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

                                   FORM 10-KSB

(Mark One)

[X]      Annual  Report  Pursuant  to  Section  13 or  15(d)  of The  Securities
         Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 2001

[ ]      Transition  Report  Pursuant  to Section 13 or 15(d) of The  Securities
         Exchange Act of 1934

                        Commission File Number: 000-31199

                        CALYPSO FINANCIAL SERVICES, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

           Delaware                                           87-0638338
-------------------------------                           -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)

            56 West 400 South, Suite #220, Salt Lake City, Utah 84101
               (Address of principal executive offices) (Zip Code)

Issuer's telephone no.:  (801) 322-3401

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

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

         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 [ ] No
[X]

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the best of the  Registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         State the issuer's revenues for its most recent fiscal year.  $ -0-

         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 ask prices of such stock as of a specified date within 60
days. $ -0-

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

                                            Outstanding as of December 31, 2001
         Class                                       and July 31, 2004
-----------------------                     ------------------------------------
Common Stock, Par Value                                 1,500,000
   $.00001 par value

                       DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents Incorporated by Reference" is contained in Part III,
Item 14.


Transitional Small Business Disclosure Format.   Yes [ ]   No [X]


<PAGE>

<TABLE>
<CAPTION>

                        CALYPSO FINANCIAL SERVICES, INC.

                                TABLE OF CONTENTS

                                                                                      Page
                                                                                      ----
                                                      PART I

<S>               <C>                                                                  <C>
Item 1.           Description of Business .........................................     3

Item 2.           Description of Property..........................................     9

Item 3.           Legal Proceedings................................................     9

Item 4.           Submission of Matter to a Vote of Security Holders...............     9

                                                      PART II

Item 5.           Market for Common Equity and Related Stockholder Matters.........    10

Item 6.           Management's Discussion and Analysis or Plan of Operation........    13

Item 7.           Financial Statements.............................................    16

Item 8.           Changes in and Disagreements with Accountants on Accounting
                    and Financial Disclosure.......................................    16

Item 8A.          Controls and Procedures..........................................    16

                                                     PART III

Item 9.           Directors, Executive Officers, Promoters and Control Persons;
                     Compliance with Section 16(a) of the Exchange Act.............    17

Item 10.          Executive Compensation...........................................    20
Item 11.          Security Ownership of Certain Beneficial Owners and Management...    21

Item 12.          Certain Relationships and Related Transactions...................    21

Item 13.          Exhibits and Reports on Form 8-K.................................    22

Item 14.          Principal Accountant Fees and Services...........................    22

                  Signatures.......................................................    24
</TABLE>
                                       -2-

<PAGE>
                                     PART I

Item 1.       Description of Business

     This  report  is  being  filed  subsequent  to the date at which it was due
pursuant  to  applicable  provisions  of the  Securities  Exchange  Act of 1934.
Accordingly,  disclosures  set forth  herein may reflect  not only  information,
events and circumstances  for the period covered by this report,  but also up to
the date on which this report is being filed.

Business Development

     History

     Calypso  Financial  Services,  Inc. was incorporated on July 27, 1999 under
the laws of the State of Delaware, for the purpose of actively seeking potential
operating businesses and/or business  opportunities,  with the intent to acquire
or merge with such  businesses.  Following its  organization,  Calypso  issued a
total of 1.5 million shares of its common stock.

     On November 17, 1999,  we filed a  registration  statement  with the SEC on
Form SB-2 under the Securities  Act of 1933, for the purpose of registering  for
resale  the 1.5  million  shares  of our  common  stock  then  outstanding.  The
registration  statement  was  subsequently  withdrawn  and, on July 31, 2000, we
filed a registration  statement on Form 10-SB under the Securities  Exchange Act
of 1934. The registration statement became effective automatically 60 days after
filing with the SEC.

     Current Business Activities

     Since our inception,  we have engaged in only sporadic business  operations
and are deemed a development stage company.  Presently,  our only business is to
seek  out  and   investigate   potential   operating   businesses  and  business
opportunities with the goal of potentially acquiring or merging with one or more
of these businesses.  No  representation  is made, nor is any intended,  that we
will be able to carry on future business activities successfully. Further, there
can be no  assurance  that we will have the  ability to acquire or merge with an
operating  business,  business  opportunity or property that will be of material
value to us.

     Management  plans to investigate,  research and, if justified,  potentially
acquire or merge  with one or more  businesses  or  business  opportunities.  We
currently have no commitment or arrangement,  written or oral, to participate in
any  business  opportunity  and  management  cannot  predict  the  nature of any
potential business opportunity it may ultimately consider.  Management will have
broad discretion in its search for and negotiations with any potential  business
or business opportunity.

     Our  principal  executive  offices are located at 56 West 400 South,  Suite
#220, Salt Lake City, Utah 84101, and our telephone number is (801) 322-3401.

     Sources of Business Opportunities

     Management  intends to use various  resources  in its search for  potential
business  opportunities   including,  but  not  limited  to,  our  officers  and
directors,  consultants,  special advisors,  securities broker-dealers,  venture
capitalists,  members of the  financial  community  and  others who may  present
management with unsolicited  proposals.  Because of our lack of capital,  we may
not be able to  retain,  on a fee  basis,  professional  firms  specializing  in
business  acquisitions and reorganizations.  Rather, we will most likely have to
rely on outside  sources,  not  otherwise  associated  with us, that will accept
their  compensation  only after we have  finalized a successful  acquisition  or
merger.  To date, we have not engaged or entered into any discussion,  agreement

                                      -3-
<PAGE>

or understanding with a particular  consultant regarding our search for business
opportunities. Presently, no final decision has been made nor is management in a
position to identify any future prospective consultants.

     If we elect to  engage  an  independent  consultant,  we will  look only to
consultants that have experience in working with small companies in search of an
appropriate business  opportunity.  Also, the consultant must have experience in
locating  viable merger and/or  acquisition  candidates  and have a proven track
record of finalizing such business  consolidations.  Further, we would prefer to
engage a  consultant  that  will  provide  services  for only  nominal  up-front
consideration  and is  willing  to be fully  compensated  only at the close of a
business consolidation.

     We do not  intend to limit our  search to any  specific  kind of  industry,
business or geographical  location.  We may investigate and ultimately acquire a
venture  that  is in  its  preliminary  or  development  stage,  is  already  in
operation,  or in various  stages of its corporate  existence  and  development.
Management  cannot  predict at this time the status or nature of any  venture in
which we may participate.  A potential venture might need additional  capital or
merely desire to have its shares publicly traded. The most likely scenario for a
possible business arrangement would involve the acquisition of or merger with an
operating  business  that does not need  additional  capital,  but which  merely
desires to establish a public trading market for its shares. Management believes
that we could provide a potential public vehicle for a private entity interested
in becoming a publicly held corporation  without the time and expense  typically
associated with an initial public offering.

     Evaluation

     Once we identify a particular  entity as a potential  acquisition or merger
candidate,  management will seek to determine  whether  acquisition or merger is
warranted,  or whether further  investigation is necessary.  Such  determination
will generally be based on management's  knowledge and  experience,  or with the
assistance  of outside  advisors  and  consultants  evaluating  the  preliminary
information   available  to  them.   Management  may  elect  to  engage  outside
independent  consultants to perform  preliminary  analysis of potential business
opportunities.  However,  because  of our  lack of  capital  we may not have the
necessary  funds for a complete and exhaustive  investigation  of any particular
opportunity.

     In evaluating such potential business  opportunities,  we will consider, to
the extent relevant to the specific opportunity, several factors including:

     o   potential benefits to us and our stockholders;
     o   working capital;
     o   financial requirements and availability of additional financing;
     o   history of operation, if any;
     o   nature of present and expected competition;
     o   quality and experience of management;
     o   need for further research, development or exploration;
     o   potential for growth and expansion;
     o   potential for profits; and
     o   other factors deemed relevant to the specific opportunity.

     Because  we  are a  reporting  company  subject  to the  provisions  of the
Securities  Exchange  Act of  1934,  we are  required  to file  certain  annual,
periodic  and  other  reports  with  the SEC.  These  requirements  include  the
affirmative duty to file independent  audited financial  statements  annually as
part of our Form  10-KSB.  Further,  any  business  or entity that we acquire or
merge with must also have independent audited financial  statements for at least
the two most recent fiscal years, or from the date of their  inception,  if less

                                      -4-
<PAGE>
than two years. Upon consummation of a merger or acquisition, we are required to
file with the SEC on Form 8-K or other report,  audited financial  statements of
the business or entity acquired.  If such audited  financial  statements are not
available at the closing of the acquisition or merger, or within time parameters
set  forth by  various  regulations  of the  SEC,  or if the  audited  financial
statements provided do not conform to the  representations  made by the business
to be acquired, we may not be able to finalize the transaction.  Accordingly, we
intend to consider as potential acquisitions or mergers only those businesses or
entities that can provide the requisite financial statements.

     Because  we have  not yet  located  or  identified  any  specific  business
opportunity,  there are certain  unidentified  risks that  cannot be  adequately
expressed prior to the identification of a specific business opportunity.  There
can be no assurance following consummation of any acquisition or merger that the
business  venture  will  develop  into a going  concern  or, if the  business is
already operating, that it will continue to operate successfully. Many potential
business  opportunities  available to us may involve new and untested  products,
processes or market strategies which may not ultimately prove successful.

     Form of Potential Acquisition or Merger

     We cannot predict the manner in which we might participate in a prospective
business opportunity.  Each separate potential opportunity will be reviewed and,
upon  the  basis of that  review,  a  suitable  legal  structure  or  method  of
participation will be chosen. The particular manner in which we participate in a
specific  business  opportunity will depend upon the nature of that opportunity,
the  respective  needs and  desires  of our  management  and  management  of the
opportunity,  and the  relative  negotiating  strength of the parties  involved.
Actual  participation  in a  business  venture  may  take  the  form of an asset
purchase,   lease,  joint  venture,   license,   partnership,   stock  purchase,
reorganization,  acquisition,  merger or  consolidation.  We may act directly or
indirectly through an interest in a partnership,  corporation,  or other form of
organization, however, we do not intend to participate in an opportunity through
the purchase of a minority stock position.

     Because we have no assets and a limited operating history,  in the event we
successfully  acquire or merge with an  operating  business  opportunity,  it is
likely that our present stockholders will experience substantial dilution. It is
also probable that there will be a change in control of our company.  The owners
of any  business  opportunity  which we acquire  or merge with will most  likely
acquire control following such  transaction.  Management has not established any
guidelines  as to the amount of control  it will offer to  prospective  business
opportunities, but rather management will attempt to negotiate the best possible
agreement for the benefit of our stockholders.

     Presently,  management  does not intend to borrow funds to  compensate  any
person,  consultant,  promoter or affiliate in relation to the consummation of a
potential  merger or acquisition.  However,  if we engage any outside advisor or
consultant in our search for business opportunities,  it may be necessary for us
to attempt to raise  additional  funds. As of the date hereof,  we have not made
any arrangements or definitive agreements to use outside advisors or consultants
or to raise any capital.  In the event we do need to raise capital,  most likely
the only method  available  to us would be the private  sale of our  securities.
These  possible  private  sales would most likely have to be to persons known by
our  directors  or to  venture  capitalists  that would be willing to accept the
risks associated with investing in a company with no current operation.  Because
of our nature as a development stage company,  it is unlikely that we could make
a public sale of securities or be able to borrow any significant sum from either
a commercial or private lender.  Management will attempt to acquire funds on the
best available terms. However, there can be no assurance that we will be able to
obtain  additional  funding  when  and if  needed,  or  that  such  funding,  if
available,  can be obtained on  reasonable  or  acceptable  terms.  Although not
presently  anticipated,  there  is a  remote  possibility  that  we  could  sell
securities to our management or affiliates.

                                      -5-
<PAGE>

     There  exists a  possibility  that the terms of any future  acquisition  or
merger  transaction  might  include  the sale of  shares  presently  held by our
officers  and/or  directors  to parties  affiliated  with or  designated  by the
potential business  opportunity.  Presently,  management has no plans to seek or
actively negotiate such terms. However, if this situation does arise, management
is  obligated  to  follow  our  Articles  of  Incorporation  and all  applicable
corporate  laws in  negotiating  such an  arrangement.  Under this scenario of a
possible sale by officers and  directors,  it is unlikely that similar terms and
conditions would be offered to all other stockholders or that stockholders would
be given the opportunity to approve such a transaction.

     In the event of a successful  acquisition or merger, a finder's fee, in the
form of cash or securities,  may be paid to a person or persons  instrumental in
facilitating  the  transaction.  No criteria or limits have been established for
the determination of an appropriate finder's fee, although it is likely that any
fee will be based upon  negotiations  by us, the  business  opportunity  and the
finder. Management cannot at this time make an estimate as to the type or amount
of a potential  finder's fee that might be paid.  It is unlikely that a finder's
fee will be paid to an affiliate  because of the potential  conflict of interest
that might result.  If such a fee was paid to an affiliate,  it would have to be
in such a manner so as not to compromise an affiliate's  possible fiduciary duty
to us or to violate  the  doctrine of  corporate  opportunity.  Further,  in the
unlikely  event a  finder's  fee was to be paid to an  affiliate,  we would most
likely have such an arrangement  ratified by the  stockholders in an appropriate
manner.

     The Board of Directors  believes  that it is highly  unlikely  that we will
acquire or merge with a business opportunity in which our management, affiliates
or promoters have an ownership interest.  Any possible related party transaction
of this type would have to be ratified by a disinterested Board of Directors and
by the  stockholders.  Management  does not  anticipate  that we will acquire or
merge with any  related  entity.  Further,  as of the date  hereof,  none of our
officers,  directors,  or  affiliates  or  associates  have had any  preliminary
contact or discussions with any specific business opportunity, nor are there any
present  plans,   proposals,   arrangements  or  understandings   regarding  the
possibility of an acquisition or merger with any specific business opportunity.

Rights of Stockholders

     Management  anticipates  that  prior to  consummating  any  acquisition  or
merger, if required by relevant state laws and regulations, we will seek to have
the transaction  ratified by stockholders  in the appropriate  manner.  However,
under Delaware law,  certain  actions that would routinely be taken at a meeting
of stockholders, may be taken by written consent of stockholders having not less
than the minimum  number of votes that would be  necessary  to authorize or take
the  action  at a meeting  of  stockholders.  Thus,  if  stockholders  holding a
majority of the  outstanding  shares decide by written  consent to consummate an
acquisition  or  a  merger,   minority  stockholders  would  not  be  given  the
opportunity  to  vote on the  issue.  The  Board  of  Directors  will  have  the
discretion to consummate an  acquisition  or merger by written  consent if it is
determined to be in our best interest to do so.  Regardless of whether an action
to acquire or merge is ratified by written consent or by holding a stockholders'
meeting,  we will  provide to  stockholders  complete  disclosure  documentation
concerning a potential  target  business  opportunity  including the appropriate
audited   financial   statements  of  the  target.   This  information  will  be
disseminated by proxy statement in the event a stockholders' meeting is held, or
by an  information  statement  pursuant to Regulation 14C of the Exchange Act if
the action is taken by written consent.

     Under  Delaware  corporate  laws,  stockholders  may be  entitled to assert
appraisal  or  dissenters'  rights  if we  acquire  or  merge  with  a  business
opportunity. Stockholders will be entitled to dissent from and obtain payment of

                                      -6-
<PAGE>

the fair value of their shares in the event of  consummation of a plan of merger
to which we are a party,  if approval  by the  stockholders  is  required  under
applicable Delaware law. Also, stockholders will be entitled to appraisal rights
if we enter into a share  exchange  whereby  our shares  are to be  acquired.  A
stockholder who is entitled to assert appraisal rights and obtain the fair value
for  their  shares,  may  not  challenge  the  corporate  action  creating  this
entitlement,  unless the action is unlawful or  fraudulent  with  respect to the
stockholder or the company.  A dissenting  stockholder shall refrain from voting
their shares in approval of the  corporate  action.  If the  proposed  action is
approved  by the  required  vote of  stockholders,  we must  give  notice to all
stockholders who delivered to us their written notice of dissent.

Competition

     Because no potential  acquisition or merger  candidate has been identified,
we are unable to evaluate the type and extent of our likely competition.  We are
aware that there are several  other public  companies  with only nominal  assets
that  are  also   searching  for  operating   businesses   and  other   business
opportunities  as potential  acquisition  or merger  candidates.  In addition to
competing with these other public companies,  we are also in direct  competition
with  many  established   venture  capital  and  financial  concerns  that  have
significantly  greater financial and personnel resources and technical expertise
than us. In view of our limited financial resources and limited  experience,  we
will be at a significant competitive disadvantage compared to our competitors.

Employees

     As of the date hereof,  we do not have any  employees and have no plans for
retaining  employees  until such time as our business  warrants the expense,  or
until we successfully  acquire or merge with an operating business.  We may find
it necessary to periodically hire part-time clerical help on an as-needed basis.

Facilities

     We currently use as our  principal  place of business the offices of one of
our directors,  Geoff Williams,  located in Salt Lake City, Utah. The facilities
are shared with other businesses.

     Although we have no written agreement and currently pay no rent for the use
of these  facilities,  it is contemplated that at such future time as we acquire
or merge with an operating business, we will secure commercial office space from
which we will conduct our business.  However,  until such time as we complete an
acquisition or merger,  the type of business in which we will be engaged and the
type of office and other facilities that will be required,  is unknown.  We have
no current plans to secure such commercial office space.

Industry Segments

     No information is presented regarding industry segments. We are presently a
development  stage company  seeking a potential  acquisition of or merger with a
yet to be identified business  opportunity.  Reference is made to the statements
of income  included  herein in  response  to Part F/S of this Form  10-KSB for a
report of our operating history for the past two fiscal years.

Risk Factors Related to Our Business

     We are and may be subject to  substantial  risks  specific to a  particular
business or business  opportunity,  which  specific  risks cannot be ascertained
until a potential acquisition or merger candidate has been identified.  However,
at a minimum,  our  present  and  proposed  business  operations  will be highly
speculative  and be subject to the same  types of risks  inherent  in any new or
unproven venture, and will include the types of risk factors outlined below.

                                      -7-
<PAGE>

     We have no assets and no source of revenue
     ---------------------------------------------------------------------------
     We currently have no assets and have had no revenues for several years.  It
is unlikely that we will receive any revenues  until we complete an  acquisition
or merger. There can be no assurance that any acquired business will produce any
material  revenues for us or our  stockholders  or that any such  business  will
operate on a profitable basis.

     Our auditors have expressed a going concern opinion
     ---------------------------------------------------------------------------
     Our  independent   auditors  discuss  in  their  report  significant  doubt
regarding our ability to continue as a going  concern.  They include a statement
in the notes to our financial statements as follows:

         "The ability of the Company to continue as a going concern is dependent
         on the Company  obtaining  adequate  capital to fund  operating  losses
         until it  becomes  profitable.  If the  Company  is  unable  to  obtain
         adequate capital, it could be forced to cease operations.

         In order to continue as a going concern,  the Company will need,  among
         other  things,  additional  capital  resources.  Management's  plans to
         obtain such  resources for the Company  include (1)  obtaining  capital
         from  management and  significant  stockholders  sufficient to meet its
         minimal operating expenses, and (2) seeking out and completing a merger
         with an existing operating company. However,  management cannot provide
         any assurances that the Company will be successful in accomplishing any
         of its plans.

         The ability of the Company to continue as a going  concern is dependent
         upon its ability to successfully  accomplish the plans described in the
         preceding  paragraph and  eventually  secure other sources of financing
         and attain profitable operations. The accompanying financial statements
         do not include any  adjustments  that might be necessary if the Company
         is unable to continue as a going concern."

     If we  are  not  able  to  secure  necessary  funding  or to  consummate  a
successful acquisition or merger, we may be forced to cease operations.  You are
encouraged to read note 2 to financial statements included herewith.

     Discretionary use of proceeds
     ---------------------------------------------------------------------------
     We are not currently engaged in any substantive  business  activities other
than  looking  for  and  investigating  business   opportunities.   Accordingly,
management has broad discretion with respect to the potential acquisition of any
business, assets, property. Although management intends to apply any proceeds it
may receive through the future issuance of stock or debt to a suitable  acquired
business, we will have broad discretion in applying these funds. There can be no
assurance  that our use or  allocation of such proceeds will allow it to achieve
its business objectives.

     No substantive disclosure relating to prospective acquisitions
     ---------------------------------------------------------------------------
     Because  we have  not yet  identified  any  specific  industry,  assets  or
business that we may seek,  potential  investors in our securities  will have no
substantive  information  upon which to base a decision whether to invest in our
securities  until  such  a  transaction  is  completed.   Prospective  investors
currently  have no basis  to  evaluate  the  comparative  risks  and  merits  of
investing  in the  industry  or  business  in  which we may  acquire.  Potential
investors would have access to significantly  more information if we had already
identified  a potential  acquisition  or if the  acquisition  target had made an
offering of its securities directly to the public.

                                      -8-
<PAGE>

     Future acquisition or merger may result in substantial dilution
     ---------------------------------------------------------------------------
     We are currently authorized to issued 20 million shares of common stock, of
which 1.5 million shares are outstanding as of the date hereof.  The issuance of
additional  shares in connection with any  acquisition or merger  transaction or
the raising of capital  may result in  substantial  dilution of the  holdings of
current stockholders.

     Management will devote only minimal time to our business
     ---------------------------------------------------------------------------
     Presently,  our directors have other full time  obligations and will devote
only such time to our business as necessary  to maintain  our  viability.  Thus,
because of management's  other time commitments,  together with the fact that we
have no business operations,  management  anticipates that it will devote only a
minimal  amount of time to our  activities,  at least until such time as we have
identified a suitable acquisition candidate.

     Effective voting control held by directors
     ---------------------------------------------------------------------------
     Our directors own in the aggregate  approximately  98.9% of our outstanding
voting securities. No other stockholder owns in excess of 5%. Accordingly, these
persons will have the ability to elect all of our  directors,  who in turn elect
all executive officers, without regard to the votes of other stockholders.

     No public market for our common stock
     ---------------------------------------------------------------------------
     Management  currently  anticipates that within 12 months from the filing of
this  report,  we will apply for listing of our common stock on the OTC Bulletin
Board. However,  there is currently no market for our shares and there can be no
assurance that any such market will ever develop or be  maintained.  Any trading
market that may develop in the future  will most  likely be very  volatile,  and
numerous factors beyond our control may have a significant effect on the market.
Only  companies that report their current  financial  information to the SEC may
have their  securities  included on the OTC Bulletin Board.  Therefore,  we must
keep current in our filing  obligations with the SEC, including our periodic and
annual reports and the financial  statements required thereby. In the event that
we become delinquent in our filings or otherwise lose our status as a "reporting
issuer," any future  quotation  of our shares on the OTC  Bulletin  Board may be
jeopardized.

Item 2.       Description of Property

     We do not presently own any property.

Item 3.       Legal Proceedings

     There are no material  pending legal  proceedings to which our company,  or
any  subsidiary  thereof,  is a party or to which any of our property is subject
and, to the best of our knowledge,  no such actions against us are  contemplated
or threatened.

Item 4.       Submission of Matters to a Vote of Security Holders

     No matters were  submitted to a vote of our  securities  holders during the
fourth quarter of the fiscal year ended December 31, 2001.

                                      -9-
<PAGE>
                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters

     There is not  currently,  nor has there ever been, a public  trading market
for our common stock.  It is anticipated  that within 12 months of the filing of
this report,  we will make an  application to the NASD to have our shares quoted
on the OTC Bulletin  Board.  Our application  will consist of current  corporate
information,  financial  statements  and other  documents  as  required  by Rule
15c2-11 of the Securities Exchange Act of 1934.

     Inclusion on the OTC Bulletin Board permits price quotations for our shares
to be published by that service.  Although we intend to submit an application to
the OTC Bulletin  Board in the near future,  we do not  anticipate our shares to
immediately  be traded in the  public  market.  Also,  secondary  trading of our
shares  may be subject to certain  state  imposed  restrictions.  Except for the
application  to  the  OTC  Bulletin  Board,  there  are  no  plans,   proposals,
arrangements or  understandings  with any person concerning the development of a
trading  market in any of our  securities.  There can be no  assurance  that our
shares  will be  accepted  for  trading on the OTC  Bulletin  Board or any other
recognized trading market. Also, there can be no assurance that a public trading
market will develop  following  acceptance  by the OTC Bulletin  Board or at any
other time in the future or, that if such a market does develop,  that it can be
sustained.

     The  ability  of  individual  stockholders  to  trade  their  shares  in  a
particular  state may be subject to various rules and regulations of that state.
A number of states  require that an issuer's  securities  be registered in their
state or  appropriately  exempted from  registration  before the  securities are
permitted  to trade in that state.  Presently,  we have no plans to register our
securities in any particular state.

     It is most unlikely that our  securities  will be listed on any national or
regional  exchange  or on The Nasdaq  Stock  Market.  Therefore  our shares most
likely will be subject to the  provisions of Section 15(g) and Rule 15g-9 of the
Exchange Act, commonly referred to as the "penny stock" rule. Section 15(g) sets
forth certain  requirements for  broker-dealer  transactions in penny stocks and
Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule
3a51-1 of the Exchange Act.

     The SEC generally  defines penny stock to be any equity security that has a
market  price  less than $5.00 per share,  subject to certain  exceptions.  Rule
3a51-1  provides  that any equity  security  is  considered  to be a penny stock
unless that security is:

     o   registered and traded on a national securities exchange meeting
         specified criteria set by the SEC;
     o   authorized for quotation on The NASDAQ Stock Market;
     o   issued by a registered investment company;
     o   excluded from the definition on the basis of price (at least $5.00 per
         share) or the issuer's net tangible assets; or
     o   exempted from the definition by the SEC.

     Broker-dealers  who sell  penny  stocks to persons  other than  established
customers and accredited  investors  (generally persons with assets in excess of
$1,000,000 or annual income exceeding $200,000,  or $300,000 together with their
spouse), are subject to additional sales practice  requirements.  Broker-dealers
must also make a special  suitability  determination  for the  purchase  of such
securities  and must  have  received  the  purchaser's  written  consent  to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock,  unless exempt, the rules require the delivery,  prior to the first
transaction, of a risk disclosure document relating to the penny stock market. A
broker-dealer   also  must  disclose  the   commissions   payable  to  both  the


                                      -10-
<PAGE>

broker-dealer and the registered representative,  and current quotations for the
securities.  Finally,  monthly  statements  must be sent to  clients  disclosing
recent  price  information  for  the  penny  stocks  held  in  the  account  and
information on the limited market in penny stocks.

     Consequently,  these rules may  restrict the ability of  broker-dealers  to
trade and/or maintain a market in our common stock and may affect the ability of
stockholders  to  sell  their  shares.  These  requirements  may  be  considered
cumbersome by  broker-dealers  and could impact the  willingness of a particular
broker-dealer to make a market in our shares,  or they could affect the value at
which our shares trade.  Classification  of the shares as penny stocks increases
the risk of an investment in our shares.

     As of July 31, 2004,  there were  approximately 36 holders of record of our
common stock.  Because all of our outstanding shares of common stock were issued
pursuant to exemptions  under the 1933 Act, we have  considered all  outstanding
shares as  restricted  securities.  Corporate  records  indicate that all of the
issued and outstanding  shares were issued in 1999 in private  transactions.  We
have relied upon the  exemption  provided by Section 4(2) of the 1933 Act in the
private issuance of shares.  To the best of our knowledge,  no private placement
memorandum was used in relation to the issuance of shares.

     Under Rule 144(k) of the 1933 Act, the requirements of paragraphs (c), (e),
(f),  and (h) of Rule 144 do not  apply to  restricted  securities  sold for the
account of a person who is not an affiliate of an issuer at the time of the sale
and has not been an affiliate  during the preceding  three months,  provided the
securities have been  beneficially  owned by the seller for a period of at least
two years prior to their sale.  Thus,  in reliance on Rule  144(k),  we consider
15,800  shares  to be free  of  restriction,  unless  held  by an  affiliate  or
controlling  stockholder.  For  purposes  of this  report  only,  a  controlling
stockholder is considered to be a person owning ten percent (10%) or more of our
total  outstanding  shares,  or is otherwise deemed an affiliate.  No individual
person owning a portion of the 15,800 shares owns more than five percent (5%) of
the total outstanding shares.

     The remaining  1,484,200  shares are considered  restricted  securities and
presently held by four stockholders.  Of these restricted shares, 888,200 shares
are presently  eligible for sale pursuant to the provisions of Rule 144, subject
to the volume and other  limitations  set forth  under Rule 144.  The balance of
596,000  restricted  shares have been held by the current  stockholder  for less
than one year and are not eligible for Rule 144.

     Under the provisions of Rule 144 of the Securities Act of 1933,  restricted
securities may be sold into the public market, subject to holding period, volume
and other  limitations  set forth under the Rule. In general,  under Rule 144 as
currently in effect,  a person (or persons whose shares are  aggregated) who has
beneficially owned restricted shares for at least one year, including any person
who may be deemed to be an "affiliate" (as the term "affiliate" is defined under
the Securities  Act), is entitled to sell,  within any  three-month  period,  an
amount of shares that does not exceed the greater of

     o   the average  weekly  trading  volume in the common  stock,  as reported
         through  the  automated  quotation  system of a  registered  securities
         association, during the four calendar weeks preceding such sale, or
     o   1% of the shares then outstanding.

     In order  for a  stockholder  to rely on Rule 144,  we must have  available
adequate  current public  information with respect to our business and financial
status.  A person  who is not  deemed to be an  "affiliate"  and has not been an
affiliate for the most recent three months,  and who has held restricted  shares
for at least two years would be  entitled to sell such shares  under Rule 144(k)
without regard to the various resale limitations of Rule 144.

                                      -11-
<PAGE>

     The SEC has informed us that,  based on a letter dated  January 21, 2000 to
Mr. Ken Worm,  Assistant  Director of the OTC  Compliance  Unit at the NASD, the
SEC's view is that  securities  issued by a blank check company cannot be resold
under Rule 144 but must be  registered  under the  Securities  Act of 1933.  The
SEC's view may be applicable to the shares of our outstanding common stock.

Dividend Policy

     We have not declared or paid cash  dividends or made  distributions  in the
past on our  common  stock,  and we do not  anticipate  that we  will  pay  cash
dividends or make  distributions in the foreseeable  future. We currently intend
to retain and invest future earnings to finance operations.

Recent Sales of Unregistered Securities

     In  September,  1999,  we issued an aggregate of 1.5 million  shares of our
common stock to the following persons.

                       Name of Purchaser                      Number of Shares
                       -----------------                      ----------------
                      Tom  Behan                                        400
                      Brett Benson                                      400
                      Edward Cowle                                  600,000
                      Robert Dansby                                     400
                      Jill Dell                                         400
                      Bob Dempsey                                       400
                      Don Griffin                                       400
                      Jo Juliano                                        400
                      John S. Juliano                                   400
                      Rose Mary Kelly                                   400
                      Robyn Mancini                                     400
                      Dale Miller                                       400
                      Dave Miller                                       400
                      Jean Miller                                       400
                      Bernadette Ott                                    400
                      Janis Patterson                                   400
                      John Price                                        400
                      Andrea Ruzicka                                    400
                      Jim Ruzicka                                       400
                      J. Rockwell Smith                             600,400
                      Jeannie Snow                                      400
                      Michelle Snow                                     400
                      Ron Snow                                          400
                      Tom Walker                                        400
                      Sharon Walter                                     400
                      Pete Wells                                        400
                      Haley Wheeler                                     400
                      Scott Wheeler                                     400
                      Tonya Wheeler                                     400
                      Laura Wilkins                                     400
                      Sandra Wilkins                                    400
                      Dave Williams                                     400
                      Geoff Williams                                284,200
                      Nate Williams                                     400
                      Harry Winderman                                 3,000
----------------

     The above  shares of common stock were issued for cash  consideration  in a
private  transaction in reliance upon the exemption from registration  under the
Securities Act of 1933, provided by Section 4(2) thereunder.

                                      -12-
<PAGE>
Item 6.       Management's Discussion and Analysis or Plan of Operation

     The following  information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-KSB.

     We are considered a development stage company with no assets or capital and
with no material  operations or income.  The costs and expenses  associated with
the preparation and filing of this report and other reports and our registration
statement  in 2000,  have been paid for by  advances  from  stockholders.  It is
anticipated  that we will require only nominal capital to maintain our corporate
viability and  necessary  funds will most likely be provided by our officers and
directors in the immediate future.  However, unless we are able to facilitate an
acquisition  of or  merger  with an  operating  business  or are able to  obtain
significant  outside financing,  there is substantial doubt about our ability to
continue as a going concern.

     In the  opinion  of  management,  inflation  has not and  will  not  have a
material effect on our operations until such time as we successfully complete an
acquisition  or merger.  At that time,  management  will  evaluate  the possible
effects of inflation related to our business and operations.

Plan of Operation

     During  the next 12  months,  we will  actively  seek  out and  investigate
possible business  opportunities with the intent to acquire or merge with one or
more business  ventures.  In our search for business  opportunities,  management
will follow the procedures  outlined in Item 1 above.  Because we lack funds, it
may be necessary for our officers and directors to either advance funds to us or
to accrue expenses until such time as a successful business consolidation can be
made. Management intends to hold expenses to a minimum and to obtain services on
a  contingency  basis  when  possible.  Further,  our  directors  will defer any
compensation until such time as an acquisition or merger can be accomplished and
will  strive  to have  the  business  opportunity  provide  their  remuneration.
However,  if engage  outside  advisors or consultants in our search for business
opportunities,  it may be necessary for us to attempt to raise additional funds.
As of the  date  hereof,  we  have  not  made  any  arrangements  or  definitive
agreements to use outside  advisors or consultants  or to raise any capital.  In
the event we do need to raise capital,  most likely the only method available to
us would be the  private  sale of our  securities.  Because  of our  nature as a
development  stage  company,  it is unlikely that we could make a public sale of
securities or be able to borrow any  significant sum from either a commercial or
private  lender.  There  can be no  assurance  that we  will  be able to  obtain
additional funding when and if needed, or that such funding,  if available,  can
be obtained on acceptable terms.

     We do not  intend to use any  employees,  with the  possible  exception  of
part-time  clerical  assistance  on an  as-needed  basis.  Outside  advisors  or
consultants  will be used only if they can be obtained  for minimal cost or on a
deferred payment basis.  Management is confident that it will be able to operate
in this manner and to continue its search for business  opportunities during the
next twelve months.

Net Operating Loss

     We have accumulated  approximately $900 of net operating loss carryforwards
as of December 31, 2001.  This loss  carryforward  may be offset against taxable
income and income taxes in future years and expires in the year 2021. The use of
these  losses to reduce  future  income taxes will depend on the  generation  of
sufficient  taxable  income prior to the  expiration of the net  operating  loss
carryforwards.  In the event of  certain  changes in  control,  there will be an
annual limitation on the amount of net operating loss carryforwards which can be
used. No tax benefit has been reported in the financial  statements for the year
ended December 31, 2001 because it has been fully offset by a valuation reserve.
The use of future tax benefit is  undeterminable  because we  presently  have no
operations.
                                      -13-
<PAGE>

Forward-Looking and Cautionary Statements

     This report on Form 10-KSB includes "forward-looking statements" within the
meaning of Section  27A of the  Securities  Act of 1933,  and Section 21E of the
Securities Exchange Act of 1934. These forward-looking  statements may relate to
such matters as anticipated financial performance,  future revenues or earnings,
business prospects,  projected ventures, new products and services,  anticipated
market  performance  and similar  matters.  When used in this report,  the words
"may,"  "will,"  expect,"  anticipate,"   "continue,"   "estimate,"   "project,"
"intend,"  and similar  expressions  are  intended  to identify  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 regarding events, conditions,
and financial  trends that may affect our future plans of  operations,  business
strategy,  operating results, and financial position.  We caution readers that a
variety of factors could cause our actual results to differ  materially from the
anticipated  results or other matters expressed in  forward-looking  statements.
These risks and uncertainties, many of which are beyond our control, include:

     o   the sufficiency of existing capital  resources and our ability to raise
         additional capital to fund cash requirements for future operations;
     o   uncertainties following any successful acquisition or merger related to
         the  future  rate of  growth  of our  business  and  acceptance  of our
         products and/or services;
     o   volatility  of the stock market,  particularly  within  the  technology
         sector; and
     o   general economic conditions.

     Although we believe the  expectations  reflected  in these  forward-looking
statements are reasonable,  such  expectations  cannot guarantee future results,
levels of activity, performance or achievements.

Recent Accounting Pronouncements

     In August 2001,the  Financial  Accounting  Standards Board, or FASB, issued
Statement of Financial  Accounting Standards (SFAS) SFAS No. 143, Accounting for
Asset  Retirement  Obligations,  which  established  a uniform  methodology  for
accounting for estimated  reclamation and abandonment  costs.  The statement was
effective for fiscal years  beginning  after June 15, 2002. The adoption of SFAS
143 did not have a material effect on our financial statements.

     On April 30,  2002,  the FASB  issued  FASB  Statement  No. 145 (SFAS 145),
"Rescission of FASB  Statements  No. 4, 44, and 64,  Amendment of FASB Statement
No. 13, and Technical  Corrections." SFAS 145 rescinds both FASB Statement No. 4
(SFAS 4),  "Reporting  Gains and Losses  from  Extinguishment  of Debt," and the
amendment to SFAS 4, FASB Statement No. 64 (SFAS 64),  "Extinguishments  of Debt
Made to Satisfy Sinking-Fund  Requirements."  Through this rescission,  SFAS 145
eliminates  the  requirement  (in both SFAS 4 and SFAS 64) that gains and losses
from the extinguishment of debt be aggregated and, if material, classified as an
extraordinary item, net of the related income tax effect.  However, an entity is
not prohibited from classifying such gains and losses as extraordinary items, so
long as it meets the  criteria in paragraph 20 of  Accounting  Principles  Board
Opinion No. 30,  Reporting  the Results of  Operations  Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions.  Further,  SFAS 145 amends paragraph 14(a) of
FASB Statement No. 13,  "Accounting  for Leases," to eliminate an  inconsistency
between  the  accounting  for  sale-leaseback  transactions  and  certain  lease
modifications  that have  economic  effects  that are similar to  sale-leaseback
transactions.  The amendment  requires that a lease  modification (1) results in
recognition of the gain or loss in the 9 financial statements, (2) is subject to
FASB  Statement  No. 66,  "Accounting  for Sales of Real  Estate," if the leased
asset is real estate (including integral equipment),  and (3) is subject (in its
entirety) to the sale-leaseback  rules of FASB Statement No. 98, "Accounting for

                                      -14-
<PAGE>

Leases:  Sale-Leaseback Transactions Involving Real Estate, Sales-Type Leases of
Real Estate,  Definition of the Lease Term,  and Initial  Direct Costs of Direct
Financing Leases."  Generally,  FAS 145 is effective for transactions  occurring
after May 15, 2002.  The adoption of SFAS 145 did not have a material  effect on
our financial statements.

     In June  2002,  the FASB  issued  SFAS  No.  146,  "Accounting  for Exit or
Disposal Activities" (SFAS 146). SFAS 146 addresses significant issues regarding
the  recognition,  measurement,  and reporting of costs that are associated with
exit  and  disposal  activities,  including  restructuring  activities  that are
currently accounted for under EITF No. 94-3, "Liability  Recognition for Certain
Employee  Termination  Benefits  and Other Costs to Exit an Activity  (including
Certain Costs Incurred in a Restructuring)." The scope of SFAS 146 also includes
costs  related  to  terminating  a  contract  that is not a  capital  lease  and
termination  benefits that employees who are  involuntarily  terminated  receive
under the terms of a one-time benefit arrangement that is not an ongoing benefit
arrangement or an individual  deferred-compensation  contract.  SFAS 146 will be
effective for exit or disposal  activities that are initiated after December 31,
2002 and early application is encouraged.  The provisions of EITF No. 94-3 shall
continue to apply for an exit activity initiated under an exit plan that met the
criteria  of EITF No.  94-3  prior to the  adoption  of SFAS 146.  The effect on
adoption of SFAS 146 will change on a  prospective  basis the timing of when the
restructuring  charges are recorded from a commitment  date approach to when the
liability is incurred.  The adoption of SFAS 146 did not have a material  effect
on our financial statements.

     In October  2002,  the FASB issued SFAS No. 147,  "Acquisitions  of Certain
Financial  Institutions" which is effective for acquisitions on or after October
1, 2002. This statement provides interpretive guidance on the application of the
purchase  method  to  acquisitions   of  financial   institutions.   Except  for
transactions  between two or more mutual  enterprises,  this  Statement  removes
acquisitions  of  financial  institutions  from the  scope  of both  SFAS 72 and
Interpretation  9 and  requires  that those  transactions  be  accounted  for in
accordance with SFAS No. 141, "Business Combinations" and No. 142, "Goodwill and
Other  Intangible  Assets." The adoption of SFAS No. 147 did not have a material
effect on our financial statements.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock Based
Compensation- Transition and Disclosure-an amendment of FASB Statement No. 123"
which is effective for financial statements issued for fiscal years ending after
December 15, 2002. This Statement amends SFAS 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
SFAS 123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based compensation and the
effect of the method used on reported results. The adoption of SFAS No. 148 did
not have a material effect on our financial statements.

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative  Instruments and Hedging Activities" which is effective for contracts
entered  into or  modified  after June 30,  2003 and for  hedging  relationships
designated  after June 30, 2003. This statement  amends and clarifies  financial
accounting for derivative instruments embedded in other contracts  (collectively
referred to as derivatives) and hedging  activities under SFAS 133. The adoption
of SFAS No. 149 did not have a material effect on our financial statements.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of both Liabilities and Equity" which
is effective for financial  instruments  entered into or modified  after May 31,
2003,  and is otherwise  effective at the beginning of the first interim  period
beginning after June 15, 2003. This Statement  establishes  standards for how an

                                      -15-
<PAGE>

issuer  classifies and measures in its statement of financial  position  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a  liability  (or an  asset in some  circumstances)  because  that  financial
instrument  embodies an obligation  of the issuer.  The adoption of SFAS No. 150
did not have a material effect on our financial statements.

     FASB  Interpretation  No.  45,   "Guarantor's   Accounting  and  Disclosure
Requirements for Guarantees,  Including  Indirect  Guarantees of Indebtedness of
Others - an  Interpretation  of FASB  Statements No. 5, 57 and 107". The initial
recognition and initial measurement  provisions of this Interpretation are to be
applied  prospectively to guarantees issued or modified after December 31, 2002.
The disclosure  requirements in the Interpretation  were effective for financial
statements  of interim or annual  periods  ending after  December 15, 2002.  The
adoption  of FASB  Interpretation  No. 45 did not have a material  effect on our
financial statements.

     In January 2003, the FASB issued FASB  Interpretation No. 46 "Consolidation
of Variable Interest  Entities." FIN 46 provides guidance on the  identification
of entities  for which  control is  achieved  through  means other than  through
voting rights,  variable interest entities,  and how to determine when and which
business  enterprises  should  consolidate  variable  interest  entities.   This
interpretation  applies  immediately to variable interest entities created after
January  31,  2003.  It  applies  in the first  fiscal  year or  interim  period
beginning  after  June 15,  2003,  to  variable  interest  entities  in which an
enterprise  holds a variable  interest that it acquired before February 1, 2003.
The  adoption  of  FIN 46  did  not  have a  material  impact  on our  financial
statements.

Item 7.       Financial Statements

     Financial  statements for the fiscal years ended December 31, 2001 and 2000
have been  examined  to the  extent  indicated  in their  reports  by  Chisholm,
Bierwolf & Nilson, LLC,  independent  certified public accountants and have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America and pursuant to Regulation  S-B as  promulgated  by the
SEC. The aforementioned  financial  statements are included herein starting with
page F-1.

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

     We have not had any  disagreements  with our certified  public  accountants
with respect to accounting practices or procedures of financial disclosures.

Item 8A.      Controls and Procedures

     As of the end of the period  covered  by this  report,  we  carried  out an
evaluation,  under the  supervision  and with the  participation  of management,
including  our chief  executive  officer  and chief  financial  officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  as  defined  in Rules 13a-  15(e) and  15d-15(e)  of the  Securities
Exchange Act of 1934.  Based upon that evaluation,  our chief executive  officer
and  chief  financial  officer  concluded  that  our  disclosure   controls  and
procedures  are  effective  to cause the  material  information  required  to be
disclosed  by us in the reports that we file or submit under the Exchange Act to
be  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the SEC's rules and forms.  There have been no significant  changes
in our internal  controls or in other factors which could  significantly  affect
internal controls subsequent to the date we carried out our evaluation.

                                      -16-
<PAGE>
                                    PART III

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

     The  following  table sets forth the names,  ages,  and offices held by our
directors and executive officers:

         Name                       Age      Position
         ----                       ---      --------
         J. Rockwell Smith           64      Chairman of the Board and Director
         Edward F. Cowle             48      President, C.E.O. and Director
         Geoff Williams              34      Secretary and Director

     All directors hold office until the next annual meeting of stockholders and
until  their  successors  have been duly  elected  and  qualified.  There are no
agreements  with respect to the election of directors.  We have not  compensated
our directors  for service on the Board of Directors or any  committee  thereof,
but directors are entitled to be reimbursed for expenses incurred for attendance
at meetings of the Board and any  committee  of the Board.  However,  due to our
lack of funds,  directors will defer their expenses and any  compensation  until
such time as we can  consummate a successful  acquisition  or merger.  As of the
date hereof, no director has accrued any expenses or compensation.  Officers are
appointed  annually  by the  Board  and each  executive  officer  serves  at the
discretion of the Board. We do not have any standing committees.

     None of our  directors  are  currently,  nor for the past three  years have
been, a director of a "shell" or "blank check" company or other corporation that
is actively pursuing acquisitions or mergers, except as set forth below in their
respective resumes.

     No  director,  officer,  affiliate  or promoter  has,  within the past five
years, filed any bankruptcy  petition,  been convicted in or been the subject of
any  pending  criminal  proceedings,  or is any such  person the  subject or any
order,  judgment,  or decree  involving  the  violation  of any state or federal
securities laws.

     Our present directors have other full-time  employment or sources of income
and will routinely  devote only such time to our business  necessary to maintain
our  viability.  It is estimated  that each  director  will devote less than ten
hours  per month to our  activities.  The  directors  will,  when the  situation
requires,  review potential  business  opportunities or actively  participate in
negotiations for a potential merger or acquisition on an as- needed-basis.

     Currently,  there is no  arrangement,  agreement or  understanding  between
management   and   non-management   stockholders   under  which   non-management
stockholders  may  directly  or  indirectly  participate  in  or  influence  the
management of our affairs. Present management openly accepts and appreciates any
input or  suggestions  from  stockholders.  However,  the Board of  Directors is
elected by the stockholders  and the  stockholders  have the ultimate say in who
represents them on the Board.  There are no agreements or understandings for any
officer or director  to resign at the request of another  person and none of the
current  offers  or  directors  are  acting  on  behalf  of,  or will act at the
direction of any other person.

     The business experience of each of the persons listed above during the past
five years is as follows:

     J.  Rockwell  Smith.  Mr. Smith has been a director and Chairman  since our
inception in July 1999.  From 1977 to 1989,  he owned and  operated  Rocky Smith
Construction,  a  construction  company  in  Park  City,  Utah  that  supervised
construction  projects in the resort  community.  Since 1990, Mr. Smith has been
semi-retired  while being active with his private  investments  and working as a
part-time  driver  for Park  City  Transportation  Company.  Mr.  Smith  studied
engineering at Seattle University and the University of Washington.
                                      -17-
<PAGE>

     Mr. Smith has been an executive  officer and director within the last three
years of the following companies that may also be deemed blank check companies:

     o   Big Flash Corporation (Chairman of the Board and director from July
         1999 to the present);
     o   Consolidated Travel Systems, Inc. (Vice President and director since
         February 2001)
     o   Eagle's Nest Mining Company, now known as Nanoscience Technologies,
         Inc. (director from October 1997 to March 2004).
     o   Grant Silver, Inc. (principal stockholder until September 1997).
     o   Green MT. P.S. (Principal stockholder until January 1998), now known as
         Generex Biotechnology Corporation.
     o   Index Daley  Mines,  now known as  International  Digital  Technologies
         (principal stockholder until June 1998).
     o   Nava Leisure, U.S.A., Inc., now known as Senesco Technologies, Inc.
         (President and director until January 1999).

     The current status of each of these companies is set forth below:
<TABLE>
<CAPTION>

Name of Company                         Date of Registration           Status
---------------                         --------------------           ------

<S>                                     <C>                            <C>
Big Flash Corporation                   11-16-1999 (SB-2)              Delinquent in filings with SEC
                                        7-28-2000 (10-SB)              Seeking merger and/or acquisition

Consolidated Travel Systems, Inc.       11-9-2001 (10-SB)              Active and current with SEC
                                                                       Pending acquisition by way of merger
                                                                       with Knobias Holdings, Inc.

Eagles Nest Mining Company              5-14-1999 (10-SB)              Active and current with SEC
(n.k.a. Nanoscience Technologies, Inc.)                                Entered into research and license
                                                                       agreement with New York University in
                                                                       September 2003 to develop certain
                                                                       technologies

Grant Ventures, Inc.                    12-20-2002 (10-SB)             Active and current with SEC
                                                                       Completed merger with Impact
                                                                       Diagnostics, Inc.  in July 2004

Green Mt. Labs., Inc.                   1-8-2004 (10-SB)               Active and current with SEC
                                                                       Seeking merger and/or acquisition

Index Daley Mines                       None                           Current status unknown
                                                                       Acquired Overlook Health Care Systems
                                                                       in 1998 and became International Digital
                                                                       Technologies in 1999
Nava Leisure, U.S.A., Inc.              3-27-1997 (10-SB)              Active and current with SEC
(n.k.a. Senesco Technologies, Inc.)                                    Merged with Senesco, in January 1999
                                                                       and change its domicile to New Jersey in
                                                                       September 1999
</TABLE>

     Edward F. Cowle.  Mr.  Cowle has been  President  and a Director of Calypso
since our inception in July 1999.  Mr. Cowle has been self employed in financial
public  relations  from 1994 to the present,  assisting  public  companies  with
financial and  investment  banking  activities.  From 2000 to December 2003, Mr.
Cowle served as a director of Laser Technology, Inc., a public company listed on
the American  Stock  Exchange  that designs,  manufactures  and markets of pulse


                                      -18-
<PAGE>

laser  measuring  instruments  and  systems.  Mr.  Cowle was a principal  of LTI
Acquisition  Corp., a stockholder  group that took Laser  Technology  private in
December  2003.  From  1992 to 1994,  Mr.  Cowle was a Senior  Vice  President--
Investments  with Paine Webber in New York City and from 1991 to 1992,  he was a
Registered  Representative  with Bear  Stearns & Company,  also in New -16- York
City. Mr. Cowle graduated from Fairleigh  Dickinson  University in Madison,  New
Jersey in 1978 with a B.A. Degree in English,  American Studies.  Mr. Cowle also
attended  Vermont Law School in South  Royalton,  Vermont from 1978 to 1979. Mr.
Cowle is a principal stockholder of LTI Acquisition.

     Mr.  Cowle has been an  executive  officer and  director  of the  following
companies that may be deemed blank check companies:

     o   Big Flash  Corporation  (President  and director  from July 1999 to the
         present);
     o   Eastgate  Acquisition  Corp.,  now known as Talavera's  Fine  Furniture
         (Secretary  and director from 1999 to 2001 and  President  from 2001 to
         the present); and
     o   Westgate  Acquisitions Corp.  (Secretary and director from 1999 to 2001
         and President from 2001 to the present).

     The current status of each of these companies is set forth below:
<TABLE>
<CAPTION>
Name of Company                         Date of Registration           Status
---------------                         --------------------           ------

<S>                                     <C>                            <C>
Big Flash Corporation                   11-16-1999 (SB-2)              Delinquent in filings with SEC
                                        7-28-2000 (10-SB)              Seeking merger and/or acquisition

Eastgate Acquisition Corp.              11-29-1999 (SB-2)              Not filing reports with SEC
                                                                       Seeking merger and/or acquisition

Westgate Acquisitions Corp.             11-30-1999 (SB-2)              Not filing reports with SEC
                                                                       Seeking merger and/or acquisition
</TABLE>

     Geoff  Williams.  Mr.  Williams  has been a director  of Calypso  since our
inception in July 1999 and was appointed  secretary in August 1999. From 1994 to
the present,  Mr.  Williams has been a  representative  of Williams  Investments
Company,  a  Salt  Lake  City,  Utah  financial   consulting  firm  involved  in
facilitating mergers, acquisitions,  business consolidations and financings. Mr.
Williams attended the University of Utah and California Institute of the Arts.

     Mr.  Williams  has been an executive  officer and director  within the last
three  years of the  following  companies  that may also be deemed  blank  check
companies:

     o   Big  Flash  Corporation  (Secretary  and  director  from  1999  to  the
         present);
     o   Consolidated  Travel  Systems,  Inc.  (Director  since  August 1999 and
         President from February 2001 to the present);
     o   Eastgate  Acquisition  Corp.,  now known as Talavera's  Fine  Furniture
         (Secretary and director from 1999 to the present);
     o   Grant  Ventures,  Inc.  (Secretary  and director from July 2001 to July
         2004);
     o   Green Mt. Labs., Inc.,  (director since August 2002 and President since
         April 2004);
     o   Ocean Express Lines, Inc. (President and director from February 2000 to
         February 2002);
     o   RAKO Capital Corporation  (President and director from February 2001 to
         December 2002); and
     o   Westgate  Acquisitions  Corp.  (Secretary and director from 1999 to the
         present).

                                      -19-
<PAGE>

     The current status of each of these companies is set forth below:
<TABLE>
<CAPTION>
Name of Company                         Date of Registration           Status
---------------                         --------------------           ------
<S>                                     <C>                           <C>
Big Flash Corporation                   11-16-1999 (SB-2)              Delinquent in filings with SEC
                                        7-28-2000 (10-SB)              Seeking merger and/or acquisition

Consolidated Travel Systems, Inc.       11-9-2001(10-SB)               Active and current with SEC
                                                                       Pending merger with Knobias Holdings,
                                                                       Inc.

Eastgate Acquisition Corp.              11-29-1999 (SB-2)              Not filing reports with SEC
                                                                       Seeking merger and/or acquisition

Talavera's Fine Furniture               None                           Inactive furniture company

Grant Ventures, Inc.                    12-20-2002 (10-SB)             Active and current with SEC
                                                                       Completed merger with Impact
                                                                       Diagnostics, Inc.  in July 2004

Green Mt. Labs., Inc.                   1-8-2004 (10-SB)               Active and current with SEC
                                                                       Seeking merger and/or acquisition

Ocean Express Lines, Inc.               7-3-2002 (10-SB)               Active and delinquent in filings
(n.k.a. Cementitious Materials, Inc.)                                  with SEC
                                                                       Acquired Cementitious Material
                                                                       Technologies, Inc. in November 2003

RAKO Capital Corporation                7-16-1998 (10-SB)              Currently delinquent in its periodic report
                                                                       filings with SEC
                                                                       Acquired Centra Industries, Inc. in
                                                                       January 2003 - currently an active
                                                                       telecommunications infrastructure
                                                                       company

Westgate Acquisitions Corp.             11-30-1999 (SB-2)              Not filing reports with SEC
                                                                       Seeking merger and/or acquisition
</TABLE>

Compliance With Section 16(a) of the Exchange Act

     Section  16(a) of the Exchange Act requires  our  directors  and  executive
officers,  and persons who own more than 10% of our common  stock,  to file with
the SEC initial  reports of ownership and reports of changes in ownership of our
common  stock and other  equity  securities.  None of these  persons  have filed
initial reports of ownership and we will endeavor to have these reports prepared
and submitted to the SEC.

Item 10.      Executive Compensation

     We have not had a bonus, profit sharing, or deferred  compensation plan for
the benefit of employees,  officers or directors.  We have not paid any salaries
or other  compensation  to officers,  directors or employees for the years ended
December  31, 2001 and 2000.  Further,  we have not entered  into an  employment
agreement  with any of our officers,  directors or any other persons and no such
agreements  are  anticipated  in the immediate  future.  It is intended that our
directors  will  defer any  compensation  until such time as an  acquisition  or
merger can be  accomplished  and will  strive to have the  business  opportunity
provide  their  remuneration.  As of the date hereof,  no person has accrued any
compensation.

                                      -20-
<PAGE>

Item 11.      Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth  information,  to the best of our knowledge,
as of July 31, 2004, with respect to each person known by us to own beneficially
more than 5% of the  outstanding  common stock,  each director and all directors
and officers as a group.

Name and Address                       mount and Nature of          Percent
of Beneficial Owner                    eneficial Ownership        of Class(1)
--------------------                   -------------------        -----------
J. Rockwell Smith *                              4,400                 .3 %
   54 West 400 South, Suite 220
   Salt Lake City, UT 84101
Geoff Williams *                               284,200               18.9 %
   54 West 400 South, Suite 220
   Salt Lake City, UT 84101
Edward F. Cowle *                              600,000               40.0 %
   300 Park Avenue, Suite 1712
   New York, NY 10022
H. Deworth Williams                            596,000               39.7 %
   54 West 400 South, Suite 220
   Salt Lake City, UT 84101
All directors and officers                     888,600               59.2 %
   a group (3 persons)

      *  Director and/or executive officer

     Note:    Unless  otherwise  indicated in the footnotes  below, we have been
              advised  that each  person  above has sole  voting  power over the
              shares indicated above.

     (1)      Based  upon 1.5  million  shares of common  stock  outstanding  on
              December 31, 2001 and July 31, 2004.

Item 12.      Certain Relationships and Related Transactions

     During the past two fiscal years, there have been no material  transactions
between us and any officer,  director,  nominee for election as director, or any
stockholder owning greater than 5% of our outstanding  shares, nor any member of
the above referenced individuals' immediate family.

     Our  officers  and  directors  are  subject to the  doctrine  of  corporate
opportunities  only insofar as it applies to business  opportunities in which we
have indicated an interest, either through a proposed business plan or by way of
an express  statement of interest  contained in our  minutes.  If directors  are
presented with business  opportunities that may conflict with business interests
identified by us, such  opportunities must be promptly disclosed to the Board of
Directors  and made  available  to us. In the event  the Board  shall  reject an
opportunity  so  presented  and  only  in that  event,  any of our  officers  or
directors may avail themselves of such an opportunity. Every effort will be made
to  resolve  any  conflicts  that may  arise in  favor  of us.  There  can be no
assurance, however, that these efforts will be successful.

     In the event of a successful  acquisition or merger, a finder's fee, in the
form of cash or securities,  may be paid to persons instrumental in facilitating
the  transaction.  We have  not  established  any  criteria  or  limits  for the
determination  of a finder's fee,  although it is likely that an appropriate fee
will be based upon negotiations by us and the appropriate  business  opportunity
and the finder.  Such fees are estimated to be customarily  between 1% and 5% of
the size of the transaction,  based upon a sliding scale of the amount involved.
Management  cannot at this time make an  estimate  as to the type or amount of a
potential  finder's fee that might be paid,  but is expected to be comparable to

                                      -21-
<PAGE>
consideration normally paid in like transactions. It is unlikely that a finder's
fee will be paid to an affiliate  because of the potential  conflict of interest
that might result. Any such fee would have to be approved by the stockholders or
a disinterested Board of Directors.

Item 13.          Exhibits and Reports on Form 8-K

         (a)      Exhibits

Exhibit No.                 Exhibit Name
-----------                 ------------
     3.1*         Certificate of Incorporation

     3.2*         By-Laws
     4.1*         Instrument  defining rights of  stockholders  (See Exhibit No.
                  3.1, Certificate of Incorporation)
    31.1          Certification  of  C.E.O.  Pursuant  to  Section  302  of  the
                  Sarbanes-Oxley Act of 2002
    31.2          Certification  of  Principal  Accounting  Officer  Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002
    32.1          Certification of C.E.O. Pursuant to 18 U.S.C. Section 1350, as
                  Adopted Pursuant to Section 906 of the  Sarbanes-Oxley  Act of
                  2002
    32.2          Certification of Principal  Accounting  Officer Pursuant to 18
                  U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002

----------------
     * Previously filed as an Exhibit to the Form 10-SB filed July 28, 2000.

         (b) No  report on Form 8-K was  during  the three  month  period  ended
             December 31, 2001.

             On  June 8,  2004,  Calypso  filed a  Current  Report  on Form  8-K
             reporting under Item.4 the change in certifying accountant.

Item 14.     Principal Accountant Fees and Services

     We do not  have an audit  committee  and as a result  our  entire  board of
directors performs the duties of an audit committee. Our board of directors will
approve in advance the scope and cost of the engagement of an auditor before the
auditor  renders audit and non-audit  services.  As a result,  we do not rely on
pre-approval policies and procedures.

     We do not  have an audit  committee  and as a result  our  entire  board of
directors performs the duties of an audit committee. Our board of directors will
approve in advance the scope and cost of the engagement of an auditor before the
auditor  renders audit and non-audit  services.  As a result,  we do not rely on
pre-approval policies and procedures.

     Audit Fees

     The aggregate fees billed by our independent auditors, Chisholm, Bierwolf &
Nilson, for professional services rendered for the audit of our annual financial
statements  included  in our Annual  Reports on Form  10-KSB for the years ended
December 31, 2001 and 2000, and for the review of quarterly financial statements
included in our  Quarterly  Reports on Form 10-QSB for the quarters  ended March
31, June 30 and September 30, 2001, were $3,000.

     Audit Related Fees

     For the years ended  December 31, 2001 and 2000,  there were no fees billed
for assurance and related  services by Chisholm,  Bierwolf & Nilson  relating to
the performance of the audit of our financial  statements which are not reported
under the caption "Audit Fees" above.
                                      -22-
<PAGE>

     Tax Fees

     For the years  ended  December  31,  2001 and 2000,  no fees were billed by
Chisholm, Bierwolf & Nilson for tax compliance, tax advice and tax planning.

     We do not use Chisholm,  Bierwolf & Nilson for financial information system
design  and   implementation.   These  services,   which  include  designing  or
implementing  a system that  aggregates  source data  underlying  the  financial
statements  or  generates  information  that  is  significant  to our  financial
statements,  are provided  internally or by other service  providers.  We do not
engage Chisholm, Bierwolf & Nilson to provide compliance outsourcing services.

     The board of directors has  considered the nature and amount of fees billed
by Chisholm,  Bierwolf & Nilson and believes  that the provision of services for
activities  unrelated  to the audit is  compatible  with  maintaining  Chisholm,
Bierwolf & Nilson's independence.

                                      -23-
<PAGE>


                                   SIGNATURES

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

                                           Calypso Financial Services, Inc.



                                           By:     /S/   EDWARD F. COWLE
                                           ----------------------------------
                                                   Edward F. Cowle
                                                   President and C.E.O.

Dated:   September 29, 2004


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

           Signature                                             Title                       Date
           ---------                                             -----                       ----




<S>                                             <C>                                    <C>
/S/    EDWARD F. COWLE                          President, C.E.O. and director         September 29, 2004
-----------------------------------------       (Principal Accounting Officer)
         Edward F. Cowle



                                                                                       September 29, 2004
/S/    J. ROCKWELL SMITH                        Chairman and Director
----------------------------------------
         J. Rockwell Smith



/S/    GEOFF WILLIAMS                           Secretary and Director                 September 29, 2004
----------------------------------------
         Geoff Williams
</TABLE>

                                      -24-

<PAGE>






                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                                December 31, 2001









                                       F-1

<PAGE>

                                 C O N T E N T S


Independent Auditors' Report ............................................. F-3

Balance Sheet............................................................. F-4

Statements of Operations ................................................. F-6

Statements of Stockholders' Equity (Deficit) ............................. F-7

Statements of Cash Flows ................................................. F-9

Notes to the Financial Statements ........................................F-11



                                       F-2

<PAGE>

                           Chisholm, Bierwolf & Nilson
                          Certified Public Accountants
A Limited Liability      533 West 2600 South, Suite 250
Company                      Bountiful, Utah  84010
                                                           Office (801) 292-8756
                                                           Fax (801) 292-8809

--------------------------------------------------------------------------------

                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------

To the Board of Directors and Stockholders of
Calypso Financial Services, Inc.

We have audited the accompanying  balance sheet of Calypso  Financial  Services,
Inc.  as of  December  31,  2001  and  the  related  statements  of  operations,
stockholders'  equity and cash flows for the years ended  December  31, 2001 and
2000  and from  inception  on July 27,  1999  through  December  31,  2001.  The
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Calypso Financial
Services,  Inc. as of December 31, 2001 and the results of  operations  and cash
flows for the years ended  December 31, 2001 and 2000 and from inception on July
27, 1999 through  December 31, 2001 in  conformity  the  Standards of the Public
Company Accounting Oversight Board (United States).

Th  accompanying  financial  statements  have been  prepared  assuming  that the
Company will continue as a going concern.  As discussed in Note 2, the Company's
operating  loss and lack of working  capital raise  substantial  doubt about its
ability to continue as a going  concern.  Management's  plans in regard to those
matters are also  described in Note 2. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.



/s/ Chisholm, Bierwolf & Nilson, LLC
---------------------------------------
Bountiful, Utah
June 29, 2004



           A Member of the AICPA, UACPA and the PCAOB Practice Section


                                       F-3

<PAGE>



                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                                  Balance Sheet


                                     ASSETS
                                     ------

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

CURRENT ASSETS

  Cash                                                           $      500
                                                                 ----------
    Total Current Assets                                                500
                                                                 ----------

    TOTAL ASSETS                                                 $      500
                                                                 ==========




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


                                       F-4

<PAGE>



                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                            Balance Sheet (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

                                                                  December 31,
                                                                      2001
                                                                   ----------
CURRENT LIABILITIES

  Due to shareholder                                               $      904
                                                                   ----------

   Total Current Liabilities                                              904
                                                                   ----------

STOCKHOLDERS' EQUITY (DEFICIT)
 Common stock; 20,000,000 shares authorized at
  $0.00001 par value, 1,500,000 shares
  issued and outstanding, respectively                                     15
Additional paid in capital                                                485
Deficit accumulated during the development stage                         (904)
                                                                   ----------
    Total Stockholders' Equity (Deficit)                                 (404)
                                                                   ----------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
     (DEFICIT)                                                     $      500
                                                                   ==========












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


                                       F-5

<PAGE>


                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                            Statements of Operations


                                                           From
                                                       Inception on
                               For the Year Ended        July 27,
                               December 31, 1999         Through
                            ------------------------   December 31,
                              2001           2000         2001
                           -----------    ----------   -----------
REVENUES                   $      --      $     --     $      --

EXPENSES                           904          --             904
                           -----------    ----------   -----------
LOSS FROM OPERATIONS              (904)         --            (904)

   Income taxes                   --            --            --
                           -----------    ----------   -----------
NET LOSS                   $      (904)   $     --     $      (904)
                           ===========    ==========   ===========

BASIC NET LOSS PER SHARE   $     (0.00)   $     0.00
                           ===========    ==========
WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING      1,500,000     1,500,000
                           ===========    ==========





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


                                       F-6

<PAGE>

<TABLE>
<CAPTION>
                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Deficit)
            From Inception on July 27, 1999 through December 31, 2001
                                                                                     Deficit
                                                                                   Accumulated
                            Common Stock               Additional      Stock       During the
                          -------------------------     Paid in    Subscription    Development
                            Shares        Amount        Capital      Receivable       Stage
                          -----------   -----------   -----------   -----------    -----------
<S>                       <C>           <C>           <C>           <C>            <C>
Balance at inception of
the development stage on
July 27, 1999                    --     $      --     $      --     $      --      $      --

Common stock issued for
cash on September 8,
1999 at $0.0003
per share                   1,500,000            15           485          (500)          --

Net loss for the period
July 27, 1999 through
December 31, 1999                --            --            --            --             --
                          -----------   -----------   -----------   -----------    -----------
Balance, December 31,
1999                        1,500,000            15           485          (500)          --

Net loss for the year
ended December 31, 2000          --            --            --            --             --
                          -----------   -----------   -----------   -----------    -----------
Balance, December 31,
2000                        1,500,000            15           485          (500)          --
                          -----------   -----------   -----------   -----------    -----------
Cash received for
Stock subscription               --            --            --             500           --

Net loss for the
year ended
December 31,2001                 --            --            --            --             (904)
                          -----------   -----------   -----------   -----------    -----------
Balance, December 31,       1,500,000   $        15   $       485   $      --      $      (904)
2001                      ===========   ===========   ===========   ===========    ===========
</TABLE>




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


                                       F-7

<PAGE>

<TABLE>
<CAPTION>

                                                                        From
                                                                    Inception on
                                            For the Year Ended        July 27,
                                               December 31,         1999 Through
                                        --------------------------  December 31,
                                            2001           2000         2001
                                        -----------    -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                     <C>            <C>           <C>
  Net loss                              $      (904)   $      --     $      (904)
  Adjustments to reconcile net
   cash used by operating activities:
  Changes in operating assets and
   liabilities:
 Increase in due to shareholder                 904           --             904
                                        -----------    -----------   -----------
  Net Cash Used by
   Operating Activities                        --             --            --
                                        -----------    -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES           --             --            --
                                        -----------    -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES

  Sale of common stock                         --             --             500
                                        -----------    -----------   -----------
  Net Cash Provided by
   Financing Activities                        --             --             500
                                        -----------    -----------   -----------
NET DECREASE IN CASH                           --             --             500

CASH AT BEGINNING OF PERIOD                    --             --            --
                                        -----------    -----------   -----------
CASH AT END OF PERIOD                   $      --      $      --     $       500
                                        ===========    ===========   ===========
</TABLE>






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


                                       F-8

<PAGE>



                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                      Statements of Cash Flows (continued)


                                                                      From
                                                                  Inception on
                                            For the Year Ended       July 27,
                                               December 31,       1999 Through
                                         -----------------------  December 31,
                                            2001         2000         2001
                                         ----------   ----------   -----------

SUPPLEMENTAL DISCLOSURES OF
 CASH FLOW INFORMATION

CASH PAID FOR:

    Interest                             $     --     $    --      $     --
    Income Taxes                         $     --     $    --      $     --


NON CASH FINANCING ACTIVITIES

    None






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


                                       F-9

<PAGE>
                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT
              ACCOUNTING POLICIES

         a. Business and Organization

         The Company was organized in the State of Delaware on July 27, 1999.


         b. Accounting Method

         The  Company's  financial  statements  are  prepared  using the accrual
         method of accounting. The Company has elected a December 31 year-end.

         c. Cash and Cash Equivalents

         For purposes of financial statement presentation, the Company considers
         all highly liquid  investments with a maturity of three months or less,
         from the date of purchase, to be cash equivalents.

         d. Use of Estimates

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

         e. Revenue Recognition

         The Company  currently has no source of revenues.  Revenue  recognition
         policies will be determined when principal operations begin.

         f. Basic Loss Per Share

         The Computation of basic loss per share of common stock is based on the
         weighted average number of shares outstanding during the period.

                                                    For the Years Ended
                                                       December 31,
                                                --------------------------
                                                   2001           2000
                                                -----------    -----------

         Loss (numerator)                       $      (904)   $      --
         Shares (denominator)                     1,500,000      1,500,000
                                                -----------    -----------

         Per share amount                       $     (0.00)   $    (0.00)
                                                ===========    ==========

                                      F-10

<PAGE>

                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2001 and 2000

         NOTE 1 - ORGANIZATION  AND SUMMARY OF SIGNIFICANT  ACCOUNTING  POLICIES
                  (Continued)

         g. Income Taxes

         Deferred taxes are provided on a liability  method whereby deferred tax
         assets  are  recognized  for  deductible   temporary   differences  and
         operating   loss  and  tax  credit   carryforwards   and  deferred  tax
         liabilities are recognized for taxable temporary differences. Temporary
         differences are the differences  between the reported amounts of assets
         and liabilities and their tax bases. Deferred tax assets are reduced by
         a valuation  allowance  when, in the opinion of management,  it is more
         likely  than not that some  portion or all of the  deferred  tax assets
         will to be realized.  Deferred tax assets and  liabilities are adjusted
         for the  effects  of  changes  in tax  laws  and  rates  on the date of
         enactment.

         Net  deferred  tax assets  consist of the  following  components  as of
         December 31, 2001 and 2000:

                                       2001           2000
                                    -----------    -----------

         Deferred tax assets:
           NOL Carryover            $       353    $      --

         Valuation allowance               (353)          --
                                    -----------    -----------

           Net deferred tax asset   $      --      $      --
                                    ===========    ===========

         The  income  tax  provision  differs  from the  amount  of  income  tax
         determined  by applying the U.S.  federal and state income tax rates of
         39% to pretax  income from  continuing  operations  for the years ended
         December 31, 2001 and 2000 due to the following:

                                        2001           2000
                                    -----------    -----------


         Book Income                $      (904)   $      --
         Valuation allowance                904           --
                                    -----------    -----------

                                    $      --      $      --
                                    ===========    ===========

         At December 31, 2001, the Company had net operating loss  carryforwards
         of approximately  $900 that may be offset against future taxable income
         through 2021. No tax benefit has been reported in the December 31, 2001
         financial  statements  since the  potential  tax benefit is offset by a
         valuation allowance of the same amount.

         Due to the  change in  ownership  provisions  of the Tax  Reform Act of
         1986,  net  operating  loss  carry  forwards  for  Federal  income  tax
         reporting purposes are subject to annual  limitations.  Should a change
         in ownership occur, net operating loss  carryforwards may be limited as
         to use in future years.
                                      F-11
<PAGE>
                        CALYPSO FINANCIAL SERVICES, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2001 and 2000

         NOTE 2 - GOING CONCERN

         The  Company's  financial   statements  are  prepared  using  generally
         accepted  accounting   principles  in  the  United  States  of  America
         applicable to a going concern which  contemplates  the  realization  of
         assets and liquidation of liabilities in the normal course of business.
         The  Company  has not yet  established  an ongoing  source of  revenues
         sufficient to cover its  operating  costs and allow it to continue as a
         going  concern.  The  ability  of the  Company to  continue  as a going
         concern is dependent on the Company obtaining  adequate capital to fund
         operating losses until it becomes profitable.  If the Company is unable
         to obtain adequate capital, it could be forced to cease operations.

         In order to continue as a going concern,  the Company will need,  among
         other  things,  additional  capital  resources.  Management's  plans to
         obtain such  resources for the Company  include (1)  obtaining  capital
         from  management and  significant  shareholders  sufficient to meet its
         minimal operating expenses, and (2) seeking out and completing a merger
         with an existing operating company. However,  management cannot provide
         any assurances that the Company will be successful in accomplishing any
         of its plans.

         The ability of the Company to continue as a going  concern is dependent
         upon its ability to successfully  accomplish the plans described in the
         preceding  paragraph and  eventually  secure other sources of financing
         and attain profitable operations. The accompanying financial statements
         do not include any  adjustments  that might be necessary if the Company
         is unable to continue as a going concern.

         NOTE 3-RELATED PARTY TRANSACTIONS

         During the years ended December 31, 2001 and 2000, the Company incurred
         various general and administrative expenses. As the Company has not had
         the  wherewithal  to pay these  expenses,  the  Company has relied on a
         related party to satisfy its debts. As of December 31, 2001 the Company
         had an obligation to a stockholder totaling $904.



                                      F-12