U.S. SECURITIES AND EXCHANGE COMMISSION
	                        Washington, D.C.
	                         FORM 10-KSB
(Mark One)

[X]			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
				SECURITIES EXCHANGE ACT OF 1934 [Fee Required]

					For the fiscal year ended
                                July 31, 2001

[ ]			TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
			SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]

				For the transition period from to


				STEARMAN ENTERPRISES INC.
             ------------------------------------------------------
			(Name of small business issuer in its charter)

        Delaware                                     13-4082876
-----------------------------                 --------------------------
(State or other jurisdiction				(IRS Employer
of incorporation)					      Identification No.)

                           c/o Herbert Maxwell
               1501 Broadway, Suite 1807, New York, New York 10036
      -----------------------------------------------------------------
          (Address of principal executive office including zip code)

	                          (212) 768-2383
	                     ------------------------
	                    Issuer's telephone number

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

Securities registered under Section 12(g) of the Exchange Act:	Common
Stock, $.0001 par value per share

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

	Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [X]

	State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days.  (See definition of affiliate in Rule 12b-2 of the
Exchange Act.)  Not Applicable

	(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PAST FIVE YEARS)

	Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13, or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.
                                     Yes       No        N/A  X


	DOCUMENTS INCORPORATED BY REFERENCE

None


ITEMS 1 & 2.  DESCRIPTION OF THE BUSINESS AND THE COMPANY'S PROPERTIES

A.	The Company

	Stearman Enterprises, Inc. (the "Company") was organized under the
laws of the State of Delaware on March 13, 1992.  The Company was organized
for the purposes of creating a corporate vehicle to locate and acquire an
operating business entity which management believes is a suitable acquisition
candidate (a "Target Company").  The Company will not restrict its search to
any specific business, industry or geographical location.

The Company does not currently engage in any business activities that
provide any cash flow.  The costs of identifying, investigating, and
analyzing business combinations will be paid with money in the Company's
treasury or loaned by management.

Although the Company was under no obligation to do so, it has
voluntarily filed this registration statement because it believes that it
can better facilitate its business goals if it were a "reporting issuer"
under the Securities Exchange Act of 1934 (the "Exchange Act").

	PROPOSED BUSINESS

The Company will seek to locate an acquire a Target Company which is
the opinion of the Company's management (sometimes referred to as the
"Management") offers long term growth potential.  The Company will not
restrict its search to any specific business, industry or geographical
location.  The Company may seek to acquire a Target Company which has just
commenced operations, or which works to avail itself of the benefits of being
a "reporting issuer" in order to facilitate capital formation to expand into
new products or market.

There are certain perceived benefits to being a reporting company with a
class of publicly-traded securities.  These are commonly thought to include
the following:

*	the ability to use registered securities to make acquisitions of
assets
      or businesses;
*	increased visibility in the financial community;
*	the facilitation of borrowing from financial institutions;
*	improved trading efficiency;
*	shareholder liquidity;
*	greater ease in subsequently raising capital;
*	compensation of key employees through stock options;
*	enhanced corporate image;
*	a presence in the United States capital market.

A Target Company, if any, which may be interested in a business
combination with the Company may include the following:

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

There is no assurances that the Company will be able to effect an
acquisition of a Target Company.  In addition, at this time, no specifics
as to an acquisition or as to the nature of the Target Company can be
provided.

	RISK FACTORS

The Company's business is subject to numerous risk factors, including the
following:

Anticipated Change in Control and Management.   Upon the successful
completion of the acquisition of a Target Company, the Company anticipates
that it will have to issue to the Target Company or its shareholders some
authorized but unissued common stock which, when issued will comprise a
majority of the Company's then issued and outstanding shares of common stock.
Therefore, the Company anticipates that upon the closing of the acquisition
of a Target Company, the Company will no longer be controlled by the current
shareholders.  In addition, existing management and directors may resign.
The Company cannot give any assurance that the experience or qualifications
of new management, as it relates to either in the operation of the Company's
activities or in the operation of the business, assets or property being
acquired, will be adequate for such purposes.

Conflict of Interest - Management's Fiduciary Duties.  A conflict of
interest may arise between management's personal financial benefit and
management's fiduciary duty to you. The Company's sole director and officer
is or may become officers, directors, controlling shareholders and/or
partners of other entities engaged in a variety of businesses.  Mr. Maxwell
is engaged in other business activities.  Accordingly, the amount of time he
will devote to the Company's business will only be about five (5) to ten (10)
hours per month.  There exists potential conflicts of interest including
allocation of time between the Company and its representatives' other
business interests.

Experience of Management; Consultants.   Although management has
general business experience, it has limited experience in effecting
business combinations and may not have any significant experience in
acquiring or operating certain business interests that the company might
choose to acquire.  Management does not have, nor does it presently intend to
enter into, any contracts or agreements with any consultants or advisors with
respect to its proposed business activities.  Consequently, Management has
not established the criteria that will be used to hire independent
consultants regarding their experience, the services to be provided, the term
of service, etc., and no assurance can be made that the Company will be able
to obtain such assistance on acceptable terms.

Potential Future Rule 144 Sales.   Of the 100,000,000 shares of the
Company's Common Stock authorized, there are presently issued and
outstanding 1,623,000 shares $.0001 par value; of which 1,108,000 shares are
restricted securities as that term is defined under the Securities Act of
1933 (the "Securities Act"), and in the future may, subject to the foregoing
discussion, be sold in compliance with Rule 144 of the Securities Act, or
pursuant to a Registration Statement filed under the Act.  Rule 144 provides,
in essence, that a person holding restricted securities for a period of 1
year may sell those securities in unsolicited brokerage transactions of in
transactions with a market maker, in an amount equal to 1% of our outstanding
common stock every 3 months.  Additionally, Rule 144 requires that an issuer
of securities make available if the issuer satisfies the reporting
requirements of Sections 13 or 15(d) of the Exchange Act and of Rule 15c2-11
thereunder.  Rule 144 also permits, under certain circumstances, that sale of
shares by a person who is not an affiliate of ours and who has satisfied a 2
two year holding period without any quantity limitation and whether or not
there is adequate current public information available.  Investors should be
aware that sales under Rule 144, or pursuant to a registration statement
filed under the Securities Act, may have a depressive effect on the market
price of the Company's common stock in any market that may develop for such
shares.

	Pursuant to a letter dated January 21, 2000 from the United States
Securities and Exchange Commission (the "Commission") to NASD Regulation,
Inc. the Commission has taken the position that, both before and after a
business combination, the promoters or affiliates of blank check companies,
as well as their transferees, are underwriters of the securities issued and
accordingly such securities can only be resold pursuant to a Registration
Statement filed under the Securities Act. Accordingly the aforementioned
shares may not be sold in compliance of Rule 144.

Possible Issuance of Additional Shares.   The Company's Certificate of
Incorporation, authorizes the issuance of 100,000,000 shares of common
stock $.0001 par value.  The Company's Board of Directors has the power to
issue any or all of such additional shares without stockholder approval for
such consideration as it deems.  Management presently anticipates that it may
choose to issue a substantial amount of the Company's shares in connection
with the acquisition of a target business.

Risks of Leverage.   There are currently no limitations relating to the
Company's ability to borrow funds to increase the amount of capital
available to it to effect a business combination or otherwise finance the
operations of any Target Company.  The amount and nature of any borrowings by
the Company will depend on numerous factors, including the Company's capital
requirements, the Company's perceived ability to meet debt services on any
such borrowings, and then-prevailing conditions in the financial, if required
or otherwise sought, will be available on terms deemed to be commercially
acceptable and in the best interest of the Company's inability to borrow
funds required to effect or facilitate a business combination, or to provide
funds for an additional infusion of capital into a Target Company, may have a
material adverse affect on the Company's financial condition and future
prospects.

Additionally, to the extent that debt financing ultimately proves to be
available, any borrowings may subject the Company to various risks
traditionally associated with incurring of indebtedness, including:

*	if the Company's operating revenues after the acquisition were to be
insufficient to pay debt service, there would be a risk of default and
foreclosure on our assets.

*	if a loan agreement containing covenants is breached without a
waiver or renegotiation of the terms of that covenant, then the lender
could have the right to accelerate the payment of the indebtedness even if
the Company has made all principal and interest payments when due.

*	if the interest rate on a loan fluctuated or the loan was payable on
demand, the Company would bear the risk of variations in the interest rate
or demand for payment.

*	if the terms of a loan did not provide for amortization prior to
maturity of the full amount borrowed and the "balloon" payment could not be
refinanced at maturity on acceptable terms, we might be required to seek
additional financing and, to the extent that additional financing is not
available on acceptable terms, to liquidate the Company's assets.

Possible Need for Additional Financing.   The Company cannot ascertain
with any degree of certainty the capital requirements for a particular
Target Company inasmuch as the Company has not yet identified any acquisition
candidates. If the Target Company requires additional financing, such
additional financing (which, among other forms, could be derived from the
public or private offering of securities or from the acquisition of debt
through conventional bank financing), may not be available, due to, among
other things, the Target Company not having sufficient:

*	credit  or operating history;
*	income stream;
*	profit level;
*	asset base eligible to be collateralized; or
*	market for its securities.

Since no specific business has been targeted for acquisition, it is not
possible to predict the specific reasons why conventional private or public
financing or conventional bank financing might not become available.
Although there are no agreements between the Company and any of its officers
and/or directors pursuant to which we may borrow and such officers and/or
directors are obligated to lend the Company monies, there are no restrictions
on our right to borrow money from officers and directors.  No stockholder
approval is required in connection with any such loan.

Penny Stock Rules.    Under Rule 15g-9, a broker or dealer may not sell a
"penny stock" (as defined in Rule 3a51-1) to or effect the purchase of a
penny stock by any person unless:

(1)	such sale or purchase is exempt from Rule 15g-9; or

(2)	prior to the transaction the broker or dealer has (a) approved the
person's account for transaction in penny stocks in accordance with Rule
15g-9 and (b) received from the person a written agreement to the transaction
setting forth the identity and quantity of the penny stock to be purchased.

	The Commission adopted regulations that generally define a penny
stock to be any equity security other than a security excluded from such
definition by Rule 3a51-1.  Such exemptions include, but are not limited to
(a) an equity security issued by an issuer that has (i) net tangible assets
of at least $2,000,000, if such issuer has been in continuous operations for
at least three years; (ii) net tangible assets of at least $5,000,000, if
such issuer has been in continuous operation for less than three years; or
(iii) average revenue of at least $6,000,000 for the preceding three years;
(b) except for purposes of Section 7(b) of the Exchange Act and Rule 419, any
security that has a price of $5.00 or more; (c) and a security that is
authorized or approved for authorization upon notice of issuance for
quotation on the National Association of Securities ("NASD") Dealers
Automated Quotation System ("NASDAQ").

	It is likely that the Company's common stock will be subject to the
regulations on penny stocks; consequently, the market liquidity for our
common stock may be adversely affected by such regulations. This, in turn,
will affect shareholders ability to sell his shares following the completion
of an acquisition.

	There is no current trading market for shares (the "Shares") of the
Company's common stock and there can be no assurance that a trading market
will develop, or, if such a trading market does develop, that it will be
sustained.  The Shares, to the extent that a market develops for the Shares
at all, will likely appear in what is customarily known as the "pink sheets"
or on the NASD over-the-counter Bulletin Board (the "OTCBB"), which may limit
the marketability and liquidity of the Shares.

	To date, neither the Company nor anyone acting on behalf of the
Company has taken any affirmative steps to request or encourage any
broker/dealer to act as a market maker for our common stock.  The Company
has had no discussions or understandings, with any "market makers" regarding
the participation of any such market maker in the future trading market, if
any, in the Company's common stock. Management expects that discussions in
this area will ultimately be initiated by the management in office after
completion of the acquisition of a Target Company.

Risks Associated with Operations in Foreign Countries.   The Company's
business plan is to seek to acquire a Target Company.  Management's
discretion is unrestricted, and the Company may participate in any business
whatsoever that may in the opinion of Management meet the Company's business
objectives.  The Company may acquire a business outside the United States.
The Company has not limited the scope of its search to a particular region or
country.  Accordingly, if the Company acquires a business located, or
operating in a foreign jurisdiction, the Company's operations may be
adversely affected to the extent of the existence of unstable economic,
social and/or political conditions in such foreign regions and countries.

No Recent Operating History or Revenue and Minimal Assets.   The
Company has had no operating history nor any revenues or earnings from
operations since 1998.  The Company has no significant assets or financial
resources.  The Company will, in all likelihood, sustain operating expenses
without corresponding revenues, at least until the consummation of a
business combination.  This may result in the Company incurring a net
operating loss which will increase continuously until the Company can
consummate a business combination with a Target Company. There is no
assurance that the Company can identify such a Target Company and consummate
such a business combination.

Speculative Nature of the Company's Proposed Operations.   The success
of the Company's proposed plan of operation will depend to a great extent
on the operations, financial condition and management of the identified
Target Company.  While management will prefer business combinations with
entities having established operating histories, there can be no assurance
that the Company will be successful in locating candidates meeting such
criteria.  In the event the Company completes a business combination, of
which there can be no assurance, the success of the Company's operations will
be dependent upon management of the Target Company and numerous other factors
beyond the Company's control.

Scarcity of and Competition for Business Opportunities and Combinations.
The Company is and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of business entities.  A
large number of established and well-financed entities, including venture
capital firms, are active in mergers and acquisitions of companies
which may be merger or acquisition target candidates for the Company. Nearly
all such entities have significantly greater financial resources, technical
expertise and managerial capabilities than the Company and, consequently,
the Company will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination.
Moreover, the Company will also compete with numerous other small public
companies in seeking merger or acquisition candidates.

No Agreement for Acquisition of a Target Company Combination.   The
Company has no current arrangement, agreement or understanding with respect
to engaging in a merger with or acquisition of a specific business entity.
There can be no assurance that the Company will be successful in identifying
and evaluating suitable business opportunities or in concluding a business
combination.  Management has not identified any particular industry or
specific business within an industry for evaluation by the Company.  There is
no assurance that the Company will be able to negotiate a business
combination on terms favorable to the Company.  The Company has not
established a specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which it will require a Target
Company to have achieved, or without which the Company would not consider a
business combination with such business entity.  Accordingly, the Company may
enter into a business combination with a business entity having no
significant operating history, losses, limited or no potential for immediate
earnings, limited assets, negative net worth or other negative
characteristics.

Reporting Requirements May Delay or Preclude Acquisition.   Section 13
of the Exchange Act requires companies subject thereto to provide certain
information about significant acquisitions including certified financial
statements for the company acquired covering one or two years, depending on
the relative size of the acquisition.  The time and additional costs that may
be incurred by some target companies to prepare such financial statements may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company.  Acquisition prospects that do not
have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.

Lack of Market Research or Marketing Organization.   The Company has
neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by the
Company.  Even in the event demand exists for a merger or acquisition of the
type contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.

Lack of Diversification.   The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a
business combination with only one business entity.  Consequently, the
Company's activities will be limited to those engaged in by the business
entity which the Company merges with or acquires.  The Company's inability to
diversify its activities into a number of areas may subject the Company to
economic fluctuations within a particular business or industry and therefore
increase the risks associated with the Company's operations.

Regulation under Investment Company Act.  Although the Company will
be subject to regulation under the Exchange Act, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940, insofar as the Company will not be engaged in the business of investing
or trading in securities.  In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940.  In such event, the Company would
be required to register as an investment company and could be expected to
incur significant registration and compliance costs.  The Company has
obtained no formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act could subject the Company to material
adverse consequences.

Probable Change In Control and Management.   A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a Target Company obtaining a
controlling interest in the Company.  Any such business combination may
require shareholders of the Company to sell or transfer all or a portion of
the Company's common stock held by them.  The resulting change in control of
the Company will likely result in removal of the present officer and director
of the Company and a corresponding reduction in or elimination of his
participation in the future affairs of the Company.

Taxation.   Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions.  The Company intends to structure any business combination so
as to minimize the federal and state tax consequences to both the Company and
the Target Company; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets.  A non-qualifying
reorganization could result in the imposition of both federal and state taxes
which may have an adverse effect on both parties to the transaction.

 ITEM 3.  LEGAL PROCEEDINGS

	The Company is not party to any pending legal proceedings and is
not aware of any contemplated legal proceedings to which it may be a party
or of which any of its properties may be subject.

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

	During the last quarter of the fiscal year ended July 31, 2001 no
matter was submitted to the vote of the Company's security holders, through
resolutions of proxies or otherwise.


	PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDERS
MATTERS

	There is no trading market for the Company's Common Stock.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

	This Report includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act.  All statements other than statements of historical facts
included in this Report, including, without limitation, the statements under
"Management's Discussion and Analysis or Plan of Operation" regarding the
Company's prospects and the Company's financial position are forward-looking
statements.  Although the Company believes that the expectations are
reasonable and it can give no assurance that such expectations are reasonable
and it can give no assurance that such expectations will prove to have been
correct.  Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements") are
disclosed in this Report, including, without limitation, in conjunction with
the forward-looking statements included in this Report under "Risks
Associated with the Company's Business."  All subsequent written and oral
forward looking statements attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by the Cautionary
Statements.

Business Objectives

	The Company's business plan is to seek to acquire or merge with
potential businesses that may, in the opinion of Management, warrant the
Company's involvement.  Management's discretion is unrestricted, and the
Company may participate in any business whatsoever that may in the opinion of
Management meet the business objectives discussed herein.

	The Company recognizes that as a result of its limited financial,
managerial or other resources, the number of suitable potential businesses
that may be available to it will be extremely limited.  The Company's
principal business objective will be to seek long-term growth potential in
the business in which it participates rather than immediate, short-term
earnings.  In seeking to attain its business objectives, the Company will
not restrict its search to any particular industry.  Rather, the Company may
investigate businesses of essentially any kind or nature, including but not
limited to finance, high technology, manufacturing, service, research and
development, communications, insurance, brokerage, transportation, and
others.  Management may also seek to become involved with other development
stage companies or companies that could be categorized as "financially
troubled."  At the present time, the Company has not chosen the particular
area of business in which it proposes to engage and has not conducted any
market studies with respect to any business, property or industry.

	Businesses that seek the Company's participation in their operations
may desire to do so to avoid what such businesses deem to be adverse
factors related to undertaking a public offering.  Such factors include
substantial time requirements, market conditions, legal costs, conditions or
requirements imposed by Federal and state securities laws and possible loss
of voting control.  In making an investment in the Company, investors should
recognize that the terms of their purchase of the Company's securities may
ultimately prove to be less favorable than if such persons had invested in
the securities of a specific business that was undertaking its own public
offering.

Evaluation Criteria

	The analysis of potential business endeavors will be undertaken by
or under the supervision of Management, no member of which is a
professional business analyst.  Management is comprised of individuals of
varying business experiences, and Management will rely on its own business
judgment in formulating decisions as to the types of businesses that the
Company may acquire or in which the Company may participate.  It is quite
possible that Management will not have any business experience or expertise
in the type of business engaged in by the company ultimately acquired.
Management will seek to examine those factors described herein when making a
business decision; however, the mention of such factors to be examined by
Management with regard to its determining the potential of a business
endeavor should not be read as implying any experience or expertise on behalf
of Management as to the business chosen.  These factors are merely
illustrative of the types of factors that Management may consider in
evaluating a potential acquisition.

	Management anticipates that the selection of a Target Company will
be complex and risky because of the competition for such business
opportunities among all segments of the financial community.  The nature of
the Company's search for the acquisition of a Target Company requires maximum
flexibility inasmuch as the Company will be required to consider various
factors and divergent circumstances which may preclude meaningful direct
comparison among the various business enterprises, products or services
investigated.  Investors should recognize that the possible lack of
diversification in relation to the Company's acquisition may not permit the
Company to offset potential losses from one venture against profits from
another.  This should be considered a negative factor affecting any decision
to purchase the Shares.  Management of the Company will have virtually
unrestricted flexibility in identifying and selecting a prospective Target
Company.  Management may consider, among other factors in evaluating a
prospective Target Company and determining the "fair market value"
thereof, the following:

	*	the Target Company' net worth;

	*	the Target Company' total assets;

	*	the Target Company' cash flow;

	*	costs associated with effecting the Business Combination;

	*	equity interest in and possible management participation in the
            Target Company;

	*	earnings and financial condition of the Target Company;

	*	growth potential of the Target Company and the industry in
            which it operates;

	*	experience and skill of management and availability of
            additional personnel of the Target Company;

	*	capital requirements of the Target Company;

	*	competitive position of the Target Company;

	*	stage of development of the product, process or service of the
            Target Company;

	*	degree of current or potential market acceptance of the
            product, process or service of the Target Company;

	*	possible proprietary features and possible other protection of
            the product, process or service of the Target Company; and

	*	regulatory environment of the industry in which the Target
            Company operates.

	The foregoing criteria is not intended to be exhaustive or obligatory
any evaluation relating to the merits of a particular Business Combination
will be based, to the extent relevant, on the above factors as well as other
considerations deemed relevant by management in connection with effecting a
Business Combination consistent with the Company's business objectives.

	It is anticipated that locating and investigating specific business
proposals could take a considerable amount of time.   The time and costs
required to select and evaluate a Target Company candidate (including
conducting a due diligence review) and to structure and consummate the
Business Combination (including negotiating relevant agreements and preparing
requisite documents for filing pursuant to applicable securities laws and
state corporate laws) cannot presently be ascertained with any degree of
certainty.

	The Company anticipates that it will make contact with business
prospects primarily through the efforts of its officers, who will meet
personally with existing management and key personnel, visit and inspect
material facilities, assets, products and services belonging to such
prospects, and undertake such further reasonable investigation as Management
deems appropriate, to the extent of its limited financial resources.  The
Company anticipates that certain Target Company candidates may be brought to
its attention from various unaffiliated sources, including securities
broker/dealers, investment bankers, venture capitalists, bankers, other
members of the financial community, and affiliated sources.  While the
Company does not presently anticipate engaging the services of professional
firms that specialize in business acquisitions on any formal basis, the
Company may engage such firms in the future, in which event the Company may
pay a finder's fee or other compensation.

	To date, the Company has not selected any particular industry or
any Target Company in which to concentrate its Business Combination
efforts.

Daily Operations

	The Company expects to use attorneys and accountants as necessary,
and does not anticipate a need to engage any full-time employees so long as
it is seeking and evaluating business opportunities.  The need for employees
and their availability will be addressed in connection with the decision
whether or not to acquire or participate in a specific Business Acquisition.

	Until an active business is commenced or acquired the Company will
have no employees or day- to-day operations.  The Company is unable to make
any estimate as to the future number of employees which may be necessary, if
any, to work for the Company.  If an existing business is acquired it is
possible that its existing staff would be hired by the Company.  At the
present time it is the intention of Management to meet or be in telephone
contact at least once a week and more frequently if needed to review business
opportunities, evaluate potential acquisitions and otherwise operate the
affairs of the Company.  Except for reimbursement of reasonable expenses
incurred on behalf of the Company, Management will not be compensated for
these services rendered on behalf of the Company.

Office Facilities

	The Company will maintain its business address at1501 Broadway,
Suite 1807, New York, New York 10036. Pursuant to an oral agreement, which
agreement may be terminated by either party on 30 days prior written
notice, the Company will use these offices on a rent free basis until such
time as it consummates a Business Combination

ITEM 7.  FINANCIAL STATEMENTS

Index											Page

Independent Auditor's Report							F-1

Balance Sheet as of July 31, 2001						F-2

Statements of Loss for the Years
Ended July 31, 1997, July 31, 1998,
July 31, 1999, July 31, 2000 and July 31, 2001.				F-3

Statements of Cash Flows for the Years Ended
July 31, 1997, July 31, 1998,
July 31, 1999, July 31, 2000 and July 31, 2001.				F-4

Statements of Changes in Stockholders' Equity (Deficit)
for the Years Ended July 31, 1997, July 31, 1998,                 F-5
July 31, 1999, July 31, 2000 and July 31, 2001.

Notes to Financial Statements							F-6

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

	Not Applicable

	PART III

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

Directors and Executive Officers

		Set forth below is the name of each of the directors and
officers of the Company, all positions and offices with the Company held,
the period during which such person has never served as such, and the
business experience during at least the last five years:

   Name				Age		Positions and Offices Held

   Herbert Maxwell		78		President and Director
(Since August 1999)

	There are no agreements or understandings for the officer or
director to resign at the request of another person and the above-named
officer and director is not acting on behalf of nor will act at the direction
of any other person.

	Herbert Maxwell became sole officer and director of the Company
on August 1, 1999.  Mr. Maxwell has been an independent businessman for the
past five years and has been a consultant for troubled companies and a
principal in investment groups for the past two decades. Mr. Maxwell has also
served as a director and officer (and was a principal stockholder) of four
publicly held companies, which although not engaged in blank check offerings
nevertheless consummated acquisitions of the type described in this
Prospectus.  These include:

	(1)	Zachary Ventures, Inc. was organized in December, 1993.  It
conducted an offering pursuant to Rule 419 which offering was concluded in
March, 1994.  Zachary Ventures, Inc. did not effect a Business Combination
pursuant to Rule 419 and in June, 1996 returned the deposited proceeds to
the investors as required by such Rule. Zachary Ventures has been dissolved
and is no longer in business.

	(2)	C.S. Primo Corp. was organized in 1986 initially as an
inactive publicly held corporation pursuing a business acquisition.  Mr.
Maxwell became a principal stockholder and a director of C.S. Primo Corp. on
or about June 3, 1988.  On or about March 4, 1991, C.S. Primo Corp. acquired
approximately 98% of the issued and outstanding common stock of Dynasty
World Express, Inc. in exchange for approximately 90% of C.S. Primo Corp.'s
common stock; since then, C.S. Primo Corp. has changed its name to Phoenix
Information Systems Corp. and its common stock trades on the over-the-counter
market.  Mr. Maxwell served as a director from June, 1988 to March, 1991.

	(3)	Lewis Resources, Inc. was organized in 1987, initially through
a stock dividend distribution, as an inactive publicly held corporation
pursuing a business acquisition.  Mr. Maxwell was one of the initial
stockholders and directors of Lewis Resources, Inc.  On September 28, 1993,
Lewis Resources, Inc. acquired from Lema Investments Ltd. all of the
outstanding shares of Gallium Arsenide Industries Ltd., a development stage
Israeli company.  Since then, Lewis Resources, Inc. has changed its name to
Israel Semiconductor Corporation and its common stock trades on the over-the-
counter market. Mr. Maxwell served as a director from its formation through
September, 1993.

	(4)	Lewison Enterprises Inc. was organized in 1988 initially,
through a stock dividend distribution, as an inactive publicly held
corporation pursuing a business acquisition.  Mr. Maxwell was one of the
initial stockholders and directors of Lewison Enterprises Inc.  In July, 1993
the Lewison Enterprises Inc. issued 8,000,000 shares of common stock to the
stockholders of Omega Development Corp. ("Omega") in exchange for all
of the issued and outstanding shares of common stock of Omega.  Since then,
Lewison Enterprises Inc. has changed its name to Omega Development, Inc.
To date, no trading market has developed for shares of its common stock.  Mr.
Maxwell has been a director since its formation.

Except for Omega Development, Inc., Mr. Maxwell is no longer a
principal stockholder, director or officer of any of the foregoing
corporations.  Except as set forth above, Mr. Maxwell does not presently
serve as a director of any public company.  He is an active investor and
writes a newsletter on the New York theater industry.

ITEM 10.  EXECUTIVE COMPENSATION

	No officer or director presently receives a salary.  Except as
described herein it is not anticipated that any director or officer will
receive any fee or salary pending consummation of a Business Combination.
However, directors and/or officers will receive expense reimbursement for
expenses reasonably incurred on behalf of the Company.

	In addition, Mr. Maxwell as a stockholder of the Company or his
affiliates may receive personal financial gain, by: (i) payment of
consulting fees, (ii) sales of affiliates' stock, and (iii) payments of
salaries.  See "Risks Associated with the Company's Business."  However, no
finders fees will be paid to an officer, director or principal stockholder or
their affiliates by virtue of their initiation of, or the identification of a
Target Company with which a Business Combination is consummated.

Conflicts of Interest.

	The Company's sole officer and director expects to organize other
companies of a similar nature and with a similar purpose as the Company.
Consequently, there are potential inherent conflicts of interest in acting
as an officer and director of the Company.  Insofar as the director is
engaged in other business activities, he will devote only a minor amount
of time to the Company's affairs.  The Company does not have a right of
first refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's proposed business
operations.

	A conflict may arise in the event that another blank check and/or
blind pool company (a "blind pool company") with which management is
affiliated is formed and actively seeks a Target Company.  It is anticipated
that target companies will be located for the Company and other blind pool
companies in chronological order of the date of formation of such blind pool
companies or by lot.  However, any blank check companies that may be formed
may differ from the Company in certain items such as place of incorporation,
number of shares and shareholders, working capital, types of authorized
securities, or other items.  It may be that a Target Company may be more
suitable for or may prefer a certain blind pool company formed after the
Company.  In such case, a business combination might be negotiated on behalf
of the more suitable or preferred blind pool company regardless of date of
formation or choice by lot.  Mr. Maxwell will be responsible for seeking,
evaluating, negotiating and consummating a business combination with a Target
Company which may result in terms providing benefits to Mr. Maxwell.

      The Company may agree to pay finder's fees, as appropriate and
allowed, to unaffiliated persons who may bring a Target Company to the
Company where that reference results in a business combination.  No finder's
fee of any kind will be paid by the Company to management or promoters of the
Company or to their affiliates.  No loans of any type have, or will be, made
by the Company to management or promoters of the Company or to any of their
associates or affiliates.

	Management has not adopted policies involving possible conflicts of
interest.

	There are no binding guidelines or procedures for resolving
potential conflicts of interest. Failure by Management to resolve conflicts
of interest in favor of the Company could result in liability of Management
to the Company.  However, any attempt by shareholders to enforce a liability
of Management to the Company would most likely be prohibitively expensive and
time consuming.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of July 31, 2001 and as adjusted
to reflect the sale of the Shares by: (i) each person who is known by the
Company to own beneficially more than five percent (5%) of the Company's
outstanding common stock, (ii) each of the Company's officers and directors,
and (iii) all directors and officers of the Company as a group.

NAME AND ADDRESS OF 			SHARES OF 			APPROXIMATE
BENEFICIAL 					COMMON 			PERCENTAGE
OWNER 					STOCK 			OWNED
						BENEFICIALLY
						OWNED



Herbert Maxwell				15,000			*
1501 Broadway, Suite 1807
New York, New York 10036


Joseph Sierchio				554,000			34%
150 East 58th Street, 25th Floor
New York, New York 10155


Stephen Albert				554,000			34%
2635 Merrick Avenue
Merrick, New York 11566


Michael Seifert				126,000			7.8%
4480 Ross Crescent
West Vancouver, BC V7W 1B2
Canada


Colin Watt					126,000			7.8%
570 Foss Drive
Port Moody, BC Canada


David Patterson				124,000			7.6%
4340 Ross Crescent
West Vancouver, BC Canada


Officers and Directors as a Group 	15,000			*
(1 person)


*less than 1%


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

	None

ITEM 13.  EXHIBITS AND REPORTS ON 8K

	(a) Exhibits

		None

	(b) Reports on Form 8-K

		No reports on Form 8-K were filed during the last quarter of
the period covered by this report.

	SIGNATURE

		In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this Annual Report on Form 10-KSB to be signed on its
behalf by the undersigned, thereunto duly authorized.



	STEARMAN ENTERPRISES LTD


	(Registrant)

Dated: November 5, 2001					By:  /s/ Herbert Maxwell
								--------------------------
								Herbert Maxwell, President
<PAGE>
F-1

                                  Russell & Co.


AUDITORS' REPORT TO THE DIRECTORS OF:
STEARMAN ENTERPRISES LTD.
(A Delaware Corporation)
(A development stage company)

We have audited the balance sheet of Stearman Enterprises Ltd. as at July
31, 2001, and July 31, 2000 and the statements of loss and shareholders'
equity (deficit) and cash flows for the years ended July 31,2001, July 31,
2000, July 31, 1999, July 31, 1998 and July 31, 1997. These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform an audit to
obtain reasonable assurance 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.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at July 31, 2001 and
July 31, 2000 and the results of its operations and its cash flows for the
years ended July 31, 2001, July 31, 2000, July 31, 1999, July 31, 1998 and
July 31, 1997 in accordance with accounting principles generally accepted in
the United States.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 1 to
the financial statements, the Company's negative working capital and deficit
raises substantial doubt about its ability to continue as a going concern.
The financial statements do not contain any adjustments that might result
from the outcome of this uncertainty.

Chartered Accountant
West Vancouver, B.C.
Canada.
October 31, 2001
415 Gordon Ave., West Vancouver, B.C., V7T 1P4
Telephone: (604) 913-0405 - Fax: (604) 913-0406





<PAGE>
F-2

                          STEARMAN ENTERPRISES LTD.
                          (A Delaware Corporation)
                        (A development stage company)

                                  Balance Sheet
 			  as at July 31, 2001 and July 31, 2000
                                (U.S. DOLLARS)

							       2001			2000

Assets

Current assets
Cash and bank					$      300		$     300
							       300		      300

Incorporation costs					  403		      403
Total Assets					$       703		$     703

Liabilities

Current liabilities
Accounts payable					$     2,912		$  2,412
Accrued interest					          6	             6


Total Liabilities				           	2,918		   2,418

Shareholders' equity (deficit)

Share Capital
Authorized:
100,000,000 common shares with a par value of $.0001each
Issued and outstanding
1,623,000 common shares with a par value of $0.0001
at July 31, 2001 and at July 31, 2000	      1,104		      550

							      1,104		      550

 Accumulated Deficit					(3,319)	  (2,819)

							      (2,215)	  (1,715)
							$        703	$     703


                         CONTINUING OPERATIONS (NOTE 1)

<PAGE>
F-3

                            STEARMAN ENTERPRISES LTD.
                           (A Delaware Corporation)
                          (A development stage company)

                             Statement of Loss
                         For the year ended July 31, 2001,
              and years ended July 31, 2000, July 31, 1999, July 31, 1998,
                             July 31, 1997
                              (U.S. DOLLARS)




	                       2001     2000     1999      1998      1997




Expenses
Legal and audit	          $500     $2,055    $-        $-        $500
Interest and bank charges      -          5     25        2           5
     Filing fees	          $  -          -     204       -           -

Net earnings (loss)
for the period	          $(500)   $(2,060)  $(229)    $(25)     $(505)

Basic and diluted loss
per share	              $(0.0003)$(0.0015) $(0.0005) $(0.1000) $(2.0200)

Weighted average shares
Outstanding                1,623,000  1,392,293  500,411     250      250



<PAGE>
F-4

                          STEARMAN ENTERPRISES LTD.
                         (A Delaware Corporation)
                         (A development stage company)

                           Statement of Cash Flow
 				For the year ended July 31, 2001,
           and years ended July 31, 2000, July 31, 1999, July 31, 1998
                             and July 31, 1997
 				   (U.S. DOLLARS)


	                           2001    2000    1999    1998    1997

Cash provided by (used in)

Operations
Net Loss for period 		  $(500)  $(2,060) $(229)  $(25)   $(505)

  Net change in non-cash working
  capital balances 	         (500)   (2,060)  (229)   (25)    (505)


  Accounts payable	           500    2,055    204     -        -
  Accrued interest	             - 	 (49)     25     25       5
  Convertible Debenture	             -	(500)     -       -     500

Net cash used in operating
activities                           -	(554)     -       -       -

Financing
Issuance of capital stock	       -	 554     300      -       -

Net cash generated
by financing activities	             -   	 554     300      -       -

Change in cash for period	       -      -      300      -       -

Cash, beginning of period	     300     300      -       -       -


Cash, end of period 	        $300    $  300   $ 300   $   -   $  -





<PAGE>
F-5

                                STEARMAN ENTERPRISES LTD.
                                 (A Delaware Corporation)
                               (A development stage company)

                       Statement of Shareholders' Equity (Deficit)
                                Year ended July 30, 2001,
             and years ended July 31, 2000, July31, 1999, July 31,1998,
                               and July 31, 1997
                                (U.S. DOLLARS)


	     			Common shares	    	Total Accumulated
									Shareholders'
				Shares	Amount	(Deficit)	Equity

(Deficit)

Balance July 31, 1996	250		$250 		        -		$250

Net loss	              -		   -	           (505)	      (505)

Balance at July 31, 1997 250	       250             (505)	      (255)

Net loss		       -	        -	            (25)	       (25)

Balance at July 31, 1998 250		250	           (530)	      (280)

Stock split		    499,750		 -		        -		   -

Private placement	     15,000		300	              -		 300

Net loss	             -		 -		     (229) 	      (229)


Balance at July 31, 1999 515,000	550	           (759)	      (209)

Conversion of debenture	  1,108,000	554	              -	       554

Net loss	                 -	 -	         (2,060)      (2,060)

Balance at July 31, 2000  1,623,000 1,104	         (2,819)	    (1,715)

Net loss	                 -          -         (500)        (500)

Balance at July 31, 2001  1,623,000 $1,104      $(3,319)     $(2,215)

<PAGE>
F-6

                             STEARMAN ENTERPRISES LTD.
                             (A Delaware Corporation)
                         (A development stage company)

                         Notes to Financial Statements
                          Year ended July 31, 2001
                                (U.S. DOLLARS)

1.	Continuing operations

Stearman Enterprises Ltd. was incorporated on March 13, 1992 in the
state of Delaware, U.S.A.

The Company has negative working capital and a deficit.  The ability for
the Company to continue as a going concern is dependent upon its ability to
obtain adequate financing to reach profitable levels of operations.  It is
not possible to predict whether financing efforts will be successful or if
the Company will attain profitable levels of operations.

2.	Summary of significant accounting policies

These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States and reflect the
following significant accounting principles:

a.	Estimates and assumptions

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

b.	Earnings (loss) per common share

In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share (SFAS 128), which established new
standards for computing and presenting earnings per share effective for
fiscal years ending after December 15, 1997.  With SFAS 128, primary earnings
per share is replaced by basic earnings per share, which is computed by
dividing income available to common shareholders by the weighted average
number of shares outstanding for the period.  In addition, SFAS 128 requires
the presentation of diluted earnings per share, which includes the potential
dilution that could occur if dilutive securities were exercised or converted
into common stock.  The computation of diluted EPS does not assume the
conversion or exercise of securities if their effect is anti-dilutive.
Common equivalent shares consist of the common shares issuable upon the
conversion of the convertible loan notes and special warrants (using the if-
converted method) and incremental shares issuable upon the exercise of stock
options and share purchase warrants (using the treasury stock method).

c.	Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, deposits in banks and
highly liquid investments with an original maturity of three months or
less.

3.	Convertible debenture

On May 13, 1997 the Company issued a 5% Convertible Debenture in the
amount of $500 U.S. due May 13, 2002 in partial settlement of outstanding
legal fees. The debenture principle bears interest at 5% per annum and the
accrued interest and the principle shall be convertible, in part or in whole
on the basis of 1 share for every $1.00 U.S. ($0.0005 post forward split) of
debt, at the holder's option by giving the Company a Notice of Conversion
within 75 days prior to the conversion date.  The Convertible debenture was
converted on October 15, 1999.

	4.	Share Capital

a.	On May 4, 1999, the Company amended its certificate of
incorporation by subdividing the authorized capital stock of the
corporation so that each share shall be subdivided into two thousand shares.
The certificate of incorporation was further amended by increasing the
authorized capital stock of the corporation by 18,000,000 with a par value of
$0.01 each.

b.	On October 20, 1999, the Company amended its certificate of
incorporation by increasing its authorized capital stock to 100,000,000
shares of common stock and changing the par value of its common shares to
$0.0001 par value per share.

c.	On October 15, 1999, the Company issued 1,108,000 common shares
on the conversion of the debt and accrued interest of $54 at 1 share for
every $0.0005 U.S. of debt

5.	Related party transactions

a.	At July 31, 2001, members of Maitland & Company, Canadian legal
counsel owned 125,000 shares of the Company's common stock.

b.	At July 31, 2001, members of the Company's U.S. legal counsel
owned 1,108,000 shares of the Company's common stock.

6.	Income taxes

The Company has net operating losses, which may give rise to future tax
benefits of approximately  $500, $2,060, $229, $25 and $505 as of July
31,2001, July 31, 2000, July 31, 1999, July 31, 1998 and July 31, 1997
respectively.  To the extent not used, net operating loss carry forwards
expire in varying amounts beginning in the year 2012.  Income taxes are
accounted for in accordance with Statement of Financial Accounting Standards
No.109 (SFAS 109).  Under this method, deferred income taxes are determined
based on differences between the tax basis of assets and liabilities and
their financial reporting amounts at each year end, and are measured based on
enacted tax rates and laws that will be in effect when the differences are
expected to reverse.  Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be realized.  No
provision for income taxes is included in the statement due to its immaterial
amount.