the last ten day  average  closing bid price of the
Company  subject to a maximum  conversion rate of 500 shares of common stock for
one  share of  preferred  stock and a  minimum  conversion  rate of 25 shares of
common  stock for one share of  preferred  stock.  In  addition,  all series "A"
preferred stock was deemed to convert into common stock on or before January 31,
2001, the first anniversary date.

On May 10, 2000,  the Company  issued  24,922  shares of its common stock on the
conversion of 375 shares of Series "A" convertible preferred stock.

On June 12, 2000, and January 31, 2001, the Company issued, respectively, 21,714
and 87,698 shares of its common stock on the conversion of 175 and 200 shares of
Series "A" convertible preferred stock.

On November 1, 2000, the Company  issued through a private  placement 200 shares
of  Series  "B"  convertible  preferred  stock at a price of $1,000  per  share.
Holders of Series "B" preferred stocks were entitled to a distribution of $1,000
per share  prior to any  distribution  to the  holders of the  Company's  common
stocks in the event of any liquidation or dissolution of the Company.

The Series "B"  preferred  stock was  convertible,  at the option of the holder,
into common  stock at 70% of the last five day average  closing bid price of the
Company  subject to a maximum  conversion rate of 500 shares of common stock for
one  share of  preferred  stock and a  minimum  conversion  rate of 25 shares of
common stock for one share of preferred stock.

On March 13, 2001,  the Company issued 100,000 shares of its common stock on the
conversion of the 200 shares of Series "B" convertible preferred stock.

b)   Stock Options

In February  2000,  the Company  adopted a fixed stock option plan that provides
for the  issuance of  incentive  and  non-qualified  stock  options to officers,
directors,  employees  and  non-employees  to acquire up to 25,000 shares of the
Company's  common  stock.  The plan was  amended  in June 2000 to  increase  the
allowable number of stock options to be issued under this plan to 50,000 shares.
The Board of Directors  determines the terms of the options  granted,  including
the number of options granted, the exercise price and the vesting schedule.  The
exercise price for qualified  incentive stock options is not to be less than the
fair  market  value of the  underlying  stock at the date of grant,  and to have
terms no longer than ten years from the date of grant. There was no stock option
plan prior to February 2000.

<PAGE>11

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001



Note 4 - Stockholders' Equity (continued)

Issued to Employees

On February 29, 2000, the Company  granted  options to purchase a total of 2,900
shares of the Company's  common stock at a price of $4.00 per share to employees
of the  Company.  The options vest on or after  February  29,  2001,  and expire
between  February and April 2005.  During fiscal year 2001,  1,200 stock options
were forfeited as employees left the Company. During fiscal year 2002, 700 stock
options were forfeited as employees left the Company.

On June 11,  2000,  the  Company  granted  options to  purchase a total of 5,400
shares of the Company's  common stock at a price of $2.00 per share to employees
of the  Company.  The options  vest on or after June 11, 2001 and expire on June
11,  2005.  During  fiscal year 2001,  4,200 stock  options  were  forfeited  as
employees  left the Company.  During  fiscal year 2002,  650 stock  options were
forfeited as employees left the Company.

On December 18, 2000, the Company  granted  options to purchase a total of 4,500
shares of the Company's  common stock at a price of $0.60 per share to employees
of the  Company.  The options vest on or after  January 31, 2001,  and expire on
December 15, 2005.  During fiscal year 2001, 500 stock options were forfeited as
employees  left the Company.  During fiscal year 2002,  2,500 stock options were
forfeited as employees left the Company.

As  discussed  in Note 2(i),  the Company  continues to account for its employee
stock-based  awards using the intrinsic  value method in accordance with APB No.
25, "Accounting for Stock Issued to Employees", and its related interpretations.
Accordingly,  no  compensation  expense  has been  recognized  in the  financial
statements  for employee  stock  arrangements,  because the fair value of common
stock at the measurement date is not greater than the option exercise price.

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123, and has been  determined  as if the Company had  accounted for its
employee stock options under the fair value method of that  statement.  The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions:  risk-free
interest rate of 6%;  dividend yield of 0%;  volatility  factors of the expected
market price of the Company's stock of 529%; and an expected life of the options
of 2.5 years.  Accordingly,  compensation  expense  using the fair value  method
would have been $457.50, amortized over their respective vesting period.

<PAGE>12

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


Note 4 - Stockholders' Equity (continued)

b)   Stock Options (continued)

Issued to Employees (continued)

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

The Statement's pro forma information from the options is as follows:

                                                  Six Months        Six Months
                                                       Ended             Ended
                                                November 30,      November 30,
                                                        2001              2000
                                                           $                 $

 Net (loss) as reported                             (243,195)         (662,754)
 Compensation expense from stock options
   under SFAS No. 123                                   (458)          (11,275)
                                               -------------    --------------
 Pro forma net (loss)                               (243,653)         (674,029)
                                               =============    ==============
 Pro forma (loss) per common share,
    Basic and Diluted                                 (0.15)            (0.50)
                                               =============    ==============

Issued to Non-Employees

On May 26, 2000, the Company granted options to purchase a total of 4,000 shares
of the Company's  common stock at a price of $2.00 per share to non-employees of
the Company.  The options vest on May 1, 2001, and expire on May 1, 2005.  Stock
options  issued  to  non-employees  are  accounted  for in  accordance  with the
provisions of SFAS No. 123, "Accounting for Stock Based Compensation", using the
fair value method.  Accordingly,  compensation  expense  relating to these stock
options in the amount of $17,253 was  recorded  in year 2000 as  deferred  stock
compensation to be amortized over their respective vesting period.

<PAGE>13

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001



NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED)

b)       Stock Options (continued)

Issued to Non-Employees (continued)

During  fiscal year 2001,  $17,253 was  charged as  compensation  expense in the
statement of operations.

Additional Stock Option Plan Information

A summary status of the Company's fixed stock option plan and changes during the
period ended November 30, 2001, are as follows:

                                                   Number of           Weighted
                                                      Shares            Average
                                                                 Exercise Price
                                                                              $

  Outstanding, November 1, 1999                           -                   -
    Granted                                           7,300                2.90
    Forfeited                                          (400)               4.00
                                                  ---------         -----------
  Outstanding, May 31, 2000                           6,900                2.84

    Granted                                           9,900                1.36
    Forfeited                                        (5,900)               2.29
                                                  ---------         -----------
  Outstanding, May 31, 2001                           10,900               1.80

    Granted                                                -                  0
    Forfeited                                        (3,850)               1.45
                                                  ---------         -----------
  Outstanding, November 30, 2001                      7,050                1.99
                                                  =========         ===========
  Options exercisable at end of
     November30, 2001                                 7,050                1.99
                                                  =========         ===========

<PAGE>14


                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


Note 4 - Stockholders' Equity (continued)

b)   Stock Options (continued)

Additional Stock Option Plan Information (continued)

The following  table  summarizes  information  about the  Company's  fixed stock
options outstanding at November 30, 2001:

                                                       Options Outstanding
                                                       -------------------
                                 Number           Weighted           Weighted
  Range of                  Outstanding            Average            Average
  Exercise Prices                    at          Remaining           Exercise
  $                        November 30,        Contractual              Price
                                   2001               Life                  $
                                                (in years)
                           ------------        -----------        -----------
  4.00 - 4.00                     1,000                  4               4.00
  2.00 - 2.00                     4,550                  4               2.00
  0.60 - 0.60                     1,500                  4               0.60
                           ------------        -----------        -----------
                                  7,050                  4               1.99
                           ============        ===========        ===========

The options  outstanding at November 30, 2001, will expire between  February and
December 2005.

c)   Stock-Based Compensation

In January  2000,  the Company  issued 3,750 shares of common stock to a company
controlled by the Company's former  president in exchange for services  relating
to the  acquisition  of Forest.  The fair value of these  services was estimated
based upon the estimated  fair value of the shares at $2.50 per share or $9,375.
The costs  were  deducted  from the  additional  paid-in  capital  from the said
acquisition.

In February 2000, the Company recorded non-cash  compensation expense of $87,500
relating to the issuance of 35,000 shares of common stock to certain consultants
to the Company. The fair value of the shares was estimated at $2.50 per share at
the time of the transaction.

In June 2000, the Company recorded non - cash  compensation  expense of $160,000
relating to the issuance of 20,000  shares of common stock for  advertising  and
marketing  services.  The fair value of the shares  was  estimated  at $8.00 per
share at the time of the transaction.

In August 2001,  the Company  issued 100,000 shares of common stock to a company
in settlement of outstanding debt in the amount of $52,042 (CDN$75,000).

As  discussed  in Note 2(i),  the Company  recognizes  compensation  expense for
equity  instruments issued to non-employees for services received based upon the
fair value of the  services  or equity  instruments  issued,  whichever  is more
reliably determined.

<PAGE>15

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


Note 4 - Stockholders' Equity (continued)

d)   Retirement of Common Stocks

By way of a stock  retirement  agreement  dated May 11, 2000,  and for a nominal
amount of $1.00, a former principal  shareholder of the Company returned 259,724
shares of common stock to the Company for cancellation.  The shareholder  agreed
that in order for the Company to attract  future  financing,  the Company should
reduce its issued and outstanding  share capital of its common stock through the
surrender and retirement of these shares.

In January  2001,  a consultant  returned  5,000 shares of common stock upon his
resignation  from the Company.  The Company  recorded a non - cash  compensation
recovery of $12,500 being the value of the shares at the time they were issued.

e)   Stock Split

The Company  consolidated  its share  capital on June 1, 2001, by way of a share
consolidation  on the  basis of one new  common  stock  for each ten old  common
stocks.  All share and per share  information have been adjusted for all periods
presented to reflect the reverse stock split.

f)   Stock Option Split

The Company  consolidated its existing stock option plan on June 1, 2001, by way
of a reverse  stock  option  split on the basis of one new stock option for each
ten old stock options.  All stock option  information have been adjusted for all
periods  presented to reflect the reverse stock option split. The exercise price
was not changed with the stock option consolidation.

Note 5 - INCOME TAXES

Deferred tax assets and liabilities

                                                          November 30,
                                                                  2001
                                                                     $
Deferred tax assets:
  Operating loss carryforward                                  572,000
Book depreciation in excess of tax depreciation                 19,000
                                                          ------------
Total deferred tax assets before valuation allowance           591,000
Valuation allowance                                           (591,000)
                                                          ------------
Net deferred tax assets                                              -
                                                          ============

<PAGE>16

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001



Note 5 - INCOME TAXES

Deferred tax assets and liabilities (continued)

Management  believes  that it is more  likely  than not that it will not  create
sufficient  taxable income  sufficient to realize its deferred tax assets. It is
reasonably  possible these  estimates  could change due to future income and the
timing and manner of the reversal of deferred tax liabilities.

The Company has no income tax expense due to its operating losses.

The Company has Canadian  operating loss  carryforwards  for Canadian income tax
purposes at May 31, 2001,  of  approximately  $845,000 (CDN  $1,300,000).  These
operating losses begin to expire in fiscal year 2004.

Note 6 - Commitments

a)   The Company has entered into an  employment  contract with the President of
     the Company for management and administrative services for an annual salary
     of $45,000 (CDN $70,000).  The  employment  contract term is to January 31,
     2003.  The Company  may  terminate  the  agreement  on ninety days  written
     notice.

b)   The  Company  has  entered   into  an   agreement   to  lease  an  internet
     telecommunication  line to December 31, 2002.  The monthly lease payment is
     $959.

c)   The  Company  has  entered  into  three  consulting  agreements  with three
     consultants  to provide  management,  administration,  sales and production
     services  for total  monthly  fees of  $7,368.  The  contract  terms are to
     February 1, 2003.  The Company may terminate  each agreement on thirty days
     written  notice.  As of November 30, 2001, the Company and two  consultants
     mutually agreed to terminate their consulting  agreements.  The Company has
     one agreement in force for management  and production  services for a total
     monthly fee of $2,287.

d)   In  July  2001,  the  Company,  Teaco  Properties,  the  Company's  largest
     shareholder,  Sean  Curran and Joe  Nemeth  entered  into a stock  purchase
     agreement.   Under  the  terms  of  the  stock  purchase  agreement,  Teaco
     Properties  sold 900,000  shares in the aggregate of the  Company's  common
     stock that it owned to each  Messrs.  Curran  and  Nemeth for the  purchase
     price of $10.  Marc White and Dave  McNaught are the  beneficial  owners of
     Teaco  Properties Ltd. Prior to the  transaction,  Teaco  Properties  owned
     1,000,000 shares in the aggregate.  As a result of this  transaction  Teaco
     Properties  currently  owns 100,000 (6%),  Curran owns 600,000,  and Nemeth
     owns  300,000,  which  represents  approximately  38.4%  and  19.2%  of the
     outstanding  shares.  In  connection  with the  stock  purchase  agreement,
     Messrs.  Curran  and  Nemeth  were  appointed  to the  Company's  Board  of
     Directors.

<PAGE>17

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001


Note 6 - Commitments (continued)

     In addition,  as an  inducement  to the sale,  the Company  granted each to
     Messrs.  White and McNaught two year  warrants to purchase  110,000  shares
     (220,000 shares in the aggregate) of common stock.

e)   On July 13,  2001,  the  Company  entered  into a loan  agreement  with two
     individuals (the "lenders"), who were thereafter appointed directors of the
     Company.  Pursuant to the terms of the loan  agreement,  the  lenders  have
     agreed to lend to the  Company  an amount up to a maximum of  $65,000.  The
     loan,  secured  by a  general  security  agreement  over the  assets of the
     Company,  bears  interest rate at 10% per annum and is repayable in full by
     December 31, 2001.

     The Company received amounts totalling $41,000 (CDN$63,000) to November 30,
     2001.

f)   In August 2001, the Company entered into a Debt Settlement Agreement with a
     Creditor.  The agreement settles  approximately  $100,402  (CDN$155,710) in
     debt through the payment in cash of $48,360  (CDN$75,000)  and the issuance
     of 100,000 shares of our common stock in full settlement of the debt.

g)   On September 27, 2001, the Company  accepted two promissory  notes from two
     individual  lenders in the  amounts of $3,179  and  $9,537  (CDN$5,000  and
     $15,000).  Both promissory  notes are payable in full on or before December
     31, 2001, and bear twenty percent interest per annum, compounded annually.

h)   On  October 4,  2001,  the  Company  accepted  a  promissory  note from one
     individual lender for the sum of $4,451 (CDN$7,000). The promissory note is
     payable on or before December 31, 2001, and bears a twenty percent interest
     rate per annum, compounded annually.

i)   On  October 9,  2001,  the  Company  accepted  a  promissory  note from one
     individual lender for the sum of $3,179 (CDN$5,000). The promissory note is
     payable on or before  December 31, 2001, and bears twenty percent  interest
     rate per annum, compounded annually.

Note 7 - RELATED PARTY TRANSACTION

                                                                  Six Months
                                                                       Ended
                                                                November 30,
                                                                        2001
                                                                           $

Wages paid to the President of the Company for  management,
administration and supervision services                               22,253

<PAGE>18

                     forestindustry.com, Inc. and Subsidiary

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)
                   For the Six Months Ended November 30, 2001



Note 8 - Financial Instruments

Financial instruments include cash and equivalents, accounts receivable, and
accounts payable and accrued liabilities and promissory notes payable. The
estimated fair value of such financial instruments approximates their carrying
value.

<PAGE>19


Item 2.  Management's Discussion and Analysis

This discussion, other than the historical financial information, may consist of
forward-looking  statements  that  involve  risks and  uncertainties,  including
quarterly and yearly  fluctuations  in results,  the timely  availability of new
communication products, the impact of competitive products and services, and the
other  risks  and   uncertainties,   including  those  relating  to  the  recent
acquisition of a new line of business  described  below.  These  forward-looking
statements  speak  only as of the date  hereof  and  should  not be given  undue
reliance. Actual results may vary significantly from those projected.

The  Company was formed on  December  18,  1997,  under the name  Autoeye,  Inc.
Autoeye Inc., was formed to acquire Autoeye Inc., an Alberta  corporation,  that
developed and proposed to manufacture  its existing  design for a  multi-vehicle
surveillance  system to  monitor  large  vehicle  lots such as car  dealerships,
fleets and storage lots.  The proposed  acquisition  of Autoeye Inc., an Alberta
corporation,  was terminated in February 1998. Thereafter Autoeye's business was
to  evaluate  businesses  for  possible  acquisition.  On January 31,  2000,  we
acquired 100% of The Forest Industry Online, Inc. Following the transaction, the
shareholders of The Forest Industry  Online,  Inc. owned a majority of Autoeye's
outstanding  shares  of  common  stock.  Accordingly,  for  financial  reporting
purposes the  transaction  was accounted for as a reverse  acquisition  with The
Forest Industry Online, Inc. considered the accounting acquirer. (See Notes 2(a)
and 3 to the May 31, 2000,  consolidated  financial  statements).  As such,  The
Forest Industry Online,  Inc.'s historical financial statements are now reported
as the Company's financial statements. On February 25, 2000, the Company changed
its name from Autoeye, Inc. to forestindustry.com, Inc. Prior to the acquisition
of The Forest Industry  Online,  Inc., the Company had not generated any revenue
and had not commenced any operations other than initial corporate  formation and
capitalization.

Overview

The Company is an  internet  service  provider  to the forest and wood  products
industry. The Company's website includes information and advertising relating to
forest and logging;  wood  processing  and logs;  and lumber and wood  products.
During the six months ended  November 30, 2001,  the Company  expanded its sales
and marketing  efforts through the  establishment  of an agency program and call
center,  however,  it was  forced to  terminate  the  program  due to  financial
constraints.  The  Company may  re-establish  the  programs  in the future.  The
Company  intends to  establish  a  business-to-business  exchange to support the
purchase and sale of wood, wood products and wood related services.  The Company
also  plans  on  designing   web-based  training  and  compliance  programs  and
establishing a market information  service.  The Company's strategy is to become
an  internet  leader in  supporting  an  e-focused  marketplace  for the  highly
fragmented global forest industry.

For the Six Months ended November 30, 2001 and November 30, 2000

Revenues.  Revenues  decreased  by 20% to  $165,581  for  the six  months  ended
November  30,  2001,  as compared to sales of $205,195  for the six months ended
November 30, 2000.  Sales decreased due to higher drop offs to our  subscription
based web  services and fewer new  customers  for our web design  services.  The
customer base decreased to approximately 433 customers and 431 associate members
(non-paying) by November 30, 2001, as compared to approximately 1200 at November
30, 2000.  $106,188 or 64% of revenues  were  derived  from website  advertising
while the remaining $59,393 or 36% of revenues were derived from web site design
and custom  applications.  In contrast,  47% of revenues,  or $97,180 in the six
months ended November 30, 2000,  were derived from website  advertising  and the
balance,  $108,015  or 53% were  derived  from web site  design.  The decline in

<PAGE>20

revenues from web site design and  contracting  services is  attributable to the
reduction  in sales  staff by the  company  in the nine  months  preceding  this
period.

Expenses.  Total expenses for the six months ended November 30, 2001,  decreased
to $408,776 as compared to $867,949 for the  comparative  period ended  November
30, 2000. Expenses decreased due to the company's efforts over the previous nine
months to decrease operating costs. Selling, general and administrative expenses
represented  the largest  portion of expenses  totaling  $206,428 as compared to
$707,719  for  the  comparable  period  in  2000.  This  decrease  is due to the
reduction in sales and administration staff and termination of office leases and
other commitments. Consulting and professional fees were $122,203 for the period
ended  November 30, 2001,  compared to $28,076 for the six months ended November
30, 2000. The Company's  professional  fees increased due compliance with public
reporting  requirements,  costs  associated  with  our  annual  meeting  and the
addition of five management contracts. Professional fees also included legal and
accounting  fees  relating  to  the  preparation  of a  registration  statement,
including  amendments,  and audited financial statements for the year ending May
31, 2001.

Net and Comprehensive Loss. The Company recorded a net loss of $243,195 for the
six months ended November 30, 2001, compared to a net loss of $662,754 for the
six months ended November 30, 2000. The decrease in losses for the period ended
November 30, 2001, is due to the significant decrease in operating,
administrative and professional expenses through out the nine months preceding
this period.

Liquidity and Capital Resources

The Company is in a growth  stage in which  expenses are expected to increase as
the Company  implements its business  plan. The Company has not been  profitable
and has experienced  negative cash flows from  operations.  Due to the fact that
the Company has not generated  sufficient cash flow to fund all of its operating
costs, the Company has relied heavily on outside sources of capital.  During the
year ended May 31, 2000,  the Company  raised  $750,000  through the sale of its
Series A Convertible  Preferred  Stock.  During the year ended May 31, 2001, the
Company  also  raised  $200,000  through  the sale of its  Series B  Convertible
Preferred  Stock.  During the six months ended  November  30, 2001,  the Company
raised a total of  $60,401  through  promissory  notes from  various  individual
lenders.  The  promissory  notes are payable in full on or before  December  31,
2001,  and bear  twenty  per cent  interest  per  annum.  The  Company's  future
operations are dependent upon continued external funding from additional capital
investments or borrowed funds.  The Company's future success will also depend on
its ability to increase revenues and to reduce expenses and establish its online
business exchange auction website for the forest and wood industries.  There can
be no  assurance  that the  Company  will be able to raise  capital  from  these
outside sources in sufficient amounts to fund the Company's business  operations
or to successfully  expand its online  business.  The failure to secure adequate
outside  funding or establish the forest and wood industry  auction website will
have an adverse affect on the Company's operating results.

The Company did not invest in property or equipment  during the six months ended
November 30, 2001. The Company expects capital  expenditures will be required in
the future to upgrade and expand its  technical  infrastructure  as its customer
base increases.

To date,  the Company has not  invested in  derivative  securities  or any other
financial instruments that involve a high level of complexity or risk.

As  of  November  30,  2001,  the  Company  had  negative   working  capital  of
approximately $385,081. The Company anticipates obtaining the additional capital
which it will require through revenues from operations and through a combination

<PAGE>21

of debt and equity  financing.  The Company will also consider joint ventures or
strategic  alliances to develop future programs.  There is no assurance that the
Company will be able to obtain capital it will need or that the estimates of its
capital requirements will prove to be accurate.

In order to reduce our  expenses,  we laid off nine of our employees in November
2001,  and  ended  the  engagement  of 11  independent  contractors.  We plan on
building our  operations  and re-hiring our employees  once revenues  exceed our
operating costs.

<PAGE>22

                                     PART II

                                Other Information

Items 1, 3, 4 and 5

None.

Item 2. Changes in Securities and Use of Proceeds

     In August 2001, the Company settled approximately  $100,402 in debt through
the  payment of cash of $48,360  and the  issuance  of 100,000  shares of common
stock. The Company relied on Regulation S as an exemption from registration.  No
commission was paid in connection with the issuance.

Item 6. Exhibits and Reports on Form 8-K

None.

<PAGE>23

                                   SIGNATURES


     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                           forestindustry.com, Inc.



Date:   January 15, 2002                   /S/JOE PERRATON
                                           --------------------------------
                                           Joe Perraton, President
                                           (Principal Financial and Accounting
                                           Officer)