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

                                   FORM 10-KSB







 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
  OF 1934  For the fiscal year ended June 30, 2001
                                     -------------

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934  For the transition period from                 to
                                             -----------------  ----------------

Commission File Number: 000-28033
                        ---------


                        Fuzzy Logic Software Corporation
                        --------------------------------
             (Exact name of registrant as specified in its charter)

Delaware                                                             33-0880355
                                                                     ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

505 Burrard Street, Suite 680, Vancouver, British Columbia, Canada      V7X 1M4
-------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

                                 (604) 688-5180
                                 --------------
              (Registrant's Telephone Number, Including Area Code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.[X] Yes [ ] No

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


State issuer's revenues for its most recent fiscal year. $0.00

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) As of October 15, 2001, approximately $2,364,855.

As of October 15, 2001, there were 6,975,456 shares of the issuer's $.0001 par
value common stock issued and outstanding.

Documents incorporated by reference. There are no annual reports to security
holders, proxy information statements, or any prospectus filed pursuant to Rule
424 of the Securities Act of 1933 incorporated herein by reference.

Transitional Small Business Disclosure format (check one):

                      [ ]  Yes     [ ]  No





                                       1
<PAGE>



                                     PART I


Item 1. Description of Business.
-------------------------------

Our Business. Fuzzy Logic Software Corporation, a Delaware corporation, was
incorporated in the State of Delaware on or about August 25, 1997. Our executive
offices are located at 505 Burrard Street, Suite 680, Vancouver, British
Columbia, Canada. Our telephone number is 604.688.5180.

We were originally incorporated for the purpose of developing software programs
and manufacturing control boards and computer chips for "Fuzzy Logic" control
applications. Fuzzy Logic is a computer modeling language that recognizes
multi-valued states between zero and one, thereby allowing computers to
represent or manipulate terms with greater complexity; and to exercise
"human-like" judgment in the automation of sophisticated tasks. This system
eliminates the on/off rigidity typical of computer control systems and results
in more flexible and subtle process controls. On September 16, 1997, FZZ, Inc.,
a Colorado corporation ("FZZ") was merged into and with us. Prior to the merger,
FZZ had not conducted any operations. In July 1999, our management changed and
new management decided to establish an environmental remediation business.

On January 16, 2001, we entered into a non-binding letter of intent pursuant to
which we intended to acquire Free Trade Medical Network, Inc. Upon closing of
the acquisition, we were to issue 23,000,000 shares of non-voting common stock
for all of the outstanding shares of Free Trade Medical Network, Inc. The Letter
of Intent further provided that those shares of non-voting common stock may be
exchanged for voting shares of common stock if the following performance test
was met:

Free Trade Medical Network, Inc.'s operations shall, (i) provide confirmation
that financing of at least $500,000 Canadian has been arranged for corporate
use; and (ii) in the one-year period following the signing of formal
documentation, generate positive earnings before taxes, determined in accordance
with generally accepted Canadian accounting principles, for one complete
financial quarter to be reflected in the form of an audited financial statement.
The audited financial statement must further contain a note to the effect that
there are written contracts in place sufficient to support projections of
operational performance for a full year generating positive net income. The
proposed merger was to be complete upon conversion of the nonvoting shares into
voting shares.

Although we have entered into a letter of intent with Free Trade Medical
Network, Inc., we terminated the letter of intent and a Share Purchase Agreement
we entered into with Free Trad Medical Network, Inc. on August 31, 2001. Our
failure to consummate the acquisition of Free Trade Medical Network, Inc., will
significantly affect our financial performance. We will continue to seek other
merger candidates. We believe that acquisitions and joint ventures will be
necessary to obtain the proper expertise and complimentary services with firms
able to provide services which will support our future operation.

Item 2.  Description of Property.
---------------------------------

Our Facilities. At this time, we occupy facilities provided by our Canadian
securities counsel at no charge to us. This office space is located at 505
Burrard Street, Suite 680, Vancouver, British Columbia, Canada.

Item 3.  Legal Proceedings.
--------------------------

We are not aware of any pending litigation nor do we have any reason to believe
that any such litigation exists.

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

Not applicable.




                                       2
<PAGE>



                                     PART II

Item 5.  Market Price for Common Equity and Related Stockholder Matters.
-----------------------------------------------------------------------

Reports to Security Holders. We are a reporting company with the Securities and
Exchange Commission. The public may read and copy any materials filed with the
SEC at the SEC's Public Reference Room at 450 Fifth Street N.W., Washington,
D.C. 20549. The public may also obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. The address
of that site is http://www.sec.gov.

Prices of Common Stock. We participate in the OTC Bulletin Board, an electronic
quotation medium for securities traded outside of the Nasdaq Stock Market, and
prices for our common stock are published on the OTC Bulletin Board under the
trading symbol "FZZY.OB". This market is extremely limited and the prices quoted
are not a reliable indication of the value of our common stock. As of October
15, 2001 we had a low bid price of $0.33 and a high bid price of $0.34. Over the
last 52 weeks, our common stock had a low bid price of $0.21 per share and a
high bid price of $0.58 per share. The bid price is currently approximately
$0.35 per share.

The following table specifies the reported high and low closing prices of our
common stock on the OTCBB for the periods indicated. Quotations reflect quotes
for inter-dealer prices, without retail mark-up, mark down or commissions and
may not represent actual transactions.

===================================== ================== ======================
                       Period                High                   Low
------------------------------------- ------------------ ----------------------
April 1, 2001 - June 30, 2001                $0.45                 $0.29
------------------------------------- ------------------ ----------------------
January 1, 2001 - March 31, 2001             $.58                  $0.28
------------------------------------- ------------------ ----------------------
October 1, 2000 - December 31, 2000          $0.50                 $0.21
------------------------------------- ------------------ ----------------------
July 1, 2000 - September 30, 2000            $0.74                 $0.25
===================================== ================== ======================

We are authorized to issue 30,000,000 shares of $.0001 par value common stock,
each share of common stock having equal rights and preferences, including voting
privileges. As of October 11, 2001, 6,975,456 shares of our common stock were
issued and outstanding. We are also authorized to issue 5,000,000 shares of
$.0001 par value preferred stock, none of which is issued and outstanding.

Common Stock. The holders of our common stock are entitled to one vote for each
share held of record on all matters to be voted on by those shareholders. In the
event of liquidation, dissolution, or winding up of the Company, the holders of
our common stock are entitled to share ratably in all assets remaining available
for distribution to them after payment of our liabilities and after provision
has been made for each class of stock, if any, having preference over our common
stock. Holders of shares of our common stock, as such, have no conversion,
preemptive or other subscription rights, and there are no redemption provisions
applicable to our common stock.

Non-Cumulative Voting. The holders of shares of our common stock do not have
cumulative voting rights, which means that the holders of more than 50% of our
outstanding common stock, voting for the election of our directors, may elect
all of our directors to be elected, if they so desire, and, in such event, the
holders of our remaining common stock may not be able to elect any of our
directors.

Registration Rights. Existing holders of shares of our common stock are not
entitled to rights with respect to the registration of such shares under the
Securities Act.

Dividends. The payment by us of dividends, if any, in the future, shall be
determined by our Board of Directors, in its discretion, and will depend on,
among other things, our earnings, our capital requirements, and our financial
condition, as well as other relevant factors. We have not paid or declared any
dividends to date. Holders of common stock are entitled to receive dividends as
declared and paid from time to time by our Board of Directors from funds legally
available. We intend to retain any earnings for the operation and expansion of
our business. We continue to operate at a loss and, therefore,do not anticipate
paying cash dividends in the foreseeable future.




                                       3
<PAGE>





Penny Stock Regulation. Shares of our common stock are subject to rules adopted
by the Securities and Exchange Commission that regulate broker-dealer practices
in connection with transactions in "penny stocks". Penny stocks are generally
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in those securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Securities and Exchange Commission, which
contains the following:

     o    a description of the nature and level of risk in the market for penny
          stocks in both public offerings and secondary trading;
     o    a description of the broker's or dealer's duties to the customer and
          of the rights and remedies available to the customer with respect to
          violation to such duties or other requirements of securities' laws;
     o    a brief, clear, narrative description of a dealer market, including
          "bid" and "ask" prices for penny stocks and the significance of the
          spread between the "bid" and "ask" price;
     o    a toll-free telephone number for inquiries on disciplinary actions;
     o    definitions of significant terms in the disclosure document or in the
          conduct of trading in penny stocks; and o such other information and
          is in such form (including language, type, size and format), as the
          Securities and Exchange Commission shall require by rule or
          regulation.

Prior to effecting any transaction in penny stock, the broker-dealer also must
provide the customer the following:

     o    the bid and offer quotations for the penny stock;
     o    the compensation of the broker-dealer and its salesperson in the
          transaction;
     o    the number of shares to which such bid and ask prices apply, or other
          comparable information relating to the depth and liquidity of the
          market for such stock; and
     o    monthly account statements showing the market value of each penny
          stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for a stock that becomes subject to the penny stock rules.
Holders of shares of our common stock may have difficulty selling those shares
because our common stock will probably be subject to the penny stock rules.

Item 6.  Management's Discussion and Analysis of Financial Condition or
Plan of Operation.
-----------------------------------------------------------------------

This following information specifies certain forward-looking statements of
management of the company. Forward-looking statements are statements that
estimate the happening of future events and are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as "may", "shall", "will", "could", "expect", "estimate",
"anticipate", "predict", "probable", "possible", "should", "continue", or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.

The assumptions used for purposes of the forward-looking statements specified in
the following information represent estimates of future events and are subject
to uncertainty as to possible changes in economic, legislative, industry, and
other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and, accordingly, no opinion is expressed
on the achievability of those forward-looking statements. No assurance can be
given that any of the assumptions relating to the forward-looking statements
specified in the following information are accurate, and we assume no obligation
to update any such forward-looking statements.




                                       4
<PAGE>




Liquidity. We have been in the development stage since August 25, 1997
(inception). As of June 30, 2001, we had total assets of $35,725. In
anticipation of the transaction with The Anvil Group, Inc., we advanced $68,650
to The Anvil Group, Inc. and Anthony Humble and $36,024 to Anthony Humble,
individually, pursuant to two (2) promissory notes, each dated June 27, 2000.
The uncollateralized notes bear interest at ten percent (10%) and the principal
and interest are due on December 24, 2000. While we believe The Anvil Group,
Inc. and Anthony Humble have the financial capacity to satisfy these note
obligations, the notes are past due and one payment of principal and interest of
$13,333 has been received on only one of the notes. We are unsure if additional
payments will be received and cannot guaranty that those notes will be paid.

At June 30, 2001, we had total liabilities of $255,735, the majority of which is
represented by $239,367 due to a related party, Cascade, Inc., which was one of
our former major shareholders. At inception, we entered into a fee and cost
reimbursement arrangement with this former major shareholder. In connection with
this arrangement, a management fee of $100,000 is charged to us each year.

We are not aware of any trends, demands, commitments or uncertainties that will
result in our liquidity decreasing or increasing in a material way. We believe
that from our cash resources at June 30, 2001, which totaled $35,725, we will be
able to maintain our current operations. However, should these resources prove
to be insufficient, we may be required to raise additional funds or arrange for
additional financing over the next 12 months to adhere to our development
schedule. No assurance can be given, however, that we will have access to
additional cash in the future, or that funds will be available on acceptable
terms to satisfy our cash requirements.

Results of Operations. As of June 30, 2001, we have not yet realized any revenue
from operations. The Statement of Operations for the fiscal year ended June 30,
2001 specifies a net loss of $268,315.

Our success is materially dependent upon our ability to satisfy additional
financing requirements. We are reviewing our options to raise substantial equity
capital. We cannot presently estimate when we will begin to realize revenues. In
order to satisfy our capital requirements, management has held and continues to
conduct negotiations with various investors. We anticipate that these
negotiations will result in additional investments in the company. To achieve
and maintain competitiveness, we may be required to raise additional substantial
funds. We anticipate that we will need to raise significant capital to develop,
promote and conduct our operations. Such capital may be raised through public or
private financing as well as borrowing and other sources. There can be no
assurance that funding for our operations will be available under favorable
terms, if at all. If adequate funds are not available, we may be required to
curtail operations significantly or to obtain funds by entering into
arrangements with collaborative partners.

Our Plan of Operation For Next 12 Months. On January 16, 2001, we entered into a
non-binding Letter of Intent pursuant to which we intended to acquire Free Trade
Medical Network, Inc. However, we failed to consummate the acquisition of Free
Trade Medical Network, Inc., which will significantly affect our financial
performance. We will continue to seek other merger candidates. We believe that
acquisitions and joint ventures will be necessary to obtain the proper expertise
and complimentary services with firms able to provide services which will
support our future operation.

We are not currently conducting any research and development activities. We do
not anticipate conducting any other such activities in the next twelve months.
We do not anticipate that we will purchase or sell any significant equipment in
the next six to twelve months unless we generate significant revenues.

We do not anticipate that we will hire any employees in the next six to twelve
months, unless we generate significant revenues. We believe our future success
depends in large part upon the continued service of our key personnel.

Changes in Number of Employees. During the next 12 months, depending on the
success of our proposed operations, we may be required to hire additional
employees; however, we are not able to provide a reasonable estimate of the
number of such additional employees which may be required at this time.




                                       5
<PAGE>




Item 7.  Financial Statements
-----------------------------





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                              Financial Statements

                             As of June 30, 2001 and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001








                                       6
<PAGE>





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                        Index to the Financial Statements
                             As of June 30, 2001and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001





     Report of Independent Auditors ..........................................1

     Financial Statements of Fuzzy Logic Software Corporation:

         Balance Sheet, June 30, 2001.........................................2

         Statements  Of  Operations  for each of the Two Years in the Period
          Ended June 30, 2001 and for the Period from August 25, 1997
         (Inception) to June 30, 2001.........................................3

         Statements Of Shareholders' Deficit for each of the Two Years in the
          Period Ended June 30, 2001 and for the Period from August 25, 1997
         (Inception) to June 30, 2001.........................................4

         Statements  of Cash  Flows for each of the Two Years in the Period
          Ended June 30,  2001 and for the Period from August 25, 1997
         (Inception) to June 30, 2001.........................................5

     Notes to Financial Statements............................................7







                                       7
<PAGE>








                         REPORT OF INDEPENDENT AUDITORS


To the Board of Directors
Fuzzy Logic Software Corporation

We have audited the accompanying balance sheet of Fuzzy Logic Software
Corporation (a development stage company) as of June 30, 2001, and the related
statements of operations, shareholders' deficit, and cash flows for each of the
two years ended June 30, 2001 and for the period from August 25, 1997
(inception) to June 30, 2001. These financial statements are the responsibility
of the company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fuzzy Logic Software
Corporation (a development stage company) as of June 30, 2001 and 2000, and the
results of its operations and its cash flows for each of the two years ended
June 30, 2001 and for the period from August 25, 1997 (inception) to June 30,
2001 in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has no operations, products, or facilities,
significant resources will be required to implement its plan of operations, and
it relies on a related party and sale of the Company's equity securities to meet
its cash flow requirements, thereby raising substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters is
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.





Kelly & Company
Newport Beach, California
October 12, 2001





                                       8
<PAGE>





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                                  Balance Sheet
                                 June 30, 2001
--------------------------------------------------------------------------------


                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                                                           <C>
Current assets:
Cash                                                                                      $       35,725
Notes receivable, net of allowance for uncollectible
notes of $115,125                                                                                      -
                                                                                          ---------------
Total  assets                                                                             $       35,725
                                                                                          ===============

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Accrued liabilities                                                                       $       16,368
Due to related party                                                                             239,367
                                                                                          ---------------
Total liabilities                                                                                255,735
                                                                                          ---------------

Shareholders' deficit:
Common stock, $.0001 par value;
30,000,000 shares authorized; 6,975,456 shares issued and outstanding at June 30, 2001               698
Preferred stock, $.0001 par value;
 5,000,000 shares authorized, none issued and outstanding at June 30, 2001                             -
Additional paid-in capital                                                                       457,467
       Deficit accumulated during the development stage                                         (678,175)
                                                                                          ---------------
Total shareholders' deficit                                                                     (220,010)
                                                                                          ---------------
Total liabilities and shareholders' deficit                                               $       35,725
                                                                                          ===============
</TABLE>









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

                                       9
<PAGE>





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                            Statements of Operations
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001

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

<TABLE>
<CAPTION>
                                                                                                    Period from
                                                                For the            For the        August 25, 1997
                                                              Year Ended         Year Ended       (Inception) to
                                                             June 30, 2001      June 30, 2000      June 30, 2001
                                                           ------------------  ----------------  ------------------
<S>                                                               <C>                 <C>               <C>
Revenues                                                                   -                 -                   -
Cost of revenues                                                           -                 -                   -
                                                           ------------------  ----------------  ------------------
Gross profit                                                               -                 -                   -
Consulting fees                                            $         100,000    $      130,860   $         430,860
Organization costs                                                         -                 -               5,000
Legal and accounting                                                  56,539            37,450              94,217
Settlement expense                                                         -            10,000              10,000
Provision for uncollectible notes receivable                         115,125                 -             115,125
Loss on investment                                                         -                 -                 175
General and administrative expenses                                    7,608            14,156              27,412
                                                           ------------------  ----------------  ------------------
Total operating costs                                                279,272           192,466             682,789
Interest income                                                      (10,957)              (25)            (10,982)
                                                           ------------------  ----------------  ------------------
Net loss                                                   $         268,315    $      192,441   $        671,807
                                                           ==================  ================  ==================

Loss per common share - basic and diluted                  $            0.05    $         0.04   $           0.11
                                                           ==================  ================  ==================
</TABLE>



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

                                       10
<PAGE>






                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                       Statements of Shareholders' Deficit
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001

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

<TABLE>
<CAPTION>
<S>                                        <C>          <C>       <C>        <C>      <C>     <C>            <C>          <C>
                                                                                                                        Deficit
                                                                                              Price     Additional   Accumulated
                                         Preferred   Preferred   Common     Per    Common    Paid-in    Development    During
                                           Shares       Stock    Shares    Share    Stock    Capital       Stage        Total
                                         --------- ---------- ----------- -------  -------  ---------  ------------ ------------
Formation of corporation, August 25, 1997     -          -             -                -          -             -            -
Common shares issued to the founders
of the Company                                -          -     5,075,456            $ 508    $ 4,667             -     $ 5,175
Purchase and retirement  of common
stock                                         -          -    (1,000,000)            (100)      (900)            -      (1,000)
Net loss                                      -          -             -                -          -    $ (111,636)    (111,636)
                                                              -----------          -------  ---------  ------------ ------------
Balance, June 30, 1998                        -          -     4,075,456              408      3,767      (111,636)    (107,461)
Net loss                                      -          -             -                -          -      (105,783)    (105,783)
                                                              -----------          -------  ---------  ------------ ------------
Balance, June 30, 1999                        -          -     4,075,456              408      3,767      (217,419)    (213,244)
Common shares issued in a private
placement offering, net of offering
costs                                         -          -       500,000   $0.50       50    213,940             -     213,990
Net loss                                      -          -             -                -          -      (192,441)    (192,441)
                                                              -----------          -------  ---------  ------------ ------------
Balance, June 30, 2000                        -          -     4,575,456              458    217,707      (409,860)    (191,695)
Common shares issued in a
private placement                             -          -     2,400,000   $0.10      240    239,760             -     240,000
Net loss                                      -          -             -                -          -      (268,315)    (268,315)
                                                              -----------          -------  ---------  ------------ ------------
Balance, June 30, 2001                        -          -     6,975,456            $ 698    457,467    $ (678,175)  $ (220,010)
                                                              ===========          =======  =========  ============ ============
</TABLE>




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

                                       11
<PAGE>







                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                            Statements of Cash Flows
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                               <C>                   <C>                  <C>

                                                                                                         Period from
                                                                 For the              For the          August 25, 1997
                                                               Year Ended            Year Ended        (Inception) to
                                                              June 30, 2001        June 30, 2000        June 30, 2001
                                                            ------------------    -----------------   ------------------
Cash flows from operating activities:
Net loss                                                     $       (268,315)     $      (192,441)    $       (671,807)
Adjustments to reconcile net loss to net cash
used in operating activities:
Shares issued to founders of the Company                                    -                    -                5,175
Provision for uncollectible notes receivable                          115,125                    -              115,125
Shares reacquired                                                           -                    -               (1,000)
Loss on investment                                                          -                    -                    -
Increase (decrease)  in liabilities:
Accrued liabilities                                                    13,118                2,037               10,000
Due to related party                                                  (57,664)              85,000              239,367
                                                            ------------------    -----------------   ------------------
Cash used in operating activities                                    (197,736)            (105,404)            (303,140)
                                                            ------------------    -----------------   ------------------
Cash flows provided by investing activities:
Increase in notes receivable                                          (10,451)            (104,674)            (115,125)
                                                            ------------------    -----------------   ------------------
Cash provided by investing activities                                 (10,451)            (104,674)            (115,125)
                                                            ------------------    -----------------   ------------------
Cash flows provided by financing activities
Proceeds from the issuance of common stock                            240,000              213,990              453,990
                                                            ------------------    -----------------   ------------------
Cash used in financing activities                                     240,000              213,990              453,990
                                                            ------------------    -----------------   ------------------
Net increase (decrease) in cash                                        31,813                3,912               35,725
Cash at beginning of period                                             3,912                    -                    -
                                                            ------------------    -----------------   ------------------
Cash at end of period                                        $         35,725      $         3,912     $         35,725
                                                            ==================    =================   ==================
</TABLE>





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

                                       12
<PAGE>





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                          Notes to Financial Statements

                             As of June 30, 2001 and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001
-------------------------------------------------------------------------------


1.   Development Stage Operations
     ----------------------------

     Fuzzy Logic Software Corporation (a development stage company) (the
     "Company") was incorporated in the state of Delaware on August 25, 1997. It
     has no operating history, no revenues, no products nor technology. The
     Company's initial business plan anticipated the development of computer
     hardware and software. As such, the Company is subject to the risks and
     uncertainties associated with a new business. The Company has historically
     relied on advances from Cascade, Inc., a related party (Note 6) and sales
     of the Company's equity securities to meet its cash flow requirements.
     However, in the event Cascade, Inc. should be unable to continue to satisfy
     the cash flow requirements or not be able to sell adequate amounts of
     equity securities, the Company's ability to continue as a going concern
     could be adversely affected. The success of the Company's future operation
     is dependent upon the Company's ability to successfully develop and market
     its yet unidentified products, obtain the additional capital necessary to
     implement operations and achieve profitability and/or merge with a
     profitable operating entity with greater resources. There can be no
     assurance that any of these potential alternatives will materialize. The
     financial statements do not include any adjustments that might result from
     the outcome of this uncertainty.


     In this connection, during fiscal year ended June 30, 2000, the Company
     entered into a letter of intent to acquire all of the issued and
     outstanding shares of The Anvil Group, Inc. However, in September 2000, the
     transaction was terminated due to the inability to obtain financing.


     In December 2000, the Company executed a letter of intent to merge with
     Free Trade Medical Network, Inc. ("FTMN"). The merger was subject to
     completion of due diligence by each company and execution of the formal
     merger agreement documentation. The transaction provided for the Company to
     issue 23,000,000 shares of its nonvoting common stock in exchange for all
     the 11,500,000 issued and outstanding shares of FTMN. The nonvoting shares
     were to be convertible into the Company's voting common stock upon FTMN
     either (1) providing the Company during its due diligence process,
     confirmation that financing of at least $500,000 Canadian has been arranged
     for corporate use or (2) during the one-year period following the execution
     of the formal merger agreement documentation FTMN generated positive
     earnings before taxes for one complete fiscal quarter reflected in an
     audited financial statement determined in accordance with Canadian
     generally accepted accounting principles. In addition, these financial
     statements were to contain a note stating that FTMN has written contracts
     in place sufficient to support projections of operational performance for a
     full year generating positive net income. Upon conversion of the nonvoting
     shares to voting shares, the merger would be complete. However, should the
     then merged company resolve to consolidate or rollback the issued capital
     of the merged company, it was required to issue such additional shares to
     the original shareholders of Fuzzy Logic Software Corporation prior to the
     merger sufficient to maintain their percentage interest in the issued and
     outstanding shares of the Company immediately prior to the consolidation or
     rollback. On August 31, 2001, the company terminated the letter of intent
     and share purchase agreement entered into with FTMN.






                                       13
<PAGE>





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                          Notes to Financial Statements

                             As of June 30, 2001 and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001
-------------------------------------------------------------------------------

2.   Summary of Significant Accounting Policies
     ------------------------------------------

     Revenue Recognition

     Revenue will be recognized when goods are shipped or services are
     performed.

     Start-up Costs

     The Company expenses start-up costs as they are incurred.

     Management Estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     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.

     Disclosures about Fair Value of Financial Instruments

     The Company will account for the value of financial instruments using the
     fair value method.

     Income Taxes

     Deferred tax assets and liabilities are recognized for the future tax
     consequences attributable to differences between the financial statement
     carrying amounts of existing assets and liabilities and their respective
     tax bases. Deferred tax assets, including tax loss and credit
     carryforwards, and liabilities are measured using enacted tax rates
     expected to apply to taxable income in the years in which those temporary
     differences are expected to be recovered or settled. The effect on deferred
     tax assets and liabilities of a change in tax rates is recognized in income
     in the period that includes the enactment date. Deferred income tax expense
     represents the change during the period in the deferred tax assets and
     deferred tax liabilities. The components of the deferred tax assets and
     liabilities are individually classified as current and noncurrent based on
     their characteristics. 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 not be realized.

3.   Notes Receivable
     ----------------

     In April 2000, the Company entered into a letter of intent to acquire all
     of the issued and outstanding shares of common stock of The Anvil Group,
     Inc., a company that provides physical and online, web-based corporate
     security solutions. In anticipation of the transaction, the Company
     advanced $68,650 to The Anvil Group, Inc. and Anthony Humble, and $36,024
     to Anthony Humble, individually, under promissory notes dated June 27,
     2000. The note with Anthony Humble, individually, is denominated in
     Canadian dollars. The notes are not collateralized and bear interest at 10%
     per annum with principal and interest due December 24, 2000. In September
     2000, the Company





                                       14
<PAGE>





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                          Notes to Financial Statements

                             As of June 30, 2001 and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001
-------------------------------------------------------------------------------

3.   Notes Receivable, Continued
     ---------------------------

     and The Anvil Group, Inc.  terminated the planned  transaction  because
     the financing desired for the combined  companies after consummation of the
     transaction could not be obtained.


     In connection with the anticipated merger with FTMN, described in Note 1,
     the Company loaned FTMN and its principals $12,827 under a promissory note
     dated February 6, 2001. The note is denominated in Canadian dollars, is not
     collateralized, and bears interest at 10% per annum. The unpaid principal
     and accrued interest was due April 25, 2001 and is now past due.


     The amount due under the notes denominated in Canadian dollars has been
     translated into U.S. dollars using the exchange rate in effect at the
     balance sheet date. Translation gain or loss arising from exchange rate
     fluctuations is included in operations.


     While the Company believes The Anvil Group, Inc. and Anthony Humble have
     the financial capability to satisfy these note obligations, the notes are
     past due and one payment of principal and interest of $13,333 has been
     received on only one of the notes. The Company is unsure if additional
     payments will be received or, if received, the amount. In addition, the
     note receivable from FTMN is also past due. Accordingly, the Company has
     recorded an allowance for uncollectible notes of $115,125 representing the
     principal and accrued interest on these notes.

4.   Deferred Income Taxes
     ---------------------

     The components of the provision for income taxes are as follows:


                                                                 Period from
                                  For the         For the      August 25, 1997
                                Year Ended      Year Ended     (Inception) to
                              June 30, 2001    June 30, 2000    June 30, 2001
                              --------------   -------------   ---------------
     Current tax expense:
       Federal                       -                -                -
       State                         -                -                -
                                     -                -                -
                              --------------   -------------   ---------------
     Deferred tax expense:
       Federal                       -                -                -
       State                         -                -                -
                              --------------   -------------   ---------------
                                     -                -                -
                              --------------   -------------   ---------------
     Total provision                 -                -                -
                              =============    =============   ===============





                                       15
<PAGE>






                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                          Notes to Financial Statements

                             As of June 30, 2001 and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001
-------------------------------------------------------------------------------


4.   Deferred Income Taxes, Continued
     --------------------------------

     Significant components of the Company's deferred income tax assets and
     liabilities at June 30, 2000 and 1999 are as follows:


                                                    2001           2000
                                              ----------------  ---------------
       Deferred income tax asset:
         Allowance for uncollectible notes
                                              $      39,143                 -
         Capitalized start-up expenses              187,977      $    135,893
                                              ----------------  ---------------

       Total deferred income tax asset              227,120           135,893
         Valuation allowance                       (227,120)         (135,893)
                                              ----------------  ---------------

       Net deferred income tax liability                  -                 -
                                              ================  ===============

     Reconciliation of the effective tax rate to the U.S. statutory rate
     is as follows:
<TABLE>
<CAPTION>
<S>                                                              <C>                <C>               <C>
                                                                                                 Period from
                                                                For the           For the      August 25, 1997
                                                              Year Ended        Year Ended      (Inception) to
                                                             June 30, 2001     June 30, 2000    June 30, 2001
                                                            --------------    --------------   ---------------
         Tax expense at U.S. statutory rate                       (34.0)%         (34.0)%            (34.0)%
         Change in the valuation allowance                         34.0            34.0               34.0
                                                            --------------    --------------   ---------------
         Effective income tax rate                                    -               -                  -
                                                            ==============    ==============   ===============
</TABLE>

5.   Stock Transactions
     ------------------

     Private Placement Offering


     In November 1999, the Company completed a private placement offering of
     500,000 units at a price of $.50 per unit, and received total proceeds of
     $213,990 net of offering costs of $36,010, of which $25,000 was paid to
     Cascade, Inc. as a finder's fee. Each unit consists of one share of the
     Company's common stock and a warrant to purchase the Company's common
     stock. Each warrant is exercisable into one share of common stock at a
     price of $.50 per share, is exercisable at any time, and expires two years
     after the closing date of the offering.


     In January 2001, the Company sold 2,400,000 shares of its common stock in a
     private placement under regulation S of the Securities and Exchange
     Commission at $0.10 per share and received proceeds of $240,000.





                                       16
<PAGE>




                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                          Notes to Financial Statements

                             As of June 30, 2001 and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001
-------------------------------------------------------------------------------

     Founders Shares


     In August 1997, the Company issued 5,175,456 shares to the founders.
     Additionally, the Company received from the founders, an investment of
     non-market grade corporate stock valued at $175. In the year ended June 30,
     1999, the shares received were deemed worthless and were written off.

5.   Stock Transactions, Continued
     -----------------------------

     Stock Repurchase


     In October 1997, the Company reacquired and retired 1,000,000 shares of its
     outstanding common stock from a major shareholder for $1,000 (par value).


     Common Stock Reserved for Future Issuance


     At June 30, 2000, the Company has reserved 500,000 shares of its authorized
     but unissued common stock for possible future issuances for exercise of
     stock purchase warrants.

6.   Related Party Transactions
     --------------------------

     The Company has a investor relations consulting  agreement
     (the "agreement") with Cascade,  Inc., a former major shareholder of
     the Company.  Cascade,  Inc. is a related party as some of its principals
     are  shareholders of the Company and exercise control over the Company's
     activities. Under the terms of the agreement,  Cascade, Inc. receives an
     annual fee of $100,000 plus amounts for additional consulting services
     and reimbursement of Company expenses paid by Cascade. In this connection,
     the Company paid Cascade, Inc.  approximately  $157,664,  $107,000, and
     $264,664 for the years ended June 30, 2001 and 2000, and for the period
     from August 25, 1997 (inception) to June 30, 2001, respectively. At June
     30, 2000, the Company owed Cascade, Inc. $239,367.

7.   Loss Per Common Share
     ---------------------

     Basic and diluted loss per common share have been computed by dividing the
     loss available to common shareholders by the weighted-average number of
     common shares for the period.


     The computations of basic and diluted loss per common share for the year
     ended June 30, 2000 and 1999 and for the period from August 25, 1997
     (inception) to June 30, 2000 are as follows:
<TABLE>
<CAPTION>
<S>                                                               <C>              <C>                <C>
                                                                                                  Period from
                                                                For the           For the       August 25, 1997
                                                              Year Ended      Year Ended       (Inception) to
                                                             June 30, 2001    June 30, 2000      June 30, 2001
                                                            ---------------    --------------    ---------------
         Net loss available to common shareholders           $     268,315      $    192,441      $     671,807

         Weighted-average shares, basic and diluted              5,594,634         4,387,785          6,091,092
                                                            ---------------    --------------    ---------------

         Loss per common share, basic and diluted           $         0.05      $       0.04     $          0.11
                                                            ===============    ==============    ===============
</TABLE>




                                       17
<PAGE>





                        Fuzzy Logic Software Corporation
                          (A Development Stage Company)

                          Notes to Financial Statements

                             As of June 30, 2001 and
         For Each of the Two Years in the Period Ended June 30, 2001 and
        For the Period from August 25, 1997 (Inception) to June 30, 2001
-------------------------------------------------------------------------------


     Potentially dilutive securities were not included in the computation of
     diluted loss per share because their effect would be antidilutive.





                                       18
<PAGE>




Item 8.  Changes in and Disagreements with Accountants.
-------------------------------------------------------

There have been no changes in or disagreements with our accountants since our
formation required to be disclosed pursuant to Item 304 of Regulation S-B.

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons.
----------------------------------------------------------------------

Executive Officers and Directors. We are dependent on the efforts and abilities
of our sole officer and director, Michael Lynch. The interruption of the
services of Mr. Lynch could have a material adverse effect on our operations,
profits and future development, if a suitable replacement wasnot promptly
obtained. We anticipate that we will enter into an employment agreement with Mr.
Lynch; however, no assurance can be given that Mr. Lynch will enter into such an
employment agreement or, if he does enter into an employment agreement, that he
will remain with us during or after the term of his employment agreement. In
addition, our success depends, in part, upon our ability to attract and retain
other talented personnel. Although we believe that we will be successful in
attracting and retaining qualified personnel, there can be no assurance that we
will be able to do so. Mr. Lynch will hold his offices until hisresignation or
removal.

Our sole director and principal executive officer is specified on the following
table:

====================== ========= ================================
        Name             Age                Position
---------------------- --------- --------------------------------
Michael Lynch             33     President and a Director
====================== ========= ================================

Michael Lynch is the President and he has been a director since July 1999. From
1996 to 1999, Mr. Lynch operated a real estate construction and development
company in Vancouver, British Columbia. Prior to 1996, Mr. Lynch operated a real
estate development firm in London, Ontario, Canada.

Other than Mr. Lynch, there are no significant employees expected by us to make
a significant contribution to our business. Mr. Lynch will serve as our sole
director until the next annual meeting of stockholders. Our executive officers
are appointed by our Board of Directors and serve at the discretion of the Board
of Directors. At this time, Mr. Lynch is the only person who directly controls
or manages our business.

There are no orders, judgments, or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining Mr. Lynch from engaging in or continuing any conduct, practice or
employment in connection with the purchase or sale of securities, or convicting
him of any felony or misdemeanor involving a security, or any aspect of the
securities business or of theft or of any felony.

Section 16(a) Beneficial Ownership Reporting Compliance. Our sole director and
principal executive officer, Mr. Lynch, filed a Form 3 (Initial Statement of
Beneficial Ownership of Securities), on February 10, 2000. He has not been
required to file a Form 4 (Statement of Changes of Beneficial Ownership of
Securities), and he has been required to, but has not, filed a Form 5 (Annual
Statement of Beneficial Ownership of Securities). Because approximately 58.2% of
our shares of common stock are held by Cede & Company, we do not presently have
knowledge as to whether there are now any principal shareholders who are
required to file reports pursuant to Section 16(a) of the Securities Exchange
Act of 1934, as amended, and the rules promulgated thereunder.



                                       19
<PAGE>




Item 10.  Executive Compensation
--------------------------------

Any compensation received by our officers, directors, and management personnel
will be determined from time to time by our Board of Directors. Our officers,
directors, and management personnel will be reimbursed for any out-of-pocket
expenses incurred on our behalf.

Remuneration of Officers. Mr. Lynch is our only officer and does not earn either
compensation or remuneration from us for services provided to us.

Remuneration of Directors. As of June 30, 2001, no compensation has been paid to
Mr. Lynch for his services to us as a director.

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

(a) Security Ownership of Certain Beneficial Owners. The following represents
those shareholders, other than directors and officers, who are beneficial owners
of 5% or more of our issued and outstanding common stock as of June 30, 2001:

                Name and Address of      Amount of
Title of Class  Beneficial Owner         Beneficial Owner      Percent of Class
--------------  ---------------------    --------------------  ----------------
 Common Stock   Cede & Co.               4,063,089 shares (1)        58.2%
                P.O. Box 20
                Bowling Green Station
                New York, New York 10274

(1) We have attempted to obtain information on the beneficial holders of the
stock held by Cede & Co. To the best of our knowledge, there are no beneficial
owners of 5% or over holding stock in the name of Cede & Co.

As of June 30, 2000, our Transfer Agent listed Mr. Rui Sun as the beneficial
owner of 3,000,000 shares of our common stock and Mr. Yun Tian as beneficial
owner of 3,000,000 shares of our common stock. However, by resolution, we have
cancelled those 6,000,000 shares. As such, we have not treated the 6,000,000
shares as issued and outstanding in the accompanying financial statements. In
January 2001, we sold 2,400,000 shares of our common stock in a private
placement under Regulation S of the Securities and Exchange Commission at $.10
per share and received proceeds of $240,000.

(b) Security Ownership of Management. Our directors and principal executive
officers beneficially own, in the aggregate, 20,000 shares of our common stock,
or approximately 0.29% of the issued and outstanding shares, as set forth on the
following table:

                  Name and Address of        Amount of
Title of Class    Beneficial Owner           Beneficial Owner   Percent of Class
---------------   ------------------------   ----------------   ----------------
Common Stock      Michael Lynch, President   20,000 shares            0.29%
                  and Director

Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect to
securities. In accordance with Commission rules, shares of our common stock
which may be acquired upon exercise of stock options or warrants which are
currently exercisable or which become exercisable within 60 days of the date of
the table are deemed beneficially owned by the optionees. Subject to community
property laws, where applicable, the persons or entities named in the table
above have sole voting and investment power with respect to all shares of our
common stock indicated as beneficially owned by them.

Changes in Control. Our management is not aware of any arrangements which may
result in "changes in control" as that term is defined by the provisions of Item
403(c) of Regulation S-B.




                                       20
<PAGE>




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

Transactions with Promoters.

In August, 1997, we issued 5,175,456 shares of common stock to our founders.

Related Party Transactions. There have been no related party transactions which
would be required to be disclosed pursuant to Item 404 of Regulation S-B, except
for the following:

At inception, we entered into a fee and cost reimbursement arrangement with
Cascade, Inc., a related party which was a former major shareholder of ours.
Some of Cascade, Inc.'s shareholders are also our shareholders and indirectly
may exert significant influence, or even control, matters which are subject to
shareholder approval or which can be voted upon by our shareholders. We also
entered into an investor relations consulting agreement with Cascade, Inc. In
connection with this arrangement, a management fee of $100,000 per year is
charged to us. This arrangement was not the result of arm's-length bargaining.
It is likely that we would not have entered into such an agreement if Cascade,
Inc. was not a related party. Our expenses are paid by Cascade, Inc. and have
been accrued. At June 30, 2001, we owed Cascade, Inc. $239,367.

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

Copies of the following documents are filed with this Registration Statement,
Form 10-KSB as exhibits:

3.1      Certificate of Incorporation of Fuzzy Logic          E-1 through E-6
         Software Corporation (Charter document)*

3.2      Bylaws of Fuzzy Logic Software Corporation           E-7 through E-14
        (Charter document)*

* Previously filed as exhibits to Registration Statement on Form 10-SB filed on
November 12, 1999.



                                       21
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned in the City of Vancouver, British Columbia, on October 19, 2001.

                                   Fuzzy Logic Software Corporation,
                                   a Delaware corporation


                                   By:      /s/ Michael Lynch
                                            -----------------------------------
                                            Michael Lynch
                                   Its:     President, Director

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.

Fuzzy Logic Software Corporation

By:      /s/ Michael Lynch
         -----------------------------------
         Michael Lynch
Its:     President, Director